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The loophole results in the government paying different prices through the Pharmaceutical Benefits Scheme PBS for different drugs that work as well as each other to treat a given medical condition. The problem occurs when the price of one drug drops but the prices of other, newer drugs with equivalent effects do not. Health expenditure in Australia has long increased at a faster rate than the Australian economy. Over the past 25 years, government spending on health increased from With reduced economic growth and continuing uncertainty, this trajectory cannot continue. A good example to illustrate the pricing anomaly of equivalent drugs is with statins. This is the class of drugs used to lower cholesterol levels and so reduce the risk of serious cardiovascular events, like heart attacks.
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