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The Pharmaceutical Benefits Scheme 2003-2004.

The Pharmaceutical Benefits Scheme (PBS) grew by 8% in 2003-04; a slower rate than the 12.0% pa average growth over the last decade. Nevertheless, the sustainability of the Scheme remained an ongoing concern given an aging population and the continued introduction of useful (but increasingly expensive) new medicines. There was also concern that the Australia-United States Free Trade Agreement could place further pressure on the Scheme. In 2003, as in 2002, the government proposed a 27% increase in PBS patient co-payments and safety-net thresholds in order to transfer more of the cost of the PBS from the government to consumers. While this measure was initially blocked by the Senate, the forthcoming election resulted in the Labor Party eventually supporting this policy. Recommendations of the Pharmaceutical Benefits Advisory Committee to list, not list or defer a decision to list a medicine on the PBS were made publicly available for the first time and the full cost of PBS medicines appeared on medicine labels if the price was greater than the co-payment. Pharmaceutical reform in Victorian public hospitals designed to minimise PBS cost-shifting was evaluated and extended to other States and Territories. Programs promoting the quality use of medicines were further developed coordinated by the National Prescribing Service, Australian Divisions of General Practice and the Pharmacy Guild of Australia. The extensive uptake of computerised prescribing software by GPs produced benefits but also problems. The latter included pharmaceutical promotion occurring at the time of prescribing, failure to incorporate key sources of objective therapeutic information in the software and gross variation in the ability of various programs to detect important drug-drug interactions. These issues remain to be tackled.

Journal Article↗

Distributional impact of higher patient contributions to Australia's Pharmaceutical Benefits Scheme.

This paper uses NATSEM's Pharmaceutical Benefits Model to analyse the effects of a hypothetical 25 per cent rise in patient contributions to prescribed medicines under Australia's Pharmaceutical Benefits Scheme (PBS). The model, based on microsimulation techniques, is able to provide a much broader range of outcomes information, at a much greater level of detail, than is possible with traditional methods. Higher patient contributions are analysed in terms of their impact on the government to patient split in PBS costs, as well as the distribution of such costs across age groups, family incomes, family types and 36 prescribed medicine types. Also considered are changes in the shares of family disposable incomes spent on prescribed drugs arising from the higher patient contributions.

Adolescent↗

Are Australians able to access new medicines on the pharmaceutical benefits scheme in a more or less timely manner? An analysis of pharmaceutical benefits advisory committee recommendations, 1999-2003.

OBJECTIVE: Timely access to necessary medicines that Australians need is one of the four pillars of the Australian Government's National Medicines Policy. We were interested to determine whether there was a change in the time taken for medicines to be listed once recommended by the Pharmaceutical Benefits Advisory Committee (PBAC). METHODS: Descriptive statistics were used to show the pattern of recommendations for PBAC meetings from 1999 to 2003. For successful recommendations, we developed a linear regression model to analyze the time to list from the PBAC meeting to date of listing (time to list). The model determined whether this time had changed over the 4-year period, and the reasons for any changes. RESULTS: The PBAC made 307 positive recommendations at its 17 meetings over the study period. Ninety percent resulted in a Pharmaceutical Benefits Scheme (PBS) listing on or before April 1, 2005. Eighty-two percent of the recommendations made in 1999 and 2000 resulted in early or on-time listings. In 2001, 2002, and 2003, the comparable proportions were 67%, 68%, and 75%. Mean times to list for the years from 1999 to 2003 were similar (approximately 23 weeks), except in 2001 where it was 30 weeks. CONCLUSIONS: Over the study period, 90% of all PBAC recommendations resulted in a PBS listing. In 2001 there was a statistically significant increase in the mean time to list. In addition, it appears that recommendations for new listings and new indications (medicines that are likely to result in substantial Government expenditure) were associated with a longer time to list.

Advisory Committees↗

Cost-effectiveness of prescribing statins according to pharmaceutical benefits scheme criteria.

