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Balancing health and industrial policy objectives in the pharmaceutical sector: Lessons from Australia

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  • Morgan, Steve
  • McMahon, Meghan
  • Greyson, Devon

Abstract

Introduction Policy-makers worldwide struggle to balance health with industrial policy objectives in the pharmaceutical sector. Tensions arise over pricing and reimbursement in particular. What health plans view as necessary to maintain equitable access to medicines, industry views as inimical to R&D and innovation. Australia has grappled with this issue for years, even incorporating the goal of "maintaining a responsible and viable medicines industry" into its National Medicines Policy.Methods This case study was conducted via a narrative review that examined Australia's experiences balancing health and industrial policy objectives in the pharmaceutical sector. The review included electronic databases, grey literature and government publications for reports on relevant Australian policy published over the period 1985-2007.Results While pharmaceutical companies claim that Australia's pricing and reimbursement policies suppress drug prices and reduce profits, national policy audits indicate these claims are misguided. Australia appears to have secured relatively low prices for generics and "me-too drugs" while paying internationally competitive prices for "breakthrough" medicines. Simultaneously, Australia has focused efforts on local pharmaceutical investment through a variety of industry-targeted R&D incentive policies.Discussion Despite the fact that policy reviews suggest that Australia has achieved balance between health and industrial policy objectives, the country continues to face criticism from industry that its health goals harm innovation and R&D. Recent reforms raise the question whether Australia can sustain the apparent balance.

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  • Morgan, Steve & McMahon, Meghan & Greyson, Devon, 2008. "Balancing health and industrial policy objectives in the pharmaceutical sector: Lessons from Australia," Health Policy, Elsevier, vol. 87(2), pages 133-145, August.
  • Handle: RePEc:eee:hepoli:v:87:y:2008:i:2:p:133-145
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    References listed on IDEAS

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    1. Productivity Commission, 2003. "Evaluation of the Pharmaceutical Industry Investment Program," Microeconomics 0305001, University Library of Munich, Germany.
    2. Vandergrift, Michael & Kanavos, Panos, 1997. "Health policy versus industrial policy in the pharmaceutical sector: the case of Canada," Health Policy, Elsevier, vol. 41(3), pages 241-260, September.
    3. Lofgren, Hans & Boer, Rebecca de, 2004. "Pharmaceuticals in Australia: developments in regulation and governance," Social Science & Medicine, Elsevier, vol. 58(12), pages 2397-2407, June.
    4. Stephane Jacobzone, 2000. "Pharmaceutical Policies in OECD Countries: Reconciling Social and Industrial Goals," OECD Labour Market and Social Policy Occasional Papers 40, OECD Publishing.
    5. Productivity Commission, 2001. "International pharmaceutical price differences," Others 0107004, University Library of Munich, Germany.
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    Cited by:

    1. Vogler, Sabine & Zimmermann, Nina & de Joncheere, Kees, 2016. "Policy interventions related to medicines: Survey of measures taken in European countries during 2010–2015," Health Policy, Elsevier, vol. 120(12), pages 1363-1377.

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