E-DRUG: Australia - USA Free Trade Agreement & the PBS
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THE HON TONY ABBOTT MP MINISTER FOR HEALTH AND AGEING
Leader of the House of Representatives
Australia - United States Free Trade Agreement (AUSFTA)
& the Pharmaceutical Benefits Scheme (PBS)
Statement on the Implementation of Australias AUSFTA Commitments
4th February 2005
http://www.health.gov.au/internet/wcms/publishing.nsf/Content/health-mediarel-yr2005-ta-abb008.htm
Introduction
The Free Trade Agreement signed by Australia and the United States
(AUSFTA) in May 2004 included commitments relating to federal health
care programs dealing with the reimbursement of prescription medicines.
These were articulated in Annex 2C (Pharmaceuticals) to Chapter 2 -
National Treatment and Market Access for Goods. In addition in an
associated Exchange of Letters, Australia made a number of additional
commitments to the United States.
Throughout the negotiation of the AUSFTA the Australian Government
protected the fundamental architecture of the Pharmaceutical Benefits
Scheme (PBS) and the integrity of the Pharmaceutical Benefits Advisory
Committee (PBAC) as the pre-eminent advisory body to government on the
listing of medicines on the PBS. The National Health Act 1953 states
that the Minister for Health and Ageing may only add to the PBS
medicines recommended for listing by the PBAC. Consistent with this, no
changes to the Act are necessary to implement Australias AUSFTA
commitments.
Following the conclusion of the FTA concerns were raised in Australia
over the potential impact on the PBS of the commitment to establish an
independent review of recommendations made to Government by PBAC. This
was one of a range of measures agreed to enhance the transparency and
accountability of the operation of the PBS.
The Government remains confident that the commitments it has made will
have no adverse impact on the sustainability of the PBS. On the
contrary, the independent review mechanism, together with other
transparency measures agreed under the AUSFTA, will deliver improvements
in the transparency of the PBS which will be of benefit to the
pharmaceutical industry, prescribers, consumers and taxpayers.
In June 2004 I established a working group to advise on the three key
issues that required detailed consideration before the scheduled entry
into force of the AUSFTA on 1 January 2005. These were i) the design of
the independent review mechanism for PBAC recommendations; ii) providing
opportunities for hearings before PBAC and iii) improvements in
transparency of PBS processes and outcomes. The working group comprised
members of the Pharmaceutical Benefits Advisory Committee, including its
consumer representative, Mr Mitch Messer, and representatives of
Medicines Australia (MA).
In July I released a Public Consultation Document based on the interim
advice from the working group. I would like to thank those individuals
and professional bodies that responded to that Consultation Document.
Those responses confirmed broad community and professional interest in
greater transparency in the decision-making processes of the PBS and
have been taken into account in this Statement.
The working group has now finalised its report and the following
statement reflects input from the working group. I would like to put on
record my gratitude to the members of the working group for their
professional approach to the issues I asked them to consider and for the
helpful and constructive advice they have offered. As recommended by the
working group I will initiate a review of all relevant matters relating
to the implementation of Australias commitments under the AUSFTA within
the first year of the operation of the new arrangements I have decided
to implement.
1. Independent Review Mechanism
In the interests of greater transparency and accountability, Australia
has agreed to establish a review mechanism that will be made available
to an applicant when an application to have a drug added to the PBS has
not resulted in a PBAC recommendation to list.
The relevant AUSFTA text is Annex 2-C which requires the Parties to:
...make available an independent review process that may be
invoked at the request of an applicant directly affected by a
recommendation or determination.
This is clarified in the associated Exchange of Letters that states that:
Australia shall provide an opportunity for independent review of
PBAC determinations, where an application has not resulted in a PBAC
recommendation to list.
It is proposed that the independent review mechanism should operate as
set out below.
Guiding Principles
The independent review process will be independent of the applicant, the
PBAC and of the staff of, or staff employed under contract to, the
Department of Health and Ageing involved in any prior evaluations of the
drug for the indication(s) requested.
An independent review may only be sought by an applicant - that is the
sponsor of the application to the PBAC.
Independent review will only be made available where an application to
the PBAC has not resulted in a recommendation to list.
A convenor will be appointed to manage the independent review function.
The convenor will not conduct reviews but, for each review, will appoint
a reviewer from a panel of identified experts.
The reviewer may seek clarification of the information available by
discussion with the applicant or the PBAC or the Department, as arranged
through the convenor. Following consultation with the convenor the
reviewer may also consult, as appropriate, with other relevant experts.
Any consultations relating to the conduct of the independent review will
be conducted in closed session.
The outcomes of the independent review will be made publicly available
in a similar timeframe to the publication of outcomes from PBAC meetings.
The timeline for the conduct of the independent review will be such that
it involves no additional delay in the PBS processes. There will be no
time incentive, or disincentive, for applicants to seek a review in
preference to making a resubmission to the PBAC.
