Pricing and utilisation of proton pump inhibitors in South Australian public hospitals and the Pharmaceutical Benefits Scheme

Background: The Australian Pharmaceutical Benefits Scheme (PBS) reforms have been effective in reducing the price paid for medicines. South Australian public hospitals purchase medicines through competitive tendering, whereas the PBS purchases via reference pricing. There is currently little known about the price differences and relative utilisation patterns that exist for proton pump inhibitors (PPIs) between South Australian public hospitals and the PBS. Aim: To compare the prices and relative utilisation patterns of PPIs between South Australian public hospitals and the PBS. Method: A retrospective price and relative utilisation comparison was conducted on five PBS-listed PPIs. Average weighted prices and total PBS expenditure were calculated under various scenarios derived from prices and/or relative utilisation in South Australian public hospitals. Results: The average weighted price of PPIs in South Australian public hospitals was almost 70% cheaper than for the equivalent medicines on the PBS. Savings of $AUD440 million from 2011 to 2012 would have been achieved if the PBS price and relative utilisation of PPIs had been similar to that of South Australian public hospitals. Increased utilisation of cheaper off-patent PPIs in the South Australian public hospitals had a greater impact on total expenditure than the price differences between the PBS and the South Australian public hospitals in 2012. Conclusions: Prices of PPIs in the PBS are more expensive than those purchased by South Australian public hospitals. Further savings to total PBS expenditure could be achieved by reducing prices further and promoting the use of off-patent medicines.