Access to Medicines Working Group Interim Report to Government July 2008

Page last updated: 18 November 2008

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The Access to Medicines Working Group (AMWG) is an ongoing joint Department of Health and Ageing (DoHA) and Medicines Australia (MA) working group established in 2006 as a result of the reforms to the Pharmaceutical Benefits Scheme (PBS).

The purpose of the AMWG is to:

  1. Provide strategic oversight of joint activities undertaken by the Department and Medicines Australia to enhance the PBS processes.
  2. Consider issues relating to timely and appropriate access to effective new medicines on the PBS following the PBS reforms.

The full terms of reference for the AMWG are at Attachment F and the current full Work Plan is at Attachment G.

The AMWG has met four times, with the last meeting held on 18 April 2008. The next meeting is scheduled for August 2008. A communiqué from each of the meetings is available on the Department’s website.

The AMWG Work Plan identifies 15 projects, grouped under six areas specified in the Terms of Reference. Three current priority areas for consideration have been agreed:

  • The effects of statutory price reductions on medicines in Formulary 2 (F2) on the listing of new Formulary 1 (F1) medicines;
  • Managing uncertainty of evidence in the Pharmaceutical Benefits Advisory Committee (PBAC); and
  • Streamlining the registration process for new medicines.


Department of Health and Ageing Medicines Australia
Mr David Learmonth
AMWG Co-Chair
Deputy Secretary
Mr Will Delaat
AMWG Co-Chair
Chairman of the Board
Mr Stephen Dellar
First Assistant Secretary, Pharmaceutical
Benefits Division
Mr David Grainger
Director, Corporate Affairs and Health Economics, Eli Lilly
Ms Diana Macdonell
Assistant Secretary, Pharmaceutical Evaluation
Dr Brendan Shaw
Executive Director
Health Policy and Research
From August 2007
Mr Andrew Mitchell
Strategic Advisor, Pharmaceutical Evaluation
Mr Ian Noble
Associate Director, Market Access and
Product Support, Merck Sharp & Dohme
From April 2008
Former Members
Ms Rosemary Huxtable
First Assistant Secretary, Pharmaceutical
Benefits Division
From April 2007 to December 2007
Mr Duncan O’Brien
Director, Economic Operations
Medicines Australia
From April 2007 to August 2007
Mr Steven Crowley
Director, Health Economics and Outcomes
Research, Janssen-Cilag
From April 2007 to March 2008

Executive Summary

The major attachments to this report (Attachment A and B) detail the AWMG’s exploration of two areas: the effects of statutory price reductions on the listing of new medicines and managing uncertainty in the assessment of medicines for listing on the PBS. A summary of these papers is provided below.

The Effects of Statutory Price Reductions on the listing of New Medicines

The Department and Medicines Australia, both independently and collaboratively, have examined the possible impacts on the listing process of mandatory price reductions from 1 August 2008 for medicines on the new F2 formulary as part of their discussions through the AMWG. Both parties agree that, in principle, a subset of new medicines seeking listing on the PBS may be impacted in the future as a result of PBS reform.

The AMWG agrees that there should be no departure from the fundamental principle of cost effectiveness in evaluating new medicines. The Department notes that changes that affect cost effectiveness are influenced by many policy changes over time and the price reductions applying from 1 August 2008 are inherently no different from previous policies that lead to pricing changes. These include Therapeutic Goods Premiums, Brand Price Premiums, Weighted Average Monthly Treatment Cost and the 12.5 percent policy, all of which could reduce the price of comparator medicines.

In AMWG discussions, the Department has maintained that any issues that arise will be relatively contained and that the current system of evaluating medicines for listing on the PBS is sufficiently flexible to handle such issues. MA maintains that this is a ‘problem’, that it will be more widespread and that a way of managing this needs to be agreed now.

Both parties have discussed several options for managing the issue including substituting an F1 comparator for clinical and/or price comparisons where an F2 product would otherwise normally be the comparator.

Managing Uncertainty in the Assessment of Medicines for listing on the Pharmaceutical Benefits Scheme

Uncertainty in the context of Pharmaceutical Benefits Advisory Committee (PBAC) submissions and evaluations refers to areas where the evidence, results or conclusions provided are unclear, ambiguous or open to various or different interpretations. Uncertainty can impact on four important aspects influencing decision making – clinical, economic, utilisation and financial. As a general rule, the more complex the submission, the higher the likelihood that there will be some areas where there are shortcomings in the available evidence that will need to be considered by PBAC when deciding whether to recommend a medicine be listed on the PBS.

The result of increased uncertainty is an increase in the rate of rejections. This in turn can lead to an increase in the rate of resubmissions, which places a further demand on the resources and analysis required to evaluate the medicine. This in turn can further increase resource demand on industry and the PBAC and can delay the listing of new medicines.

This paper discusses what gaps in the evidence arise in relation to the listing of medicines on the PBS, examines what the PBAC already does to address the gaps and identifies areas where further work may be required. It is accepted that while every effort can be made to minimise uncertainty it cannot be eliminated and therefore the remaining uncertainty needs to be managed. A work plan is being developed around these identified areas for the AMWG to consider at its next meeting in August 2008.

Other papers

The remaining Attachments detail other areas of work of the AWMG.

Streamlining the listing of New Medicines

The AMWG has been examining ways in which the time taken to have new medicines listed on the PBS can be reduced and has received ‘in principle’ agreement from the TGA on ways to decrease the time to have new medicines registered on the Australian Register of Therapeutic Goods.

The AMWG will also continue to examine ways to both leverage this improvement in regulatory time lines and also build improvements into the PBS process to facilitate earlier times to listing. All parties have agreed this cannot be at expense of rigorous assessment of safety, efficacy and cost-effectiveness.

Increased public input into Pharmaceutical Benefits Advisory Committee Decision making processes: Publication of PBAC agendas

The AMWG has been working on ways to provide better input by interested parties to PBAC deliberations through increasing the transparency in PBS listing processes. To this end agreement in principle has now been reached between DoHA, MA and the PBAC that a version of the PBAC agenda will be made publicly available 4-6 weeks before the relevant meeting. This agenda will be published on the Department’s website and will include the generic and trade name of the medicine, the sponsor and the purpose of the submission. No details will be published for submissions intended solely to affect pricing relativities.

This initiative will give interested people and organisations opportunities for direct input into the PBAC, and a better understanding of the decision making process. Discussion is continuing between the Department and MA on the details around implementing this process from mid September for the November 2008 PBAC meeting.

Future Work for the Access to Medicines Working Group

The AWMG has identified two further areas where it would like to direct some future efforts. The first area is developing an improved understanding of the PBAC decision making process. This would help industry by improving its PBAC submissions and would help the PBAC in its decision making.

The second is on gaining a mutual understanding of what innovation means in the drug development process. This would include an examination of the nature of innovation in the pharmaceutical industry and how the incentive of PBS subsidy shapes that innovation.

List of Attachments