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Medicine prices value
Consumers have been getting good
value for money when purchasing
medicines over the past 20 years when
compared with the rising prices for other
commodities, and household income
growth according to the Medicines
partnership of Australia.
Its December 2012 PBS Scorecard includes
data from the Australian Bureau of
Statistics showing that between June
1991 and June 2012, consumer medicine
prices have grown by 57% compared with
overall prices in the economy growing
by 70% over the same period. Based on
this data, the prices consumers pay for
their medicines have not kept pace with
inflation over the past 20 years.
The scorecard shows that in the same
period, median household income
grew by 118%, meaning that household
incomes have grown at more than double
the rate of medicine prices.
This compares with other areas of
household expenditure which have
grown at more than the rate of general
inflation and household income, such as
the prices for utilities and petrol.
Over the same 20 year period, the prices
consumers pay for medical and hospital
services have increased by 191%, or more
than three times the rate that medicine
prices have grown, and faster than
household incomes have grown over the
same period. So while consumers may
Medicines Partnership of Australia
Government spending on PBS remains under control
Pharmaceutical Benefits Scheme (PBS) Scorecard
Figure 2 – Consumer medicine prices not keeping pace with inflation or household incomes
Figure 2 uses data from the Australian Bureau of Statistics to look at the growth in the price consumers pay for medicines
compared with the growth in overall inflation and household incomes. The data shows that over the last two decades
between June 1991 and June 2012, consumer medicine prices have grown by 57%. This might sound large, however,
this compares with overall prices in the economy growing by 70% over the same period. This means that the prices
consumers pay for their medicines has not kept pace with inflation over the last 20 years.
Interestingly, median household income has grown by 118% over the same period, meaning that over the last 20 years
household incomes have grown at more than double the rate of medicine prices. This compares with other areas of
household expenditure which have grown at more than the rate of general inflation and household income, such as the
prices for utilities and petrol.
Over the same 20 year period the prices consumers pay for medical and hospital services have increased by 191%, or more than
three times the rate that medicine prices have grown, and faster than household incomes have grown over the same period. So
while certainly consumers may be feeling the pressure of higher prices for health costs, this has not been due to medicine prices.
Source:PBS expenditure-DoHA Annual Reports, Department of Health and Ageing, Various Years.
GDP-Australian Bureau of Statistics, catalogue 5206.0 - Australian National Accounts: National Income, Expenditure and Product, various year
Are the prescription medicine prices growing faster
than the CPI and household incomes in Australia?
*The percentage change in median household income shown above is the change in income from 1991 to 2011 only (latest available estimates)
Source: CPI: ABS, catalogue 6401, June qtr 2012; Median annual household income: ABS, Census 1991 and 2011.
be feeling the pressure of higher prices
for health costs, this has not been due to
While individual households will
vary, according to ABS data average
consumers spend only $5.83 per
week of their household budget on
This compares with $6.16 a week on milk,
$11.34 a week on cigarettes, $12.17 on
mobile phones, $30.50 on fast food and
takeaway, $31.97 a week on meals in
restaurants and clubs, and $36.66 a week
The scorecard can be viewed at:
The Chemmart big brand
Chemmart Pharmacy is set to become
Australia’s largest community
In December it signed its 305th store at
Williams Landing in Victoria.
The Victorian store is one of 56 pharmacies
that joined the brand in 2012 with many
newly signed pharmacies having already
commenced trading and the remainder to
be fully trading by mid-2013.
Chemmart Executive Director,
Jonathan Layton, said it was pleasing to
reach this milestone so quickly after a
strategic decision to focus on expanding
the member network to provide increased
health services to Australian communities.
‘ With newly signed stores now opening
weekly, we will be the largest community
pharmacy brand in Australia in early 2013
– with our greatest presence being in
Queensland, followed by Victoria and then
South Australia. Over the past 12 months
we have opened one new pharmacy every
10 days. Our goal now is to reach 400 stores
For the first in the company’s history
Chemmart Pharmacy sales will exceed $850
million for the 2012 calendar year due to
an increase in store numbers, an aggressive
marketing program, and successful
retail positioning as Australia’s leading
Mr Layton said that at the heart of the
Chemmart Pharmacy philosophy is a
commitment to providing professional,
accessible and affordable health services
to the community.
In the coming months the brand will increase
its suite of health and wellbeing products.
Mr Layton said that brand’s growing
presence and expanding wellbeing
products and services is gaining traction
‘Our most recent brand health study indicates
a significant increase in the awareness of the
professional services Chemmart Pharmacies
provide. Heavy investment in the training and
education of our pharmacists and staff via the
establishment of “Chemmart College” and our
ongoing professional development programs
has certainly paid off,’ Mr Layton said.
(More business news on page 76.)
The Medicines Partnership of Australia is: The Pharmacy
Guild, Medicines Australia, the Generic Medicines Industry
Association, the Australian Self-Medication Industry, the
Pharmaceutical Society of Australia and the National
Pharmaceutical Services Association.
Chemmart Executive Director, Jonathan Layton.
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