Some drugs more equal than others: pseudo-generics and commercial practice

Abstract

This article analyses the impact of the Department of Health and Ageing's brand price premium policy for some products listed on the Pharmaceutical Benefits Scheme. The policy, introduced in 1990, allows pharmaceutical companies to charge patients an out-of-pocket expense for post-patent brands of pharmaceuticals. One of the policy's intended goals was to increase consumer awareness of price differentials between competing brands, with a view to encouraging greater use of cheaper generic products. More than fourteen years since its introduction, it is debatable whether the policy has achieved this aim. This article looks at how the brand price premium policy can be exploited by global pharmaceutical giants to entrench big-name brands in the Australian pharmaceutical market and, in some cases, prevent 'true' competition from generic pharmaceuticals. This is being done through the establishment of 'pseudo-generics' that are sourced from the same factory floor as the original product.