Introduction

In the modern world, prescription drugs are considered as a central part of the treatment. Simultaneously, the prescription drugs are so expensive in most of the first world countries that it is almost impossible for a large proportion of consumers to buy them without subsidies or price control from their respective governments. The healthcare systems differ widely among the first world countries. Three different types of healthcare systems were identified to exist in these countries. For example, in USA, the health care system is predominantly private while in UK it is predominantly public and in Ireland it is truly mixed. But the consistent feature of all these governments is that they provide subsidies on the cost of the medications at least to certain groups of the population. Governments around the world employ various methods to contain the costs of the pharmaceutical drugs like price and profit control applied to the pharmaceutical companies, fully or partially subsidized systems with patient co-payments, reference price lists and drawing up of a list of reimbursable drugs etc. Many countries offer this subsidy only on medications which form part of a reimbursable medication list.

Effectiveness of PBS in comparison to schemes in other countries

Pharmaceutical Benefits Scheme (PBS) is the Australian government initiative to provide subsidised prescription medicines to the Australian residents and the visitors from foreign countries which have reciprocal Health Care Agreements with Australia. PBS was first introduced in 1948 and the main aim of this programme is to provide reliable and affordable access to a wide range of necessary medications (Department of Health 2014). PBS is governed by the National Health Act 1953. It is estimated that that the drugs subsidised through the Pharmaceutical Benefit Scheme costs the patients and government more than $ 9 billion a year (Australian Institute of Health and Welfare 2012b). In this paper, the Pharmaceutical Benefit Scheme is compared with other comparable government sponsored schemes that are currently prevalent in first world countries like New Zealand, Canada, United Kingdom and Netherlands.

In New Zealand, the Pharmaceutical Management Agency (PHARMAC) established in 1993 is the government agency that has the authority to make decisions on what medications can be subsidized to the public by the local health boards. Both countries through an established process review the comparative cost effectiveness of all the new drugs before deciding whether or not to include them in the list of subsidized medications. This process is undertaken by the Pharmaceutical Benefits Advisory Committee (PBAC) in Australia, and the Pharmacology and Therapeutics Advisory Committee in New Zealand (PTAC). While both the Australian and New Zealand governments provide the universal subsidy schemes to make the commonly used drugs more affordable and accessible and the health outcomes are likely to be similar, they differ mainly in strategies employed for expenditure management resulting in significant difference in expenditure (Morgan S & Booth K, 2010). For example, they differ significantly in patient co-payments. While both the countries charge less for the vulnerable patient population, the general patients in Australia pay A$ 36.90 for each item which is approximately three times higher than their counterparts in New Zealand who pay up to NZ$15, depending on source of primary care. This raises the important question as to whether an average Australian patient can afford them in spite of subsidizing the drugs.