9 Variation to Unit Costs of Drugs for Section E of a Submission to PBAC

9.1 Introduction

The financial analysis in a submission prepared according to Subsections E.2 - E.4 of PBAC Guidelines takes the perspective of the PBS/Repatriation Pharmaceutical Benefits Scheme (RPBS). This means that cost components borne by payers other than the Australian Government are excluded from this financial analysis.

In practice, this means that non-PBS/RPBS drugs, over-the-counter drugs or drug delivery systems are excluded from this financial analysis because they incur no direct financial cost to the PBS/RPBS. This also means that the range of patient co-payments is subtracted from each PBS/RPBS drug’s unit cost.

9.2 Calculating the unit cost of drugs from the perspective of the PBS/RPBS

For nearly all drugs included in the financial analysis, from the perspective of the PBS/RPBS, the unit cost to be used is the DPMQ minus the weighted average patient contribution.

There are currently six patient co-payment categories under the PBS, which are grouped into three co-payment amounts. Current information about the PBS/RPBS patient contribution rates are available on the PBS website.

The highest co-payment is paid by General patients, a lower co-payment is paid by Concessional and Repatriation patients and under the General patient Safety Net provisions, and there is no co-payment under the Concessional patient and Repatriation patient Safety Net provisions. The disaggregation of usage across these patient co-payment categories should be reported for all currently listed drugs in the financial analysis for the most recent 12 months available. The relevant co-payment should then be subtracted from the relevant DPMQ to calculate the unit cost to the PBS/RPBS in each category.

The disaggregation for the proposed drug should normally be assumed to be that of the closest therapy that is currently listed (and specifically the main comparator if it is PBS-listed).

For Highly Specialised Drugs, the ex-manufacturer’s price should be used for the proportion of product dispensed for other patients, without subtracting any patient contribution. For the proportion of product dispensed through private hospitals, the standard patient contribution should be subtracted based on the six patient co-payment categories above.

A proforma for estimating the extent of use and financial implications of the proposed drug is provided in an Excel format to aid sponsors in the preparation of submissions (this corresponds to Section E of the PBAC Guidelines). This proforma can be accessed on the PBS website.