Boston, MA -- (ReleaseWire) -- 02/14/2014 -- We have downgraded our Australia pharmaceutical forecast, following the release of the latest Pharmaceutical Benefits Scheme (PBS) expenditure. While demands for pharmaceuticals and healthcare services will remain high owing to the ageing population, we note that proposed changes to PBS pricing and reimbursement (via price disclosure) could potentially bring down drug prices further.
BMI has reassessed Australia's pharmaceutical expenditure following the release of new data on the Pharmaceutical Benefits Scheme (PBS). The majority of the decline was on the government side (-1.3%) rather than patients (-0.6%). In the latest round of price disclosure (December 2013), there was an average price reduction of 33.8% for seven drugs. However, judging by the level of decline in government and patients' contributions, we note that cost savings were not significant at the consumer price level,
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Headline Expenditure Projections
- Pharmaceuticals: AUD12.75bn (US$12.55bn) in 2013 to AUD13.16bn (US$11.54bn) in 2014; +3.4% in local currency terms and -8.1% in US dollar terms, due to significant exchange rate fluctuations. Forecast was downgraded after taking into account new data from Pharmaceutical Benefits Scheme's expenditure.
- Healthcare: AUD142.69bn (US$140.5bn) in 2013 to AUD149.38bn (US$130.79bn) in 2014; +4.7% in local currency terms and -7.0% in US dollar terms, due to stronger exchange rate fluctuations. Forecast changed slightly from Q114 in local currency terms.
Australia's Pharmaceutical Risk/Reward Rating (RRR) score for Q214 remains 67.0 out of the maximum 100 in our newly improved RRR system. In Q214, Japan is ranked as the most attractive market in the Asia Pacific region (scoring 74.5 out of 100), followed by Australia (67.0) and Taiwan (65.7). In general, Australia scored above average for all indicators and sub-indicators. . However, Australia has among the top five countries the lowest industry rewards score with 23.6 compared to both Taiwan and South Korea with scores of 27.2 and 26 respectively. The latter countries are trailing Australia in the overall ranking. Thus, focusing on the rewards component of the rating system, Australia scores a total of 40.2 out of 65. Australia's score is boosted by a relatively large pensionable population (pensionable population score of 6.4 out of 8), a through immigration steadily growing population (population growth score of 3.0 out of 5) and high spending per capita scoring 9.6 out of 12 - second only to Japan - but dragged down by a declining pharmaceutical market (sector value growth score of 0 out of 12).
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