Study Says Government Not Responsible For All PBS Delays

By Adriana Rehbein
Monday, 28 January, 2013

Blaming “the Government” for delays in PBS listing processes might turn out to be a poisoned chalice for the pharmaceutical industry, according to a new study in the Australian Health Review.

Government policy changes, requiring Cabinet approval for new PBS listings, have been widely criticised by the pharmaceutical industry and other stakeholders. In relation to this policy, Medicines Australia CEO Brendan Shaw has stated “Requiring Cabinet to approve a new medicine for PBS listing usually delays the subsidy of these medicines by between six and twelve months. That’s six to twelve months of new treatments that patients are missing out on while the administrative processes of Cabinet grind on.”

However, an analysis undertaken by Alison Pearce, a PhD candidate at the University of Technology, Sydney, has found that industry tactics may be as much to blame for the delays as changes to Government policy. In fact the study found that over 50% of new medicines approved by the TGA are not even submitted for PBS listing by their sponsor companies within two years of receiving the tick from the TGA.

The study reported a decade-long trend in increased delays with research from other sources showing the average time between a positive TGA recommendation and PBS listing has increased steadily from 13.6 months in 2000 to 34.2 months in 2009. It focussed on examining the timelines of PBS applications following approval by the Therapeutic Goods Administration (TGA), to enable the recent Cabinet delays to be considered in the context of the overall medicines approval process.

Ms Pearce and her colleagues identified all applications for new medicines or for medicines to be used to treat new conditions approved in 2004 by the TGA and found that only 43% of these products were submitted for PBS listing within 2 years, with an average 17-month delay from TGA approval of a product to consideration by the Pharmaceutical Benefits Advisory Committee (PBAC), who review PBS applications.

One of the reasons identified by the study is that companies may not apply for PBS listing is the cost of a major submission, particularly for medications with relatively small markets. Given the time and resources required to prepare a PBAC submission, companies may choose not to apply for PBS listing and look for alternative ways of selling and marketing products directly to individuals, or through funding available through special access schemes, private insurance companies, hospitals or charitable organisations.

These high submission costs, the availability of alternative sources of funding, and the need to negotiate on price with the Pricing  Authority creates fewer incentives for pharmaceutical companies to apply for PBS listing, potentially leaving Australians with limited access to affordable medicines.

Overall, the study acknowledged that while Cabinet approval processes have delayed access to new treatments, there are other delays earlier in the approval process that also have a significant impact on the overall timeliness of listing. On the basis of these findings, both the Government and the pharmaceutical industry need to change their current practices to ensure Australians have timely access to medicines on the PBS.

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