Healthy Skepticism Library item: 245

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Publication type: news

Caldwell , A .
US free trade deal concerns roll in
ABC Online 2004 Mar 4

Full text:

MARK COLVIN: What do the details reveal about what the free trade agreement will do to Australia’s subsidised medicine scheme, the PBS?

Last month, one free trade sceptic warned of the danger of increased prices for medicines and a delay in access to new drugs.

Professor David Henry was a member of the Pharmaceutical Benefits Advisory Committee, the PBAC, from 1992 until 2001.

Speaking to Alison Caldwell, Professor Henry does now concede that the final pricing decision will remain with that committee, but he’s still concerned about the pressure that drug companies will apply in the process.

DAVID HENRY: I am only somewhat reassured by what I see and that reassurance comes not from the text that I’m reading, the reassurance comes from talking to people who’ve been involved in these negotiations, who I think have worked very hard and done a very good job.

ALISON CALDWELL: What do we know by way of detail now about the independent review process of product listings? Last month you said you thought that the independent review would take the final say away from the Pharmaceutical Benefits Advisory Committee. Do you still say that?

DAVID HENRY: The Minister said quite correctly that a review process under the existing law will only take that application back to the Pharmaceutical Benefits Advisory Committee. In other words, it cannot override the decision of the Pharmaceutical Benefits Advisory Committee.

ALISON CALDWELL: So the PBAC will always have the final say. That’s good news isn’t it?

DAVID HENRY: As stated, that is definitely much better than the alternative, which is that it would have a final say, that it could overturn it. But I want to consider briefly what that means for the committee in having an independent review even if it doesn’t have the final say. I think you have to consider how that’s going to be used by the pharmaceutical industry.

ALISON CALDWELL: How could it be used?

DAVID HENRY: If a drug is rejected by the PBAC and therefore it can’t go to the Minister for listing, the industry can take it to an independent body that then may come up with a different judgement. The industry can then take that independent view and then it can muster support from a number of different groups – patient support groups, doctors, the media, politicians – and what it can do is use that view to apply pressure to the committee. So the decision still has to be made by the committee but they come under increasing pressure, and the industry, the companies use that independent opinion to apply pressure to the PBAC.

ALISON CALDWELL: How do you think the PBAC as you know it would cope with that sort of pressure?

DAVID HENRY: They’re great people and they’re used to working with pressure.

But there’s a limit and I know from the time that I spent on it, which is some time ago, that when pressure’s applied from different directions – to the Minister, through politicians, through the media – it becomes very hard to hold the line on a decision that you knew was right. We’re only human beings and therefore I fear that the committee will feel themselves under great pressure because of all of this pushing towards them approving drugs, not rejecting them.

ALISON CALDWELL: Will this mean delayed access to drugs possibly?

DAVID HENRY: I don’t know that it will delay access to drugs. I think what I will do is grants companies some relief from something they’ve sought for a long time, and that is higher prices for drugs in Australia that don’t work much better than the drugs we already have.

ALISON CALDWELL: Last month the Federal Health Minister Tony Abbott guaranteed that the price of drugs under the PBS wouldn’t increase under this new agreement. Is there anything in the fine detail to suggest otherwise?

DAVID HENRY: Well you cannot guarantee that because if this review panel draws different conclusions from PBAC and that’s used to apply pressure to PBAC then it’s going to be harder to tow the line. The text also includes opportunity for companies to apply for an adjustment to the reimbursement amount. I presume that means the reimbursed price of the drugs. There are other opportunities for companies and all of it pushes towards higher prices, not lower prices.

MARK COLVIN: Professor David Henry who was on the Pharmaceutical Benefits Advisory Committee until 2001, with Alison Caldwell.