OBJECTIVES: (i) To analyse how well Pharmaceutical Benefits Scheme (PBS) criteria for prescribing lipid-lowering therapy identify people most at risk of coronary heart disease (CHD); and (ii) to determine the cost-effectiveness of primary prevention therapy with pravastatin according to these criteria in Australia. DESIGN: (i) Analysis of targeting of CHD risk according to PBS criteria; (ii) cost-effectiveness analysis for pravastatin as primary preventive therapy (40 mg/day), with a 20-year projection from 1999. PARTICIPANTS: (i) Men and women aged 25-69 years from the 1989 National Heart Foundation Risk Factor Prevalence Survey; (ii) Australian men and women, aged 25-85 years, excluding those with diabetes and existing CHD. MAIN OUTCOME MEASURES: (i) Proportion eligible for lipid lowering treatment according to PBS criteria within 15-year risk of CHD mortality groups; (ii) average net cost in Australian dollars ($) per year of life saved (YOLS), with 80% uncertainty ranges (UR). RESULTS: (i) PBS criteria do not adequately identify those most at risk of CHD, as only 61% of Australians (aged 25-69 years) with a greater than 10% 15-year risk of CHD mortality were eligible for treatment; and 11% of those at low risk of CHD mortality (< 2.5% over 15 years) were eligible for treatment. (ii) Cost-effectiveness of treatment according to PBS criteria was estimated at $110,000 (80% UR, $96,000-$150,000) per YOLS for men and $87,000 (80% UR, $80,000-$130,000) per YOLS for women. As an indicator of the likely recurrent annual costs, total first-year treatment costs (excluding the costs of non-compliers) were estimated at $940 million. Assuming compliance of 50%, cost-effectiveness of treatment was markedly improved using 32.5% 15-year risk of CHD mortality as a cut-off, with ratios of $31,000 (80% UR, $27,000-$40,000) per YOLS for men and $39,000 (80% UR, $33,000-$53,000) per YOLS for women. First-year treatment costs of $940 million were the same as treating according to PBS criteria, but absolute health impact in terms of deaths averted and years of life saved was more than doubled. CONCLUSIONS: While PBS criteria do target patients at risk of CHD, there is room for improvement in identifying those most at risk of CHD, and treatment according to PBS criteria is not likely to be the most cost-effective. For optimal cost-effectiveness, targeting of therapy for primary CHD prevention needs to be based on population-specific, multivariable risk.

Adult↗

The Pharmaceutical Benefits Scheme and the shifting paradigm of welfare policy.

This paper describes the design and operation of the Pharmaceutical Benefits Scheme and then proceeds with an analysis of current policy deliberations which identifies an extension of the market as predominant trend. The paper demonstrates that the conditions which historically sustained the scheme are now present to a lesser extent. The Pharmaceutical Benefits Scheme has functioned as a universalist welfare program which conferred onto the Commonwealth Department of Health substantial powers vis-à-vis drug suppliers and professional groups. This position of dominance has been eroded, with challenges to established arrangements arising, in particular, from the enhanced bargaining position of business and wider pressures operating on the Keynesian welfare state.

Australia↗

Drug policy down under: Australia's pharmaceutical benefits scheme.

Australia has had a government subsidized universal system of pharmaceutical provision for 50 years. The Pharmaceutical Benefits Scheme (PBS) consumes around 14 percent of total government health care expenditures and has grown substantially in both range of drugs covered, and expenditure since it was first introduced in 1950. It incorporates patient copayments (with differentials for the general population compared with concessional beneficiaries). Prior to listing a drug on the PBS it is subject to a rigorous cost-effectiveness analysis.

Australia↗

Support for trials of promising medications through the Pharmaceutical Benefits Scheme. A proposal for a new authority category.

I propose a new authority category for the Pharmaceutical Benefits Scheme (PBS)--authority to prescribe only within a controlled trial. This would benefit both the PBS and the pharmaceutical companies, but the main winners would be the Australian population, who would obtain better value for money spent by the PBS. Drugs which show promise, but for which conclusive evidence of advantage over standard therapy is lacking, or drugs for new indications, could be prescribed within a randomised trial. PBS support would fund a substantial portion of the trial costs. This proposal would greatly boost local and international investment in Australian medical research.

Australia↗

Private health insurance and the Pharmaceutical Benefits Scheme: how effective has recent government policy been?

The cost to government of the Pharmaceutical Benefits Scheme (PBS) is rising at over 10 percent per annum. The government subsidy to Private Health Insurance (PHI) is about $2.4 billion and rising. Despite this, the queues facing public patients - which were the primary justification for the assistance to PHI - do not appear to be shortening. Against this backdrop, we seek to evaluate recent policies. It is shown that the reason commonly given for the support of PHI - the need to preserve the market share of private hospitals and relieve pressure upon public hospitals - is based upon a factually incorrect analysis of the hospital sector in the last decade. It is similarly true that the 'problem' of rising pharmaceutical expenditures has been exaggerated. The common element in both sets of policies is that they result in cost shifting from the public to the private purse and have little to do with the quality or quantity of health services.

