[e-drug] Australian PBS & Aus. FTA

e-drug
1

E-DRUG: Australian PBS & Aus. FTA
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Warning: giving in to the US may have serious side effects

Sydney Morning Herald
January 4, 2006

[copied as fair use]
http://www.smh.com.au/news/opinion/side-effects-of-giving-in/2006/01/03/1136050441339.html

Australia's enlightened policy on pricing medicines is under threat from
a US-led global drugs industry which is hungry for profits, report
Thomas Faunce and Andrew Searles.

What happens when a government begins to restrain pharmaceutical prices?
Having introduced a 12.5 per cent reduction in generic prices and
recently commissioned a review that expected to strengthen the
Pharmaceutical Benefits Scheme's scientific evaluation of drug prices,
the Australian government is about to find out.

The Federal Government went to the polls in 2004 having promised that
the trade deal with the US would not lead to higher drug prices. It also
promised that the basic cost-effectiveness mechanism of the PBS process
would be unchanged.

There was a specific article in the trade deal facilitating one of the
most serious threats to drug prices: the process of "evergreening",
whereby drug companies introduce minor changes to drugs in order to
extend patents, and to prop up prices. The Federal Parliament legislated
to place an outer limit on this tactical process on so-called
"blockbuster" drugs which sell in large volumes.

The Trade Minister, Mark Vaile, has now disclosed the Government may bow
to drug company lobbying and repeal this anti-evergreening legislation.
Vaile has said the industry will need to show the amendment is
"commercially detrimental, not just philosophically detrimental".

Numerous questions arise. First, what type of evidence should be put
forward? As members of a research program that has been investigating
this issue for the past year, funded by the Australian Research Council
(ARC), we have found no such evidence.

Second, who should evaluate the evidence? Not the Medicines Working
Group established under the trade deal with the US. This was designed to
consider only questions on transparency related to submissions before
the PBS hearings process and independent review. It is not composed of
people with the necessary expertise to evaluate any evidence.

Why has this issue emerged now? In the US, the pharmaceutical industry
is coming under increasing pressure over its vast, uncapped subsidy on
drug prices, coupled with a prohibition on the Government using its
buying power to bargain down prices, as happens in Australia.

Here, the industry is worried about the recent government review of
reference pricing for pharmaceuticals, and about the mandatory 12.5 per
cent price cut in generic drug prices, which it argues has resulted in
lower outlays under the PBS.

The global pharmaceutical industry is concerned about Australia because
our PBS system is often used as an example of world's best practice in
the scientific evaluation of medicine prices for community benefit. It
wants to get rid of this approach around the world. Since the free trade
agreement with the US came into force on January 1, 2004, it has lobbied
hard to stop Australia adopting policies that restrain the price of new
so-called "innovative" drugs.

It wants Australia to adopt the US style of a fully privatised approach
to medicines, in which the industry prices drugs and markets them
directly to patients, not only free of scientific scrutiny about the
cost of production, but also free from independent evaluation of their
products' worth.

This issue is crucial for public health in Australia. The Productivity
Commission recently found, for example, that on average an man aged 65
to 74 costs the PBS 18 times that of a man aged 15 to 24.

In 2001 a conservative government in the Canadian province of British
Columbia retained a PBS-type pharmaceutical reference pricing system
because it was found to save up to 10 per cent of its total drug spending.

The anti-evergreening amendments are likely to play a very important
strategic role in any trade dispute with the US. They will provide
evidence of Australia's "legitimate expectations" in relation to any US
claim that Australia is breaching the "spirit" of the agreement.

Jettisoning these amendments will indicate that this Government lacks
the determination to stand up to the pharmaceutical industry on behalf
of older Australians, and will be the start of a process of attrition of
the PBS process by the multinational drug companies.

Without the PBS system of scientific evaluation of drug prices, we could
find ourselves in a situation not uncommon in the US, where those that
cannot afford good health insurance cover either go without medicine, or
rely on the charity of others.

---
Thomas Faunce is project director and Andrew Searles is the ARC research
scholar in the Globalisation and Health project at the Centre for
Governance of Knowledge and Development, ANU.

Submitted by
--
Dr. Ken Harvey
Australia
http://www.medreach.com.au; Skype: ken_harvey_medreach
VOIP: +61 (03) 9029 0634; Mobile +61 (04) 1918 1910
Ken Harvey <k.harvey@medreach.com.au>

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E-DRUG: Lancet: Big Pharma and the UK government
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The Lancet 14 January 2006; 367:97-98

Big pharma and the UK Government
Joe Collier a
[copied as fair use]

In March, 2005, the UK House of Commons Health Select Committee reported on
the influence of the pharmaceutical industry.1 The committee began its
inquiry in June, 2004, took evidence from 50 witnesses during nine public
sessions, made four site visits (including trips to Brussels and Australia),
and received nearly 160 written submissions. Its overall findings were
clear: the influence of the pharmaceutical industry is enormous and out of
control. The committee learned that while the industry's influence was
traditionally targeted at health professionals, today, big pharma's
tentacles penetrate much more widely, reaching patients, health departments,
regulators, managers, researchers, and medical charities, and then on to
academics, the media, carers, school children, and politicians. Other
parallel issues also arose. Could patients be disadvantaged by the fact that
the large multinationals design, sponsor, orchestrate, and control the
publication of all the key drug trials; produce, market, and promote the
medicines we take; and virtually determine how medicines are prescribed? Big
pharma works hard and spends vast amounts to gain influence, and a key
question facing the committee was whether such a pervasive influence could
be in the interest of public health? Moreover, if the influence of big
pharma is so ubiquitous, and assuming that its aims are achieved by legal
means, can anything be done to curb its effects?

