Source: Herald Sun – Sue Dunlevy.
The expert government committee that decides which medicines deserve a government subsidy state $50,000 is the rough benchmark price it puts on the value of one quality year of life.
That’s the same price former Pharmaceutical Benefits Advisory Committee chief Lloyd Sansom said was being used in 2004.
The 17 member Pharmaceutical Benefits Advisory Committee is the independent government body charged with deciding which medicines should get a subsidy. The government cannot list a medicine on the Pharmaceutical Benefits Scheme unless the PBAC makes a recommendation in favour if its listing.
Its chair Sue Hill said the $50,000 figure is roughly equivalent to the 20-30,000 pound figure used in the UK and is roughly linked to per capita gross domestic product.
If the PBAC decides a medicine should be subsidised Australian patients will pay no more than $36.90 for the drug if they are a general patient and just $6 if they are a pensioner and concession card holder.
PBAC chief Sue Hill says the committee’s first job is to determine if a new drug is less toxic or improves survival or quality of life when compared to existing treatments.
If the drug is more effective the committee must then judge whether the price the company wants the government to pay is cost effective.
That job has become much more difficult with medical advances targeting new treatments at smaller groups of patients with certain unique biological problems or gene mutations.
Fewer people will benefit from these treatments and drug companies argue they must charge more to recoup the cost of developing the drug from a smaller patient group.
“We don’t say if it costs under $50,000 yes; and if it is over $50,000 no,” says Sue Hill.
In deciding whether such high cost medicines are cost effective the PBAC looks at what it currently costs to treat patients, the severity of the disease, whether the medicine is preventive and whether it is a cure or a treatment.
It will also take into consideration whether there are any other effective treatments for the disease or condition and it will consider equity of access if the medicine is high cost.
If the medicine only helps the elderly or if it will be used widely in the population the price the government will pay may not be as high.
If it does improve a sick person’s life a judgment must be made whether the medicine will give them a year in full health or a year compromised by disability in which case the price paid will be lower.
Medicine companies have been complaining that it is proving harder to get medicines through the PBAC.
A report on cancer drugs earlier this year found one in four new cancer medicines failed to get a subsidy and that drug companies had to try on average two and a half times to get a positive recommendation.
This has led to the formation of a Cancer Drugs Alliance which is calling for a UK style cancer drugs fund in Australia to provide immediate access to new cancer medicines while the PBAC is overhauled.
Health Minister Peter Dutton says since coming to Government the Coalition has been able to list drugs at more than twice the rate of the previous Labor Government by streamlining the listing process.
And he is critical of the UK Cancer Drugs Fund which he says was “very much a response to particular problems faced by the UK and has not been without criticism”.
“Different countries operate distinct medical and pharmaceutical pricing and subsidy systems and comparisons are difficult,” he says…read the full story.