Financing, Government↗

Impact of the Minimum Pricing Policy and introduction of brand (generic) substitution into the Pharmaceutical Benefits Scheme in Australia.

PURPOSE: To describe the effects of introducing the Minimum Pricing Policy (MPP) and generic (brand) substitution in 1990 and 1994 respectively on the dispensing of Pharmaceutical Benefits Scheme (PBS) prescriptions both at the aggregate and individual patient level. METHODS: The relative proportion of prescriptions with a brand premium and those at benchmark was examined 4 years after introduction of the MPP and again 5 years later after generic substitution by pharmacists was permitted. To determine the impact of a price signal at the individual level, case studies involving a patient tracking methodology were conducted on two drugs (fluoxetine and ranitidine) that received a brand premium. RESULTS: From a zero base when the MPP was introduced in 1990, there were 5.4 million prescriptions (17%) dispensed for benchmark products 4 years later in 1994. At this stage generic (brand) substitution by pharmacists was then permitted and the market share of benchmark brands increased to 45% (25.2 million) by 1999. In the patient tracking studies, a significantly lower proportion of patients was still taking the premium brand of fluoxetine 3 months after the introduction of a price signal compared with patients taking paroxetine which did not have a generic competitor. This was also the case for the premium brand of ranitidine when compared to famotidine. The size of the price signal also had a marked effect on dispensing behaviour with the drug with the larger premium (fluoxetine) showing a significantly greater switch away from the premium brand to the benchmark product. CONCLUSIONS: The introduction in 1990 of the Minimum Pricing Policy without allowing generic substitution had a relatively small impact on the selection of medicines within the Pharmaceutical Benefits Scheme. However the effect of generic substitution at the pharmacist level, which was introduced in December 1994, resulted in a marked increase in the percentage of eligible PBS items dispensed at benchmark. Case studies showed a larger premium resulted in a greater shift of patients from drugs with a brand premium to the benchmark alternative.

Anti-Ulcer Agents↗

Patents, pills and politics: the Australia-United States Free Trade Agreement and the Pharmaceutical Benefits Scheme.

There is tension between the need of the pharmaceutical innovator for intellectual property protection and the need of society for equitable and affordable access to innovative drugs. The recent Australia-United States Free Trade Agreement provides a nice illustration of this interplay between patents, pills and politics. This article provides a brief history of patent law as applied to pharmaceuticals, describes how the Pharmaceutical Benefits Scheme got caught up in AUSFTA negotiations, analyses the clauses that are likely to impact upon the PBS and describes the political process that reviewed and ultimately amended the AUSFTA.

Australia↗

Problems with the interpretation of pharmacoeconomic analyses: a review of submissions to the Australian Pharmaceutical Benefits Scheme.

CONTEXT: Pharmacoeconomic analyses are being used increasingly as the basis for reimbursement of the costs of new drugs. Reports of these analyses are often published in peer-reviewed journals. However, the analyses are complex and difficult to evaluate. OBJECTIVE: To describe the nature of problems encountered in the evaluation and interpretation of pharmacoeconomic analyses used as a basis for reimbursement decisions. DATA SOURCES: All major submissions to the Department of Health and Aged Care (DHAC) by the pharmaceutical industry for funding made under the Australian Pharmaceutical Benefits Scheme. Specifically, the DHAC's database of submissions that were received between January 1994 and December 1997 were reviewed. STUDY SELECTION: Of a total of 326 submissions, 218 had serious problems of interpretation and were included in the analysis. The nature of the serious problems reviewed were classified as estimates of comparative clinical efficacy, comparator issues, modeling issues, and calculation errors. DATA EXTRACTION: All submissions in the DHAC's database were reviewed and data were extracted if both the DHAC evaluators and technical subcommittee considered problems to have a significant bearing on the decisions of the parent committee. DATA SYNTHESIS: Of a total of 326 submissions, 218 (67%) had significant problems and 31 had more than 1 problem. Of the 249 problems identified, 154 (62%) related to uncertainty in the estimates of comparative clinical efficacy, and 71 (28.5%) related to modeling issues, which included clinical assumptions or cost estimates, used in the construction of the economic models. There were 15 instances of disagreement over the choice of comparator, and serious calculation errors were found on 9 occasions. Overall, 159 problems (64%) were considered to be avoidable. CONCLUSIONS: Significant problems were identified in these pharmacoeconomic analyses. The intensive evaluation process used in the Australian Pharmaceutical Benefits Scheme allowed for identification and correction of pharmacoecomomic analysis problems, but the resources that are required may be beyond the capacity of many organizations, including peer-reviewed journals.

