Monday, July 25, 2011


Drug companies are threatening to delay listing their products on the pharmaceutical benefits scheme in protest at changes to how drugs are being selected, a Senate inquiry has heard.
An anonymous survey of 50 drug firms conducted by Medicines Australia showed a high level of frustration with the cabinet's new controls over listings of subsidised drugs.
One said it was questioning whether to continue investment in a new skin cancer treatment now that its listing on the PBS was uncertain.
Another 11 major drug companies expressed similar thinking in submissions to a Senate committee set up to scrutinise the government's administration of the PBS.
"Eleven of those companies came back and said they were considering delaying seeking a listing through the TGA (Therapeutic Goods Administration) or PBS," Medicines Australia boss Brendan Shaw told the committee.
"They are telling us, as are many other companies in our membership, that this decision is causing enormous uncertainty for them."
Until February, the government listed drugs on the PBS based on advice from the independent Pharmaceutical Benefits Advisory Committee (PBAC), with drugs costing less than $10 million getting the automatic go-ahead.
But under the new system, cabinet looks at the PBAC's recommendations and holds its own deliberations on which to subsidise and which to defer for six months.
In February it delayed the listings of seven drugs, causing angst amongst industry bodies.
The government says cabinet's controls on listings are intended to save around $20 to $25 million annually but Dr Shaw rejected the reasoning.
"It is a very small amount of money in the scheme of things," he said.
The Consumers Health Forum's (CHF) Carol Bennett was also scathing of the changes, accusing the government of a lack of transparency and politically tainting the PBS.
"CHF has seen an enormous level of consumer concern ... unprecedented in our 24 years," she told the inquiry on Monday.
"What expertise do the 20 members of federal cabinet have that is not currently represented on the PBAC?
"How can we be confident that its decisions are based on anything other than budgetary considerations?"
Ms Bennett also took the government to task for failing to consult with the industry before it opted to defer listings.
Health Minister Nicola Roxon has denied that PBS listings have been automatic, arguing the government has always been given the final say.
PBAC chairman Lloyd Sansom agreed.
"It does not compel the government to give effect to that recommendation," he said.
The process had been in operation since the committee was established in 1953 and had not changed in that time.
"Such advice is advisory to the minister," Mr Sansom said, adding there had been instances when the advice of the committee had not been accepted by government.

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