Australians will increasingly find themselves prescribed generic drugs rather than the big-name brands, under changes to be unveiled in next week's budget.

Key points: Budget changes to encourage doctors to prescribe generic drugs

Budget changes to encourage doctors to prescribe generic drugs Increased use of generic drugs could save PBS $1.8billion over 5 years

Increased use of generic drugs could save PBS $1.8billion over 5 years Doctors concerned changes could challenge their independence

7.30 understands the Government intends to change the prescribing software used by doctors, with the default setting switched to the active ingredient.

GPs would still be able to prescribe particular brands but under the new "opt out" regime, they would have to actively nominate a drug other than the generic name.

Industry sources said this change — plus a suite of measures to be inked in an agreement between the Government and Medicines Australia before Tuesday's budget — would save a combined $1.8 billion.

But Health Minister Greg Hunt has told 7.30 that any savings will be ploughed back into the Pharmaceutical Benefits Scheme (PBS) by listing new medicines.

"Our commitment is that there will always be 100 per cent doctor control over the prescriptions that they give," he told 7.30.

"That's what it has been, that's what it is and that's what will be and that's what it will always be under a Coalition government.

"By definition anything that we do is about reinvestment in the PBS, this means more drugs at lower costs, better healthcare for all Australians, and the proof is what we've done today with $310 million for cystic fibrosis, pulmonary fibrosis and for leukaemia."

Scripts dispensed on the PBS cost concession cardholders $6.30 and for general patients $38.80.

About 70 per cent of all prescriptions in Australia are written for concession card holders.

Doctors concerned about independence

Tony Bartone says changes to prescribing generic medicine threatens doctors' independence.

Only 58 per cent of all scripts dispensed in Australia are for generic drugs, compared to 84 per cent in the United States, 83 per cent in the United Kingdom, 77 per cent in New Zealand and 70 per cent in Canada.

The Australian Medical Association opposes generic default prescribing.

"Independent clinical decision making and prescribing is something that the AMA holds very dear and very true to our hearts," AMA vice-president Tony Bartone told 7.30.

"Forcing a default option to a generic, when we come to prescribing for our patients, would not be in the patient's interests.

"It's about understanding our patients and making a decision that's in the patient's best interests, as well as one that's guided by years of clinical expertise and experience.

"We understand our patients, we know what works for them and we know the peculiarities and the idiosyncrasies about what works for them."



Changes would be win-win: Pharmacy Guild

Health Minister Greg Hunt wants to give patients best access at lowest cost. ( 7.30 )

Mr Hunt would not speculate on budget measures but said the Government had no intention of interfering with doctors' independence.

"Our commitment is to give patients the best access and the lowest cost," the Minister said.

"Generics are one way of doing that but it has to be, as it always has been, under the control of the doctors."

The Pharmacy Guild expressed support for generic prescribing.

"Generic substitution policy is good policy for the government," Pharmacy Guild President George Tambassis told 7.30.

"I think it's good policy for the patients, so it's a win-win. It gives the government a little bit more room to actually sustain the PBS and actually gives the patients more choice as well."

'Only so much money to go around'

The TGA expects significant savings if more generic drugs are prescribed. ( iStockPhoto/milanfoto )

Adjunct Professor Tim Greenaway, the chief medical adviser at the Therapeutic Goods Administration, said increased use of generics and biosimilar alternatives could deliver big savings.

"The role of the TGA which is to ensure the safety, quality and efficacy of medications, is such that when copy products or similar products come onto the market, we assess them to make sure they are equivalent to the reference product, and that the efficacy for patients would be identical," Professor Greenaway said.

"The bio-similars are cheaper, by and large, and therefore, if there is an increased uptake in the use of these products, compared to the reference products, there is expected to be considerable savings to the health budget - which can then be put into subsidising newer medicines.

"It's important for people to realise medicine is changing, new drugs are coming on to the market, but there is only so much money to go around and doctors have a role, senior doctors particularly, in stewardship of limited health resources."

Under the Government's soon-to-be signed five-year agreement with Medicines Australia, the price Government pays for PBS medicines still on patent would be progressively cut every five years.

And once PBS-listed drugs go off-patent altogether, the price will be slashed by a further 25 per cent.

All up, about $1.8 billion will be saved over the next five years.