Framework for the introduction of a Managed Entry Scheme for submissions to the Pharmaceutical Benefits Advisory Committee

Page last updated: 23 February 2011

Clauses 26 and 27 of the Memorandum of Understanding state that:

From 1 January 2011, the Commonwealth undertakes to introduce a mechanism whereby the PBAC may recommend PBS coverage at a price justified by the existing evidence, pending submission of more conclusive evidence of cost-effectiveness to support listing of the drug at a higher price.  The PBAC will provide advice in relation to sources of uncertainty and specific evidence required to support a subsequent application.

It is agreed that the application of this mechanism will initially be restricted to submissions where the PBAC agrees that there is a clinical need for the intervention, and when:

  • the PBAC would not otherwise recommend the listing of the drug at the proposed price because the extent or value of the clinical effect is uncertain; and
  • there is a randomised clinical trial (or comparable “fit-for-purpose” evidence), due to report within a reasonable timeframe, which the PBAC is satisfied will resolve the identified area of uncertainty.

The parties note that this does not preclude use of other tools for managing uncertainty (e.g. risk-sharing agreements) where appropriate.

The introduction of the managed entry scheme provision occurs in the context of increasing level of engagement between the Pharmaceutical Benefits Advisory Committee (PBAC) and the Australian Department of Health and Ageing with the pharmaceutical industry with a view to enhancing the quality and strength of evidence provided to decision-makers in reimbursement applications.

The introduction of the managed entry scheme is part of a continuum of early and strategic dialogue to identify and address areas of uncertainty, both clinical and economic.  Some of the other recent activities undertaken include horizon scanning; tripartite meetings between regulators, payers and pharmaceutical company about the design of phase III clinical trials; parallel TGA and PBAC processes, and enhanced post-market monitoring of medicines.

Managed Entry Scheme parameters
A submission would be considered for MES under the following circumstances:

  • where the PBAC accepts that there is a high clinical need for the proposed drug in the indication requested by the sponsor.  The consideration of clinical need would involve an assessment of the prevalence and severity of the disease, whether alternative therapies are available, and the extent to which the proposed drug is expected to meet the residual need;
  • the PBAC considers that new clinical data will resolve the issues of uncertainty in relation to the extent or value of the clinical effect which would have otherwise prevented an initial positive recommendation.  For the RCT-based managed entry scheme, this means that a trial protocol is available for the consideration of the PBAC at the time of the original submission and that the PBAC is satisfied that the results will be available within a reasonable timeframe (such as the period covered by the deed of agreement, usually four years) to enable the reporting of results aimed at resolving the outstanding area(s) of uncertainty.  Noting that, in the future, there may also be other circumstances in which other non-RCT level evidence may appropriate, such as data collection for the purpose of confirming cost-offsets in economic analyses);
  • implementation is via a deed of agreement, as an administrative tool to ensure clear understanding by all parties of the obligations under the MES framework and to ensure that the proposal, if adopted, is being used in conjunction with other existing tools designed to manage the entry of a new drug, as appropriate;
  • any subsequent review by the PBAC of the evidence specified by the deed of agreement would also include a consideration of all other relevant evidence at that time, including evidence from any Risk Management Plan where mandated by the TGA>

The major submission in which the sponsor requests consideration of a managed entry scheme would need to include the following:

  • justification for the claim of high clinical need;
  • all data available at the time of the initial PBAC consideration, including the evidence for surrogate outcomes where relevant;
  • the areas of uncertainty (clinical, economic, financial) as identified by the sponsor;
  • extensive sensitivity analyses to illustrate the potential impact of the identified uncertainties on the initial incremental cost-effectiveness ration (ICER);
  • details of the RCT evidence (or other non-RCT evidence in the future) and a discussion by the sponsor of how such evidence will resolve the areas of uncertainty the sponsor had identified, including those in relation to the extent or value of the clinical effect (or other circumstances in the future) which would be addressed in a managed entry resubmission;
  • anticipated timeframe for resubmission.

As part of the initial MES submission, the PBAC will consider the usual clinical and economic evidence available at the time of the initial consideration, as well as the additional section in the major submission dedicated to the provision of additional evidence in a resubmission under the MES framework.

