A THINK tank has called on the federal government to benchmark local drug prices with those paid overseas to drive down the cost to local consumers.
The Grattan Institute says the government's "price disclosure" system has failed to lower prices in Australia, which are on average 14 times higher than in the UK.
The price disclosure system takes note of the discounts manufacturers and wholesalers offer pharmacies, and cuts prices accordingly.
However, the Grattan Institute says Australians still paid significantly higher prices than people in the UK, New Zealand and Canada.
"On average, Australian prices remain almost 16 times higher than the best price in these three places," a new report from the think tank said.
Grattan Institute director Stephen Duckett said price disclosure was working, "but it is not working well enough".
Instead, he said the government should benchmark Australian prices against international drug prices.
"In the end, what's happening is the prices that the Australian government is paying are way above what comparable countries pay," Dr Duckett told AAP.
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