Most of the committee's 48 recommendations were directed at the UK
Department of Health. Other recommendations reflected wider concerns and
addressed, for instance, the Department of Trade and Industry, universities,
patients' and professional groups, and, of course, big pharma itself.

The Government published their response in September.2 In many areas, the
Government intends to make changes and these are to be welcomed. But the
response reveals how aspects of Government remain aloof and out of touch.
The committee's most telling recommendation was the call for a public
inquiry into the workings of the Medicines and Healthcare Products
Regulatory Agency‹Members of Parliament had been persuaded that the Agency
was not competent to undertake its duties as a guardian of public health.
Government declined a public inquiry. Instead it opted for a regular‹perhaps
4-yearly‹review, which would be ³informed by expert knowledge²2 and would
examine whether the Agency was meeting the ³needs of patients and the
expectations of society².2 This is an interesting solution and if the
process is transparent (an aspiration asserted repeatedly in the
Government's response), the reviewers independent (a problem in the past),
and the findings published (a big question), it would be an acceptable
compromise.

The Government also responded positively to several other recommendations
and so the Department of Health and the Medicines and Healthcare Products
Regulatory Agency will now: pre-vet promotional material for all new
products; work more closely with the industry's Prescription Medicines Code
of Practice Authority to improve the efficiency and effectiveness of
promotion control; work on ways to curb explosive marketing at the time of
launch; reduce allowances (rewards) through the Pharmaceutical Price
Regulation Scheme when a company has breached advertising regulations or
misled the Agency about research findings; review how the Pharmaceutical
Price Regulation Scheme rewards innovation; undertake random checks of the
data supplied in licensing applications; strengthen its pharmacovigilance
arrangements; and publish an account of the circumstances and lessons
learned after withdrawals of UK licensed medicines. Time will tell to what
extent these promises will be honoured.

Naturally, there were recommendations that the Government rejected and these
give important insights into governmental thinking. The recommendation that
the Government's sponsorship arm for the UK drugs industry should be moved
from the Department of Health to the Department of Trade and Industry was
rejected. So, the same Department‹indeed the same Minister‹responsible for
negotiating drug prices for the UK National Health Service remains also
responsible for ensuring that the health-service spend on drugs is
sufficient to keep UK industry profitable. It is also the department that
spearheads policies designed to keep UK industry competitive
internationally. This conflict of interest was an anathema to Members of
Parliament, but Government seems blind to the issue. However, it is this
closeness to industry that shapes (and distorts) how our regulators think.
In response to the recommendation that a drug should not be launched until
full clinical trials data are put on a public register, the Government said
this was not possible, because it would require a change in European Union
regulations. In reality, the reason the recommendation was rejected was
almost certainly because it would interfere with drug company sales‹a change
in European Union regulations would not be required, simply the introduction
of the condition that the National Health Service would not buy drugs until
the requirements for a trial data register had been fulfilled. A similar
industry bias would account for the Government's rejection of
recommendations to more strictly control drug promotion to young health
professionals, or to adopt a national drugs policy, and was also probably
behind Government's lukewarm response to the idea of strengthening the
influence of local drugs and therapeutics committees. More importantly,
industry bias would account for the lack of acknowledgment in the
Government's response to the committee of the inequity of the current
situation.

Much good has come out of the Health Select Committee's report. Not only has
it brought the issue to the attention of the wider public, but it has also
prompted some changes in Government practice and revealed some of its
thinking. However, even if Government had adopted all of the
recommendations, the excessive influence of industry will not be curbed
unless and until all those involved with drug companies take a stand and
question their own relations with them. Patients' welfare will continue to
be vulnerable while health policies and practice are dominated by the will
of big pharma.

a JC has been an adviser to the UK House of Commons Health Select Committee
since 1993 and served in this capacity on the inquiry into the influence of
the pharmaceutical industry.

References
1. House of Commons Health Committee. The influence of the pharmaceutical
industry. Fourth report of session 2004­2005. March 22, 2005:
http://www.publications.parliament.uk/pa/cm200405/cmsel…
(accessed Nov 22, 2005).

2. Government response to the Health Committee's report on the influence of
the pharmaceutical industry. September, 2005:
http://www.dh.gov.uk/assetRoot/04/11/86/08/04118608.pdf
(accessed Nov 22, 2005).

from Nathan Ford <nathan.ford@london.msf.org>