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November 23/30, 2005

Drug Prices and Value for Money: The Australian Pharmaceutical Benefits Scheme

Author Affiliations

Author Affiliations: School of Medicine and Public Health, University of Newcastle, New South Wales (Drs Henry and Hill) and Centre for Health Economics, Monash University, Victoria (Dr Harris), Australia.

JAMA. 2005;294(20):2630-2632. doi:10.1001/jama.294.20.2630

In this issue of JAMA, Pearson and Rawlins1 describe the work of the National Institute for Health and Clinical Excellence (NICE), the main health technology assessment agency in the United Kingdom. NICE provides comprehensive advice, including assessment of efficacy and comparative cost-effectiveness of medical interventions and publishes clinical guidelines.2 This ambitious project is the most prominent and far reaching of a number of international initiatives, including health technology assessment programs in Canada and Spain3,4 and pharmaceutical cost-effectiveness evaluations linked to reimbursement decisions in Australia, the Netherlands, and Canada.5-7 The relevance to the United States has increased with the Medicare Prescription Drug Improvement and Modernization Act of 2003.8 This act introduces a voluntary program of prescription drug coverage but the US government will not get directly involved in price negotiation, leaving implementation of the drug plans to managed care organizations and pharmacy benefit managers. These organizations will carry a degree of financial risk and will be interested in achieving maximum value for money, thus increasing the relevance of pharmacoeconomic analyses.

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