Panadol Osteo, government cuts and tax avoidance
I take Panadol Osteo on my doctor’s advice for my osteo-arthritic knee. I buy it over the counter from my local chemist.
Until Friday patients could also buy it at a subsidised price if it was prescribed by a doctor. The Abbott/Turnbull government removed the subsidy for over the counter medications with effect from 1 January 2016. This means the subsidised price could increase, perhaps to the over the counter price.
Health Minister Susan Ley claims this is incorrect because competition with supermarkets will keep the prices lower. Yet as ABC Fact Check says:
‘Paracetamol prescriptions cost the government around $73 million a year on the PBS, but 85 per cent of that cost comes from prescriptions for people in chronic pain from osteoarthritis.
‘The high dose, slow release paracetamol formulation they are prescribed can’t be bought from a supermarket for $2.
‘Only around $2.3 million is for paracetamol formulations that could be bought from the supermarket for less than the patient pays for a prescription, and at no cost to the government.
‘Ms Ley is incorrect.’
There is something else in this too. According to The Mercury, the maker of Panadol Osteo, ‘Pharmaceutical giant GlaxoSmithKline Australia has advised pharmacies it will increase the wholesale price for Panadol Osteo from $4.28 to $6.31 for 96 caplets.’ This is a 50% increase in the wholesale price and if followed through on the retail price would see that increase from around $5 to $7.50.
The company linked the price increase to the changes in the PBS scheme. The two are unrelated and the Minister has referred the company to the Australian Competition and Consumer Commission for investigation as to whether they have been involved in misleading or deceptive conduct.
Obviously GlaxoSmithKline has seen an opportunity to increase its returns in what is already a highly profitable industry Don’t imagine however that we as community will benefit indirectly through increased tax revenue from this profit gouging.
According to the Corporate Tax Transparency Report recently released by the Australian Tax Office, in 2012/13 GalxoSmithKline had sales of almost $1.5 billion in Australia. However its taxable income was only $57.9 million on which it paid tax of just under $12 million.
GlaxoSmithKline: A tax avoider and a price gouger using the Turnbull government’s attacks on people in chronic pain to further advantage itself at our expense.