Health Minister abandons Strategic Agreement with Medicines Australia – Medicines Industry stability and patient safety at risk

Medicines Australia is extremely disappointed with a last-minute decision by Health Minister Sussan Ley to abandon a Strategic Agreement, which casts a shadow over the future stability of the local medicines industry and also puts patient safety at risk.

The purpose of the Agreement was to provide a level of stability and clarity for the local medicines industry in return for supporting a $6.6 billion savings package of which $4.2 billion was to directly impact our members.

Medicines Australia put forward a proposed Strategic Agreement which met all aspects of the Letter of Intent signed by the Health Minister on 27 May

In the spirit of cooperation, Medicines Australia had also offered to work with the Government on serious patient safety concerns which will allow the substitution of biosimilar medications by pharmacists without appropriate evidence that it’s safe and without the consent of a patient’s GP or clinician.

However, the Health Minister has closed down the negotiations and refused to sign the proposed Agreement. We are concerned that this approach will also fall short of addressing safety concerns on biosimilars.

Medicines Australia CEO Tim James said, “It is extremely disappointing that the Health Minister isn’t listening to widespread concerns about patient safety and the need for some stability for the local medicines industry.”

“The fact that the Minister would walk away from signing an Agreement, which meets all the conditions demanded by the Government, sends a bad message to our industry and to all businesses in Australia.”

“Making new, innovative medicines is extremely expensive. It costs on average $2.5 Billion to develop a new medicine for patients. It also takes 12 to 15 years to get a medicine from initial pre-clinical trials to the pharmacy shelf for patients. If we are to continue to invest and invent these treatments then the industry needs to have confidence that governments won’t constantly change their budgetary decisions.”

“The fact that this Government announces significant, unexpected cuts to medicines on the Pharmaceutical Benefits Scheme, which have already been declared cost-effective – and now won’t provide any guarantee that more cuts aren’t coming – has sent a shiver down the spine of this industry.”

“This puts future investment in medicines in Australia at risk. It puts Australians’ access to the latest, innovative therapies at risk.”

“This is a very poor outcome for Australia.”

Biosimilars substitution

Medicines Australia supports the safe use of biosimilars but remains particularly concerned about the Government’s proposed rules for the substitution of Biosimilar medicines.

“We, along with doctor and patient groups, have continually offered to work with the Government so that safe substitution of biosimilars can go ahead and still provide significant savings to the Budget,” said Mr James.

“Regrettably, it appears that the intent of the Government on this issue is oriented more towards a Budget outcome rather than an evidence-based and safety-first outcome.”

“On biosimilars and across our health care system, notions of safety first, of do no harm and of putting into practice the precautionary principle should always come first.”

The Government will approve biosimilars for substitution based on advice from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC made a public statement that substitution of biosimilars will be its default position. This view has created widespread concern across stakeholder groups.

“We respect the role and independence of the PBAC. We support its role in the approval process for substitute medicines for patients,” Mr James said.

“However, the current PBAC position on biosimilar substitution is out of step with comparable international regulators who are taking a much more cautious approach.”

“There simply is not enough evidence at this stage on the automatic, safe substitution of biosimilars without the appropriate oversight of a doctor.”

“This has been a poorly run process by the Federal Government, which has failed to properly consult with the medicines industry, patient groups and doctors.”

Medicines Australia, patient groups, clinicians and international experts will continue to call for stability and safety first, so that Australia retains its international reputation for the safe approval of and access to medicines.”


James Boyce
Phone: 0423 239 265

Alexia Vlahos
Phone: (02) 6122 8503