The comprehensive package enables the PBAC to:
a) make a recommendation based on current evidence at a price it considers acceptable in view of the evidence available at the time of the initial consideration; and
b) identify its key areas of uncertainty for decision making (which may or not be identical to the uncertainties identified in the submission by the sponsor).

While a future price cannot be specified or guaranteed at the time of the initial listing, the PBAC, in line with its practice of making consistent and reasonable decisions, would reconsider a managed entry resubmission and a price change in the event that the identified uncertainties are resolved by the additional data.

Disclosure of information
The following information would be disclosed in the Public Summary Documents (PSDs):

  • the successful submission/package as a managed entry type of submission;
  • the uncertainties identified at the time of the initial consideration by the PBAC;
  • timeframe for resubmission to the PBAC; and
  • a future PSB would also acknowledge the subsequent evidence as agreed under the deed of agreement and any other available evidence considered by the PBAC at a future date.

Not for disclosure
Information consistent with the commercial-in-confidence framework and unpublished data.

Cost recovery
The PBAC and its subcommittees will need to evaluate the RCT evidence (or other non-RCT evidence in the future) once the future submission is received, and in this contest the resubmission would be treated as a major submission and an appropriate cost recovery
process undertaken.  Noting that a general review of cost recovery is due by the latter half of 2011 and will examine this issue.

Deed of agreement
A deed of agreement would be used as a tool to manage/share the risk associated with a managed entry listing.  The deed would specify:

  • the agreed initial price;
  • areas of uncertainty about the extend or value of the clinical effect identified by the PBAC (or other circumstances in the future0;
  • timeframe for resubmission;
  • a statement of intent by the PBAC to reconsider the submission once the RCT evidence becomes available to support the anticipated extent or value of the clinical effect (or other non-RCT evidence for other circumstances in the future);
  • acknowledgment that there may be other areas of uncertainty yet to be identified which could impact on the initial ICER;
  • a customised renegotiation clause acknowledging managed entry as a trigger (currently change in ICER or increase in price is a trigger for renegotiation) however an explicit, generic managed entry clause could be added instead;
  • guarantee of supply at the original price agreed by the company in the event that the RCT results (or other non-RCT results in the future) fail to produce satisfactory evidence; and
  • commitment by the sponsor to disclose information, in the resubmission, about anticipated/unanticipated changes that have an impact on the extent or value of the clinical effect (or other circumstances in the future) or evidence (for example, the company may opt for a different/modified economic modelling).

A submission seeking to list a different drug treating the same condition as a drug already listed under a managed entry scheme, could have the potential to alter the extent of future clinical need, however not the QALY gained.  The drug first to the market will have the trial underway whereas the competitors might not have similar ongoing RCTs.  There could be several possibilities.  For example, the competitor drug may have:

  • surrogate data and ongoing trial, providing similar evidence basis for listing as the first drug;
  • surrogate data and no ongoing trial.  The application to the PBAC would be based on a cost-minimisation analysis in comparison with the first drug using only surrogate outcomes;
  • endpoint data, providing a more certain value proposition at the initial consideration by the PBAC.

The pricing of a subsequent entrant to the market is a matter for the PBAC based on its usual criteria, include the comparability of the two products and the degree of confidence the PBAC would have that an incremental QALY gain modelled for the first drug and confirmed by RCT data could be extrapolated to the second entrant in order to maintain the cost-minimisation analysis.

In summary, a submission that would normally be rejected by the PBAC because of uncertainty around the true extent or value of the clinical effect could be recommended under a managed entry scheme provided the managed entry parameters are met.  This would mean:

  • earlier access to the drugs by patients;
  • earlier access to a subsidised market for the sponsor (at an initial price considered by the PBAC to be acceptable given the available evidence at the time);
  • clear articulation by the PBAC of the critical areas of uncertainty along with comment on whether based on the information provided the trial design is likely to resolve such uncertainty;
  • agreement by the PBAC to review a resubmission once the additional data becomes available and to reconsider the price in light of the new evidence.

Once the managed entry scheme using RCT data as evidence is operational, it is envisaged that the use of other types of evidence for the purpose of a managed entry scheme will be assessed as a second phase in the overall project.  It is expected that the Access to Medicines Working Group (AMWG) will oversee further methodological work during the next 12 months to progress Phase Two of this project.


Published 18 February 2011