Access to new medicines in Australia
*Isobel Brown and George Papadopoulos examine the impact of recent changes to the Australian Pharmaceutical Benefits Scheme (PBS) on access to new medicines*
By on Mar 14, 2011Isobel Brown and George Papadopoulos examine the impact of recent changes to the Australian Pharmaceutical Benefits Scheme (PBS) on access to new medicines
The news on 25 February that all Pharmaceutical Benefits Advisory Committee (PBAC) recommendations for Pharmaceutical Benefits Scheme (PBS) listing had been referred to the Australian Cabinet has sent shockwaves through the pharmaceutical and biotech industry and leaves the recent industry-government agreement (MOU) in a state of confusion.
This change to the usual process led the Australian Government to defer indefinitely seven medicines recommended for PBS subsidisation by the independent PBAC.
It would seem that all new recommendations for PBS listing will go to Cabinet for consideration, not just those expected to cost more than $10 million in any one of the first four years that a drug is listed on the PBS.
The customary practice of delegation by the Secretary of the Department of Health of medicines under $10 million appears to have been abandoned.
In announcing the deferrals, Minister for Health Nicola Roxon said, In most cases, this is where there are existing or alternative treatments that are already available, or theres no additional clinical benefit, although there may be some other convenient method for taking the medication.
This was despite the PBACs careful evaluation of the evidence, and providing a positive recommendation to the government to list the medicines.
In responding to media questioning Minister Roxon said that it was not possible to give a time frame on when the deferred medicines would be considered again for listing.
The surprise change sees the Australian Pharmaceutical Benefits Scheme to all intents and purposes capped for the very first time.
The PBS is a demand driven program, but growth over many years has seen it come under close scrutiny from Treasury and the Department of Finance.
It appears that the brakes have finally been applied and the impact of this change for industry and consumers access to new innovative medicines is uncertain.
It is also not clear if the PBAC, the industry or consumer groups were advised of this change prior to the announcement by the Minister for Health.
Medicines Australia CEO Brendan Shaw said the government has listened to the advice of its own experts and decided not to take that advice: I think patients and the companies that have developed these medicines are owed a proper explanation.
He said this will hit ordinary Australians where it hurts at the hip pocket.
A stable pricing environment
On 28 September 2010, Medicines Australia signed a MOU with the Minister for Health Nicola Roxon that pledged to promote the efficiency and sustainability of the PBS.
Under the provision of a stable pricing policy environment, the MOU would support a viable and responsible medicines industry in Australia.
In November 2010, Medicines Australia Chairman Will Delaat in an address to the National Press Club in Canberra said a benefit of the MOU to the pharmaceutical industry was that companies will be able to plan ahead and make investment decisions for the medium term with confidence that the policy goal posts arent going to be moved halfway through the game.
The certainty that the Agreement was meant to provide for the sector appears to be in doubt and the immediate problem is how to return the goal posts to their original position.
The robustness and long-term future of the MOU must surely be examined.
Minister Roxon was asked by the media to respond to the Medicines Australia claim that this is the first time that a listing has been deferred and the first time the advice of the PBS is being ignored.
The Minister said, Well, what youre seeing is actually the result of an agreement struck with Medicines Australia, where the pharmaceutical industry was looking for a quicker turnaround of Government considering applications theyve put into the PBS. We are complying with the terms of the agreement and have bought forward all of those applications.
In a speech to the industry at its annual parliamentary dinner, Minister for Innovation, Industry, Science, and Research Kim Carr said, The budget is tight and will not stretch to every worthy proposal put on the table. That includes the drugs listed on the PBS and we will reconsider deferred applications when fiscal circumstances change.
The impact on access to new medicines
Of course, post-global financial crisis, no one would downplay the importance of good economic management that addresses government debt as well as ensures value for taxpayers funds.
However, the indefinite deferrals of seven medicines risks denying Australians innovative medicines that they have come to expect and rely on.
The PBS is an icon of the Australian health system.
Australians and the industry have high expectations of government in delivering access to new medicines at an affordable cost.
Under the previous government, more than $1.3 billion since August 2006 was committed to fund high-cost medicines on the PBS, such as Herceptin for early breast cancer, Lantus and Levemir for diabetes, Strattera, Lucentis for age-related macular degeneration.
Other PBS medicines had their eligibility extended, including the statins, Vytorin and alendronate, Taxotere for prostate cancer, and Remicade for Crohns disease.
The previous government was also one of the first to fund, following a PBAC positive recommendation, the cervical cancer vaccine Gardasil for girls and women aged 12 to 26 at a cost of $436 million over four years.
Under Minister Roxon, the time between a PBAC recommendation to list a medicine and Cabinet consideration has lengthened from 5.5 months in 2007-08 to 7.5 months in 2008-09.
The likely need for the Cabinet to consider all PBAC recommendations is expected to be of concern to consumers and doctors as well as industry.
Consumer organizations appear not to have publicly commented yet on the deferrals and the potential for the recent decision to delay patient access to new medicines.
It is also unclear what this means for Australias National Medicines Policy.
The impact on industry
The impact on the industry will be significant.
There are three immediate areas for concern.
The indefinite and non-transparent nature of the deferral of decisions means companies will be unable to accurately forecast delivery of drugs to Australia.
This may lead to either further delays as decisions are deferred or wastage of medicines that could have been used to treat patients.
Secondly, the deferred products included a drug that was projected to save the PBS money, while four of the six employed cost minimization analyses indicating no additional cost to the PBS, thus leaving companies unclear and unsure about the content of their submission to the PBAC.
It is unclear whether a further submission to the PBAC is necessary or what circumstances need to change to facilitate PBS listing.
Lastly, the MOU seemed to have a number of price decrease concessions from the manufacturers over the next four years, with an understanding that a degree of certainty and transparency of decision-making would ensure over that period.
The lack of certainty and transparency makes planning for patients to have timely access to medicines and vaccines difficult.
An additional barrier has been placed in the PBS listing process that will need to be negotiated and hurdled.
This could lead to further delays and deny patients timely access to medicines.
The impact is felt globally, as information on positive or negative decisions is communicated widely and influences other payers and decision makers.
It remains unclear whether this is a new policy, a temporary policy and, if so, how long will it last.
Isobel Brown is a former PBS Advisor to the Australian Minister for Health & Ageing. George Papadopoulos is president of the consultancy Emerald Corporate Group.