The findings of the independent review will be reported to the PBAC.
After consideration by the PBAC, the review findings and the outcome of
the PBACs reconsideration of the submission in light of the findings of
the review will be reported to the Minister for Health and Ageing within
15 days of the PBACs consideration.
Applicants will retain the option to resubmit to the PBAC if additional
data or information subsequently become available, but a resubmission
will not be accepted while a review is in process.
Operation of the Independent Review
Management of the independent review process will be undertaken by a
convenor. The convenors role will be to ensure the integrity and
efficient operation of the review process.
Individual reviews will be conducted by a reviewer, selected from a
panel of experts in relevant disciplines including, but not limited to,
clinical pharmacology, epidemiology, pharmacoepidemiology, health
economics, biostatistics, and internal medicine subspecialties.
The applicant seeking a review will identify those issues that are in
dispute and the review will focus on these issues. The issues must
reflect the PBACs reasons for not recommending listing. The convenor
will consider the issues in dispute in appointing an appropriate
reviewer. The reviewer must not be an employee or member of the
evaluation group that undertook the initial evaluation of the
application to the PBAC.
The reviewer will be an individual whose qualifications and expertise
are relevant to the key issue(s) under review.
When there are disparate issues in contention, the reviewer may seek
advice as required after consultation with the convenor. Any person
consulted would be identified in the reviewers report. The reviewer and
all people consulted during a review will be required to lodge conflict
of interest statements with the convenor.
The review will have access to all the information placed before the
PBAC by the applicant, as well as details of the recommendations of the
PBAC together with the reports to the PBAC of its sub-committees on the
application. No new information is to be provided to the reviewer.
Conduct of the review
The applicant will put a request for a review to the convenor in
writing, and provide a statement outlining the issues about which the
review is sought.
The convenor will notify the applicant and the PBAC of the name of the
reviewer selected to conduct the review.
The appointed reviewer must declare to the convenor any real or
potential conflicts of interest. The convenor will ensure that the
reviewer has the credentials to be fair and impartial in conducting the
review.
The reviewer shall take into consideration all available documents,
information and other written material available to the PBAC, including
documents, information and material relating to the issues in dispute
and to arguments and submissions upon the matters under consideration.
However no new information will be considered, beyond that previously
made available to the PBAC.
A review will be completed in a timeframe that allows the reporting back
to the PBAC meeting in the same timeframe as a resubmission.
The convenor will lodge the reviewers report to the PBAC with the PBAC
secretariat no later than 4 weeks before the PBAC meeting at which the
matter will be considered, and at the same time provide copies to the
applicant.
The applicant will be invited by the PBAC Secretariat to provide a
pre-PBAC response to the reviewer's report.
Confidential information will be afforded the same level of protection
as information put to the PBAC.
Management of reviews
Criteria for selection of convenor
The following criteria are proposed for the selection of the convenor of
the independent review mechanism:
* Substantial experience at a senior level in industry, commerce,
public administration, academe, a profession or the public service;
* Knowledge of public administration together with experience in
health care matters;
* Demonstrated commitment to impartiality and objectivity and
evidence of standing and respect within the community;
* Free of actual or perceived conflicts of interest;
* Strong communication skills.
Duties and responsibilities of the convenor
The following duties and responsibilities will be carried out by the
convenor of the independent review mechanism:
* Management of the review process including liaison with the
parties and maintenance of its independence;
* Establishment and maintenance of a panel of experts;
* Facilitation of selection and appointment of experts for
particular reviews;
* Oversight and implementation of rules and procedures relating to
reviews;
* Monitoring outcomes, adherence to rules, procedures and ethical
standards;
* Periodic (annual) reporting on review of the process to the
Government.
It will be the responsibility of the convenor to ensure, at the time of
selecting a reviewer of an application, that the nominee does not have a
real or perceived conflict of interest.
Criteria for selection of expert panel members
The single mandatory criterion for selection of expert panel members is
recognised expertise in a relevant discipline. Relevant disciplines include:
* Clinical pharmacology
* Epidemiology
* Pharmacoepidemiology
* Health economics
* Biostatistics
* Internal medicine subspecialties
Review Outcomes
Publication of the outcomes of the independent review will be guided by
the same principles for publication as are outlined in Section 4
(Transparency Principles). The following documents will be made public:
* the Public Summary Document (PSD - see Section 4) reflecting the
PBACs consideration of the application in question;
* the sponsors reasons for seeking a review (in the form of the
"sponsor comments" section in the PSD);
* the report of the Independent Reviewer;
* the sponsors response to the Independent Review;
* the outcome of the PBACs reconsideration of the application in
question (as a PSD);
The content of the report from the Independent Reviewer, and the timing
of its release, cannot be determined until a Convenor is appointed.
