Healthy Skepticism Library item: 13659

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Publication type: news

Ryan S.
Drug committee left to rely on industry funding
The Australian 2008 May 15
http://www.theaustralian.news.com.au/story/0,25197,23700655-5013871,00.html

Full text:

A LABOR policy backflip will leave an independent committee that advises the Government on multi-million-dollar drug subsidies reliant on industry funding for the first time in its 60-year history.

Last night’s budget decision to fund the committee on a cost-recovery basis drew fire from drug companies and experts fearful it could erode its impact on the independence of the Pharmaceutical Benefits Advisory Committee.

It shows the Rudd Government will push ahead with the cost-recovery arrangements it had once slammed its predecessor for pursuing, asking drug companies to contribute $7 million over forward estimates to help run the PBAC, starting on July 1.

Ken Harvey, from La Trobe University’s School of Public Health, said the savings would ultimately prove expensive, threatening the committee’s future integrity and putting upward pressure on medicine prices.

“It’s a very regrettable, short-term way of trying to find money. Industry is going to pass that (cost) on to consumers, and it basically means the sickest people using drugs are paying for it,” he said. “It’s inequitable, and it’s also potentially open to giving the industry more influence.” Drug industry critic Jon Jureidini said cost-recovery funding could put undue pressure on the committee to rush through drug industry applications, as it had in the case of the industry-funded US Food and Drug Administration.

“What are the drug companies being offered in return for the cost recovery?” he said.

But the pharmaceutical industry itself also wants none of the policy. Ian Chalmers, chief executive of peak group Medicines Australia, said he was surprised and disappointed by the fresh demand for industry funding of the PBAC, especially at a time when local drug manufacturing plants were closing due to competition overseas. “The procurement of pharmaceuticals for the PBS is a government function and it’s unreasonable for industry to be expected to pay for the business of government,” he said.

PBAC member Mark Yates last year appealed to the Howard government to reconsider the shift from public funding for the committee, in place since it was set up with the Pharmaceutical Benefits Scheme in 1948-49. Labor backed that call, with then Opposition health spokeswoman Nicola Roxon saying she had concerns about the PBAC’s independence.

A spokesman for Ms Roxon, now Health Minister, said that given budget constraints it was not possible to reverse the previous government’s decision to move ahead with cost recovery. “In tight financial circumstances, the Government made clear that tough decisions had to be made to rein in spending,” he said.