The federal health minister, Mark Butler, said the government is trying to understand the “dynamic changes taking place in the global drug market” after a new deal that will see Britain pay 25% more for new US drugs comes as drug policy experts warn the deal sets a “problematic precedent”.
Under the agreement, the UK will double the percentage of GDP allocated to purchasing innovative treatments from the US. The deal has led UK experts to express concerns that the National Health Service will pay more money for new treatments, leaving less money to pay for health workers and proven existing treatments.
The US says it hopes other countries will follow suit.
Asked whether the Australian government would be willing to pay more if faced with comparable demands from the US, Butler said the Pharmaceutical Benefits Scheme (PBS) had “delivered extraordinary things for Australians for more than 80 years” allowing “access to the world’s best medicines at affordable PBS prices”.
He said, “The first assurance I want to give to the Australian people is that we will never compromise those two important elements of PBS.”
“We are engaging closely not only with the US administration, particularly through the Embassy in Washington, but also with global pharmaceutical companies who will be affected by this.”
He said he wouldn’t say in advance what the outcome of those discussions might be.
“Obviously, we’re trying to make sure we understand this dynamic that’s happening in the global pharmaceutical market,” he told reporters Tuesday. “We are one of 193 other countries that are in talks with the Americans about this.”
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A spokesperson for Medicines Australia, which represents the pharmaceutical industry, said the deal reinforces the “critical and urgent need” for the government to implement reforms to the Health Technology Assessment (HTA), which informs decisions about what health technologies can be sold in Australia and reviews medicines made available on the PBS.
The HTA review, due in 2024, made 50 recommendations for reforms, including the need to improve and accelerate patient access to new medicines.
Asked whether pharmaceutical companies planned to use the US/UK deal to pressure the independent Pharmaceutical Benefits Advisory Committee to approve more high-cost drugs that do not currently meet Australian value-for-money standards, the spokesperson said: “Our focus is to work with the Government to implement the reforms recommended in our health technology assessment … to ensure Australian patients continue to have access to new and innovative medicines”.
However, health policy experts told Guardian Australia the agreement signals a move away from value-for-money assessment for medicines.
Professor Libby Roughead, director of the Center for Quality Use of Medicines and Pharmacy Research at the University of South Australia, said agreeing to pay 25% more for medicines was “not really loosening the bounds of cost-effectiveness… it’s really throwing it out”.
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Roughead said it was too early to know how changes in Britain might affect Australia, but said global consequences were “inevitable”. While Australia had a “good, solid system” and cautioned against panic, he said the key question would be whether PBS would continue to assess “when is the new good? When is the new better? And when is the new not so good?”
Each country needs a rigorous and independent way to assess this, he said.
Dr. Barbara Mintzes, professor of evidence-based pharmaceutical policy at the University of Sydney, said the UK/US agreement should be seen “…as a concern internationally for all countries with public coverage of medicines”.
“This sets a very problematic precedent in terms of the impact of trade policy on domestic public health services,” he said.
“The UK NHS has already been suffering from severe shortages for years and this deal is unlikely to improve the situation… quite the contrary.
“This would be of concern in the sense that if the US successfully negotiated this type of deal in one country, it could put pressure on other countries to do similar deals. The expectation is that Australia will not agree to any deal with the US that uses tariffs as a tool to drive up drug prices.”
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