2. Hearings before PBAC
Under the AUSFTA Australia agreed to provide enhanced transparency to
ensure meaningful consultation and accountability in PBS processes. The
relevant provisions of the AUSFTA Side Letter include the undertaking that:
In order to ensure transparency, ...Australia shall provide
...the opportunity for a hearing before the PBAC while it is considering
reports or advice from the technical subcommittees to the PBAC regarding
its application.
The process currently allows for a number of "contact points" between
the sponsor companies and the PBAC process. For example:
* Pre-submission (verbal) - meetings with staff of the Department
of Health and Ageing;
* Provision of written responses to Departmental reports;
* Provision of written responses to PBAC sub-committee reports - an
innovation reflecting the newly created 17-week PBAC cycle of meetings;
* Following a recommendation not to list, discussion with
Departmental staff and the PBAC Chair to facilitate re-submission.
In order to meet Australias undertaking to afford opportunities for
hearings before the PBAC, while at the same time avoiding the process
becoming unworkable.
* Hearings before the PBAC will be confined to specific issues and
limited in scope, duration and frequency;
* Medicines Australia will develop a code of practice to guide
applicants in the most appropriate circumstances for seeking a hearing;
In view of the need for a pragmatic implementation of this
recommendation in the Free Trade Agreement, the PBAC and Medicines
Australia will, by mid-2005, consider the alternative option of a
hearing before the sub-committees of the PBAC.
3. Transparency Principles
Consistent with National Medicines Policy, which states that consumers
and health practitioners should be encouraged to understand the costs,
benefits and risks of medicines, the working group acknowledges that all
stakeholders in the PBS have a need to be informed about PBAC
recommendations.
Limited information is currently published on the Department of Health
and Ageing website, providing only the outcome of each application and a
brief summary of the PBACs reasons.
The following approach will now therefore apply to the transparency of
information:
* Details of PBAC recommendations will be available to the public
in a timely manner following each PBAC meeting;
* A Public Summary Document (PSD) will be generated to provide to
the public information pertaining to PBAC recommendations;
* The information will include sufficient relevant clinical,
economic and utilisation data to enable stakeholders to understand
submissions to the PBAC and the PBACs view of those submissions;
The PSD will provide information on all aspects of PBAC recommendations,
where relevant covering the following:
1. Purpose of the submission - request made to the PBAC
2. Background
3. Registration status
4. Listing requested and PBACs view
5. Clinical place for the proposed therapy
6. Comparator
7. Clinical trials
8. Results of trials
9. Clinical claim
10. Economic analysis
11. Estimated PBS usage and financial implications
12. Recommendation and reasons
13. Context for decision
14. Sponsors comments
The information contained in the PSD will be consistent with that
included in the PBAC minutes pertaining to a particular recommendation.
In consultation the PBAC and the sponsor will prepare a draft of the PSD
which will be reviewed by both parties taking into account the
Commonwealths duty of confidence to sponsors, where such a duty exists.
Both parties will work cooperatively and constructively and negotiate in
good faith to provide a PSD which meets the needs of all stakeholders.
Where circumstances warrant the disclosure of information for which the
Commonwealth has a duty of confidence, the PBAC and the sponsor will
negotiate in good faith to seek a solution which, while protecting
confidential information, will enable stakeholders to have adequate
information to understand PBAC recommendations.
A sponsor may provide on its website comments additional to those
contained in the PSD. Any information or opinion which is published,
including that in the PSD should be balanced, fair, and avoid
subjectivity/bias.
Specific issues relating to content, associated with proposals from
sponsors for listing of drugs that are not recommended for listing after
a first consideration by the PBAC, will be taken into account in
developing the PSD. Further, a delay in the release of a PSD for those
drugs, beyond the cut-off date for the following PBAC meeting, will be
considered by the PBAC with a view to minimising any adverse impact on
those sponsors. If, however, a sponsor of an application which is not
recommended for listing after a first consideration by the PBAC seeks an
independent review of that recommendation, a PSD will be made available
prior to the commencement of the review process.
A Standard Operating Procedure (SOP) will be developed to cover the
preparation of the PSD. The Agreed Guiding Principles for Publication of
PBAC Recommendations annexed to the working group report will also guide
the preparation of the PSD.
To facilitate its implementation the release of PSDs will be phased in
during the first half of 2005. Companies seeking an independent review
as a result of outcomes from the PBACs March meeting will be required
to have the relevant PSD published.
The PBAC will convene a consultation forum with sponsors early in 2005.
The parties (PBAC and sponsors) will monitor the phasing in of the PSD
with a view to advising on the need, or otherwise, of a mechanism for
resolving disputes between the PBAC and sponsors in regard to the
content of a PSD.
12-Month Review
Twelve months after the implementation of these processes a review will
be undertaken to ensure that the provisions set out in the text of the
FTA, as well as the objectives of accountability and transparency for
all stakeholders, are being met.
--
Dr. Ken Harvey
Web: http://www.medreach.com.au Mobile: 0419 181910