E-DRUG: Australian Pharmaceutical Benefit Scheme
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[Not all E-druggers may have access to Internet. Peter Mansfield
referred to this article in his email. The Sydney Morning Herald,
saturday 4 December, gives an excellent overview of the discussion
on the Australian PBF. Copied as fair use.
Let's open the discussion about the case. The Australian PBF is a
role model for making medicines reasonably affordable. WB]
http://www.smh.com.au/news/9912/04/review/review3.html
Bitter pill
Battle lines have been drawn over our pharmaceutical benefits scheme,
all prompted by a little blue pill, reports Marian Wilkinson.
One of the most publicised drugs in modern history, Viagra, is about
to play a key role in determining the future of Australia's unique
pharmaceutical benefits scheme (PBS).
Why and how this happened sheds some light on one of the most intense
lobby campaigns under way in Canberra right now to review the PBS.
A few months ago, a senior executive of the American drug giant
Pfizer Inc, the maker of Viagra, talked to a canny lobbyist and
public relations man for the drug industry, Bill Royce, a former
senior media adviser to the Health Minister, Michael Wooldridge.
Pfizer's man, Dudley Schleier, discussed launching an extraordinary
assault on the PBS by taking a legal case against the scheme's key
Pharmaceuticals Benefits Advisory Committee (PBAC), which advises the
minister on all new drugs to be listed under the scheme.
In June, PBAC recommended that Viagra should not be listed, a
decision which cost Pfizer millions. PBAC argued there was a cheaper
alternative, Viagra was not cost effective and there was a risk of
significant misuse of the drug, blowing out its costs to the PBS.
PBAC's advice saved the government and the scheme an estimated $50
million, but Pfizer was stunned. The drug had been approved as safe
and was available, but without a subsidy it would cost patients
hundreds of dollars, not the $20 it would under the scheme. Sales
would be negligible. Pfizer wanted to fight back.
Royce, who knew Wooldridge well, advised Schleier: call the minister
and let him know before the case hits the court.
The Pfizer call was a major signal to the Health Minister. Since the
last election, sections of the industry had been lobbying to change
fundamentally the processes of how drugs were listed under the scheme
and attacking the PBAC.
Within a few weeks of Pfizer filing the papers in the court,
Wooldridge appeared increasingly to be listening to industry
complaints about the committee.
At the same time, Wooldridge's key staff pharmaceutical adviser went
to work for Pfizer.
This week, Wooldridge's office finally admitted he was considering a
major review of the PBS, in particular the PBAC and how drugs are
listed. The review was being discussed with the Industry Department.
Since then, Wooldridge has said little.
As consumer groups, AIDS organisations and the Australian Medical
Association sought to defend the integrity of the PBS, both the
pharmaceutical industry and Wooldridge's office emphatically denied it
was under any threat.
"The PBS must stay," said Pat Clear from the Australian
Pharmaceutical Manufacturers' Association. But he added: "The
Government has recognised that to ensure companies are able to
continue to provide Australian patients with new and improved
medicines and invest in medical research and development in
Australia, the operating environment of companies needs to be
reviewed.
"One of the issues is the low prices of certain products compared
with other markets."
According to some health officials, if the industry is granted the
reforms it wants, the cost of the PBS could blow out by $1 billion.
Inevitably, it would put the PBS under severe pressure, leading for
calls for higher co-payments for prescriptions and even private
insurance for some pharmaceuticals.
In short, it would be a threat to Australia's system of low-cost
drugs for all.
While the industry dismisses these claims, the PBS is already under
strain. It costs the Government more than $2.5 billion and its budget
is growing at 15 per cent a year.
At the same time, the industry wants more new drugs listed for
subsidy, more quickly. For the chairman of the PBAC, Professor Don
Birkett, who heads the committee of doctors and academics from bodies
like the AMA and Pharmacy Guild and the Doctors' Reform Society,
industry demands are obvious. "Industry seems to be seeking higher
prices and that means they want to get more money out of the system."
he said.