Australia↗

Will the Australia-United States Free Trade Agreement undermine the Pharmaceutical Benefits Scheme?

The Australia-United States Free Trade Agreement (AUSFTA) contains major concessions to the US pharmaceutical industry that may undermine the egalitarian principles and operation of the Pharmaceutical Benefits Scheme (PBS) and substantially increase the costs of medicinal drugs to Australian consumers. AUSFTA's approach to the PBS excessively emphasises the need to reward manufacturers of "innovative" new pharmaceuticals, instead of emphasising consumers' need for equitable and affordable access to necessary medicines (the first principle of our National Medicines Policy). Several features of AUSFTA may bring pressure to bear on the Pharmaceutical Benefits Advisory Committee (PBAC) to list "innovative" drugs that the committee initially rejected because the evidence for cost-effectiveness was not compelling. Intellectual property provisions of AUSFTA are likely to delay the entry of PBS cost-reducing generic products when pharmaceutical patents expire. We support the many concerned health and consumer organisations who have asked the Senate either not to pass the enabling legislation, or to delay its passage until a fairer deal in terms of public health can be obtained.

Australia↗

Access to tumour necrosis factor inhibitors for rheumatoid arthritis treatment under the Australian Pharmaceutical Benefits Scheme: are we on target?

BACKGROUND: Access to tumour necrosis factor inhibitors (TNFI) for the treatment of rheumatoid arthritis under the Australian Pharmaceutical Benefits Scheme (PBS) is governed by a set of arrangements, operational from August 2003. Patients must meet strict criteria for both starting and continuing TNFI. Examination of utilization data is important for assessing the broader implications of arrangements for access to expensive pharmaceuticals under schemes such as the PBS. AIM: To examine the uptake of TNFI over the first year of subsidized availability of etanercept under the PBS, and to compare these data to the predicted utilization and expenditure. METHODS: Collection and analysis of prescription and expenditure data for the three listed TNFI: etanercept, infliximab and adalimumab processed under the PBS for the period August 2003 to July 2004. RESULTS: A total of 8,053 prescriptions for TNFI was reimbursed at a total cost of 15.2 m Australian dollars. The total PBS expenditure on etanercept was just over 14 m Australian dollars, 14% of the predicted annual expenditure. The relative per capita uptake of etanercept was highest in the Australian Capital Territory and lowest in the Northern Territory. More than 50% of prescriptions for etanercept were for concessional patients (7.3 m Australian dollars). CONCLUSION: Prescription rates and expenditure on etanercept were substantially below those forecast over the first year. There are opportunities to adjust the PBS restrictions for subsidized access to TNFI to benefit more patients.

Adalimumab↗

Pharmaceutical Benefits Scheme criteria for the use of tumour necrosis factor-alpha inhibitors in the treatment of ankylosing spondylitis in Australia: are they evidence based?

BACKGROUND: In 2004, the Pharmaceutical Benefits Scheme (PBS) listed infliximab as a subsidised treatment for ankylosing spondylitis (AS). Eligibility to receive this treatment for AS involved fulfilling several criteria. AIM: To examine the medical literature concerning response to tumor necrosis factor (TNF)-alpha inhibitors in AS and compare with the PBS criteria for these agents. METHODS: Review of published studies and analysis of the PBS criteria for the prescription of TNF inhibitors for the treatment of AS to assess whether the published criteria are evidence based. RESULTS: The published findings on the prediction of response to TNF inhibitors in the treatment of AS suggest that age, duration of disease, disease activity, functional status at the time of commencement of TNF inhibitors and, possibly, level of acute phase reactants predict the outcome of treatment with TNF inhibitors in AS. The PBS criteria do not reflect the published findings on predictors of response to TNF inhibitors. CONCLUSION: The current PBS criteria that need to be fulfilled for patients to receive subsidised treatment with TNF inhibitors for AS are not evidence based and will lead to the selection of patients with established disease while excluding patients with early disease.

Antibodies, Monoclonal↗