Asthma drugs price war slashes costs

Press, 22 June 1989, Page 46

Asthma drugs price war slashes costs

PA Wellington A price war involving life-saving asthma drugs has dramatically cut medication costs for asthmatics. It has also slashed more than $2.5 million a year from the Health Department’s drug subsidy bill. The price war, involving products containing salbutimol, began when it became known that babies, young children and invalid asthmatics were suffering because Edinburgh Pharmaceuticals, Ltd, had withdrawn bottles of ventolin respirator solution from the market and replaced them with more expensive nebules.

The active ingredient in ventolin is salbutimol.

At the time, the company said the nebules were a new and better product because they were preservative-free and the bottled solution was not.

But the department said withdrawal of the bottled solution was not neces-

sary, and was prompted by a departmental refusal to increase the subsidy on the bottled product about 30 per cent. Chronic asthmatics, who previously paid only the Government prescription charge of $2 for children or $5 for adults, were suddenly hit by a part-charge of $29.90 for a six-week supply of the nebules.

That part-charge has now been dropped, along with part-charges on all other ventolin products. Department sources say the price of the nebules came down after Douglas Pharmaceuticals introduced its own, cheaper, bottled salbutimol respirator solution in response to the publicity. Edinburgh did not respond at first, but when the new product began eating into ventolin’s market share, the price of that product was dropped to the same as the competition. The sources say Douglas dropped its price again soon after, forcing

Edinburgh to take the offensive by offering pharmacies a 40 *per cent discount to retrieve ventolin’s market share.

But Mr Murray Main, the marketing director of Edinburgh’s parent company, Glaxo New Zealand, Ltd, said the price was dropped as part of Glaxo’s policy not to have partcharges on products. “In the light of the recent upheaval in the asthma medication area we felt it appropriate that a product as well known and respected as salbutimol was available without the part-charge,” Mr Main said.

Competition had nothing to do with the decision to lower the price. He also denied 40 per cent discounts were offered to retailers.

“We lowered the price,” he said.

The Health Department chief negotiator, Mr Brian Hepinstall, said the price war knocked about $2.5 million off the Health Department’s drug bill for ventolin aerosols alone.