Publicly, the industry campaign against the PBAC is that its
processes lack transparency or any appeals mechanism.
However, the PBAC itself has sought over the years to make the
process more transparent, only to be told by the Government that the
act requires it to keep commercial material in confidence. It is
currently continuing to offer the industry a more transparent
process.
Privately, however, the complaints of some companies go to the heart
of how the PBAC has pioneered an evidence-based approach to assessing
new drugs and their cost-effectiveness.
In practice, this means the PBAC acts as a gatekeeper on the price of
drugs in Australia, forcing companies to provide data showing that
their new drug does not duplicate other, cheaper ones on the market.
If this cannot be established, the company will not get the high
price it demands.
Until recently, Wooldridge was a strong supporter of the PBAC,
especially its evidence-based approach, but he now appears to be
listening more closely to industry complaints.
Wooldridge's more open approach to industry appears to have begun
before the last election when, under pressure from the companies, the
Government established the Pharmaceutical Working Industry Group to
balance the demands of health and industry.
Both ministers and key drug company officials were on it, including
Dudley Schleier from Pfizer. The Government also recommitted itself
to industry subsidies to offset the low drug prices in Australia.
In the election of 1998, Pfizer gave some critical support to the
Government, financially backing the Liberal member for Parramatta,
Ross Cameron, whose electorate houses its Sydney factory.
Cameron worked closely with the company, so closely indeed that his
staffer went to work for it. Most of the big drug companies held
joint fundraisers for both Cameron and Wooldridge, and the
Opposition's then health spokesman, Michael Lee.
Just days after the election Wooldridge accepted an invitation to
speak at a conference sponsored by Pfizer on health-care reform.
But in another move that would prove significant, Wooldridge's media
adviser, Royce, went to work for the public relations firm Hill and
Knowlton, which works with many of the drug companies.
This year Royce advised two companies in important fights with the
PBAC. One was Pfizer and the other was Orphan Australia, in
Melbourne, distributor of the controversial heroin addiction
treatment Naltrexone. Both companies took legal action against the
PBAC soon after they were knocked back for a subsidy.
A Health Department official questioned in the Senate estimates
committee this week said Naltrexone's rejection by the PBAC was
principally on the grounds that evidence was not there that the
treatment worked well or was cost-effective.
But the campaign launched over Naltrexone, with Royce's advice, was
extraordinarily successful. After Orphan lodged its challenge in the
Federal Court, PBAC's lawyers wrote to the company rescinding its
decision and agreeing to reconsider the case.
But as one industry source put it, the importance of the Naltrexone
case was its impact on Wooldridge: "The Government learnt as a result
of Orphan's actions about some of the ways that the pharmaceutical
benefits branch and PBAC does its business and it's now looking at
some of these issues of process which the industry has been
complaining about for some time."
The Naltrexone case opened the way for other drug company executives
to put their complaints to Wooldridge's office and that of his
parliamentary secretary, Grant Tambling.
And the list of complainers is long. The PBAC this year has
recommended against a number of drugs from big companies - most
controversially Pfizer with Viagra.
When Pfizer filed its court challenge to the PBAC, Wooldridge had
already approved a review of aspects of the listing process, which is
now being run by Senator Tambling. But before Tambling even reported
on this review, health officials learnt that Wooldridge was
examining, with the Minister for Industry, Nick Minchin, a major
review of the scheme - and the PBAC.
The sensitivity around the inquiry is enormous. Many public health
organisations will fight any frontal assault on the PBS and PBAC.
Wooldridge will find it difficult to announce a review just as Pfizer
is set to go to court in Sydney on Wednesday against the PBAC. It
would look too much like walking away from his own advisers. But the
decision on whether or not the PBAC will even fight the Viagra case
in court is not yet known. If PBAC rescinds the Viagra decision
before Wednesday, the case will fold and it will be a good indication
that the review of the PBS may go ahead quickly.
Then the real political battle will begin over what kind of PBS both
the drug industry and health advocates can live with.
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