I have noticed that "Private Prescription" full price of many pharmaceuticals are cheaper than "Pharmaceutical Benefits Scheme (PBS) Discounted Price".
Eg: Crestor 10mg
http://www.chemistwarehouse.com.au/buy/50778/Crestor-10mg-Ta…
This is counter intuitive to me and makes little sense.
Does anyone know the reason for this?
You know that no one know the reason for this? Or you don't know the reason for this?
Yes
Haha
Isn't it all explained in the Learn More links on that page?
Not really to me. Do you mean to say it is expected for patients pay more for the same medication if they want to make the expense count towards the PBS safety net?
Depends on the medication - when there are heavy numbers of generics available you can get it cheaper depending on which brand sells their medication at what rate.
A diabetic drug here for example is cheaper PBS than private, but this one is newer and I don't believe there are generic versions available.
http://www.chemistwarehouse.com.au/Buy/58237/Janumet-50-1000…
"Private prescription" is without any subsidy.
Why should the price go up, when the same medication is made available under PBS?
Once a patient has a PBS prescription, she can choose to have the pharmaceutical dispensed to her either as a "Private prescription" or as a "PBS discounted price" prescription. When a dispensed as a private prescription, the cost does not count towards the PBS safety net. So, is this a method to drive people away from the PBS safety net?
PS: the example you put forward is a different scenario in which PBS limit kicks in. Any medication that costs over $38.80 are subsidised to $38.80 under PBS (concession card holders get $6.xx something).
No, I haven't asked them. They are not the only pharmacy that does that. Once I asked my local pharmacy but they didn't know the exact reason.
@surm: They should have a explanation, email them. And ask priceline as well. Usually you get better answer from email than from a shop front.
It's up to the pharmacy as to what they charge you for a private prescription, so cheaper generics can save money - and they can charge additional fees if a discounted PBS prescription costs less than 38.80.
see: http://www.pbs.gov.au/info/general/faq reading the below and few following paragraphs
"How much am I charged for non-PBS items?
If your medicine is not listed under the PBS Schedule, you will have to pay full price as a private prescription. It is not subsidised by the Australian Government.
Pharmacies may charge differently for these non-PBS medicines, so you may want to shop around to find the best price.
Please note that the cost of private prescriptions cannot count towards the Safety Net threshold."
Chemist warehouse just like to make you feel like you're saving money I guess when you're not really, even though they probably could sell the same drug PBS discounted for $13 as well.
Based on ^ private prescription price would be sale price for the individual Chemist and PBS price would be agreed set price by government for PBS.
Eg. Government set the price year ago, at that time price of the item was $17.63 but since then price of it came down? Usually PBS pricing get updated every financial year I think.
even though they probably could sell the same drug PBS discounted for $13 as well.
Which was what I find counter intuitive. Why would a pharmacy jack up the price when selling under PBS but lower the price when selling as a private prescription?
Besides, different pharmacies sell the same medication under PBS at different prices. It is not fixed.
PBS may have a scheduled price; but does it make sense that there is rule to prevent anyone selling below the scheduled price? I can understand that the government wanting to prevent pharmacies selling medications above a specified price, but can't understand why they would enforce a minimum price as well
@surm: It's a bit like how CWH promote savings based on RRP when hardly anywhere sells things at full RRP?
Then they can print on the receipt that you saved $5.32 by shopping with them
This is the answer.
Essentially the breakdown of a prescription is as follows:
Cost price +
dispensing fee (government sets this and I'n not sure what it is this year, might be $6) +
markup (10-40% on cost) +
pbs safety net recording fee if it's not a private script (this can vary from pharmacy to pharmacy but not by much).
Back in my day when I was still a pharmacist there was a hoard of $5.90 private scripts at certain chain pharmacies. This was essentially dispensing cost only, the drug itself would've cost peanuts and it was about volume more so than gp%.
So, is this a method to drive people away from the PBS safety net?
Now you're getting why!
It has to do with the pricing structure that is REQUIRED within the PBS system. See the following link http://www.pbs.gov.au/info/healthpro/for-pharmacists (I won't go into the details, I barely understand the pricing structure myself, and certainly not well enough to teach anyone about it).
Suffice to say that Chemist Warehouse MOSTLY works on high volume low margin for their prescription meds. The more popular the medicine, the lower the price due to the higher volumes of dispensing. They "ignore" the PBS pricing structure and make the product a PRIVATE medicine when it is below the "$38.80 threshold", the patient does not qualify for PBS safety net.
It's not a conspiracy to reduce the ability of patients to reach the safety net… it's just a company that caters to the price conscious consumers. But you do get what you pay for… I find their service is abysmal.
Also, if your medication is not popular, I guarantee that Chemist Warehouse is NOT the cheapest price in town without some sort of negotiation/haggling/price matching.
(Disclosure: I'm an industry insider, who does not work in pharmacies).
Thank you shortblack9 and charzy for the detailed responses.
So, the summary is that the PBS has mandatory recording/reporting expenses to the chemists, therefore, after factoring in these fees, the total price goes up compared to "private script" pricing.
If this is the case, chemists can sell any medication (that costs below $38.80) at a lower price than PBS under "private script" option because of the savings from "PBS dispense and other reporting" fees
Also, if your medication is not popular, I guarantee that Chemists' Warehouse is NOT the cheapest price in town without some sort of negotiation/haggling/price matching.
Do you know any examples of these by any chance? I have not yet found a cheaper price than Chemist Warehouse in any other chemist. My experience has been that even Discount Pharmacy and Priceline are more expensive than Chemists' Warehouse.
Correct. Mandatory pricing prevents price competition within the PBS. If the medication is made private by different pricing, then competition is permitted. You'll find that smaller pharmacies can't compete on price because they get poorer pricing from wholesalers and manufacturers. But generally speaking the service tends to be better (of course there are exceptions).
In relation to less popular drugs that are more expensive at Chemist Warehouse, I do know of at least one drug, but by publishing the name of the drug, it will reveal my employer. Suffice to say, shop around regardless. Don't take anything at face value.
No