Australian patients deserve careful PBS management

In a submission to a Senate Inquiry which was released this week, Medicines Australia has called on the Government to think carefully about how it manages the Pharmaceutical Benefits Scheme.

“There’s a right way and a wrong way to manage the Pharmaceutical Benefits Scheme,” Chief Executive, Dr Brendan Shaw, said.

“Forming therapeutic groups and having a protracted Cabinet review process are some of the wrong ways to manage the PBS.”

Medicines Australia’s submission to the Senate Community Affairs Committee Inquiry into Consumer Access to Pharmaceutical Benefits, which addresses the creation of new therapeutic groups for new medicines, highlights the potential risks of forming such therapeutic groups for patients, Government and industry.

“The key to having a sustainable PBS that can deliver Australians the new therapies they need in the future is ensuring that companies have some predictability about the environment for the new medicines they bring to the PBS,” Dr Shaw said.

“Forming therapeutic groups in the way the Government did last year is just not the way to go.

“There is a lack of certainty around pricing. There is a lack of process around the formation of such groups. There is a clear lack of clinical definitions and eligibility criteria. The industry lacks confidence in the process.

“There is a disincentive for listing new medicines in the future. There are potential risks to patients from possible higher premiums and the risk that patients may miss out on treatments they need.

“All this points to a deeply flawed approach to forming new therapeutic groups in the PBS.

“Through 2006 and 2007 the pharmaceutical industry worked with the Australian Government, with the support of the then Opposition, to introduce a substantial reform program to the PBS that would provide policy and pricing predictability to industry. The creation of new therapeutic groups compromises that policy goal.”

Medicines Australia’s submission also argues that another area that needs review is the Cabinet approval process for new PBS medicines.

Currently, any medicine that has received a positive recommendation from the Pharmaceutical Benefits Advisory Committee and is projected to cost more than $10 million in any one year needs the approval of Federal Cabinet before it can be subsidised by the PBS.

“Requiring Cabinet to approve a new medicine for PBS listing usually delays the subsidy of these medicines by between six and twelve months,” Dr Shaw said.

“That’s six to twelve months of new treatments that patients are missing out on while the administrative processes of Cabinet grind on.

“The $10 million threshold for Cabinet approval was set at the turn of the century and has not been increased since that time, despite a Productivity Commission recommendation in 2008 that it be increased.

“Doubling the threshold to $20 million would be a sensible regulatory reform that improves the system for patients, industry and, frankly, the Government itself.”

Medicines Australia’s submission to the Senate inquiry can be found here


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