Australia makes concessions on drug approvals after US pressureBMJ 2004; 328 doi: https://doi.org/10.1136/bmj.328.7437.425-b (Published 19 February 2004) Cite this as: BMJ 2004;328:425
Australia has bowed to pressure from the US government and agreed to major changes to its system of regulating drugs in a free trade agreement.
Public health advocates believe that the changes—advocated by the US drug industry—threaten thefoundations of Australia's pharmaceutical benefits scheme. Under the scheme, drugs can be approvedonly if recommended by the independent Pharmaceutical Benefits Advisory Committee, with their price benchmarked against generic drugs that deliver comparable health benefits (31 January p 247).
Although the text of the agreement is not yet available, a US government briefing document states that the scheme will be amended by “including establishment of an independent process to reviewdeterminations of product listings.”
Australia's drug industry group, Medicines Australia, has welcomed the agreement. “There are going to be changes to PBAC [the Pharmaceutical Benefits Advisory Committee], and I think they willbe genuine changes to increase transparency, which is not only about what the decisions are but how they are made,” said the group's spokesman Steve Haynes.
The representative of the minister for health in the Australian Senate, Senator Ian Campbell, insisted that the review process will “not have the power to override the authority of the PBAC” and will be “worked out in close consultation with stakeholders.”
David Henry, professor of clinical pharmacology at Newcastle University and a former member of the advisory committee, is sceptical of government assurances. “For the last eight years the pharmaceutical industry has been asking for an appeals process that overturns PBAC decisions … As companies can simply reapply for drugs that have been rejected, how would an appeals process help the industry if it wasn't overturning the decisions of the PBAC?” he asked.
Martyn Goddard, senior policy officer with the Australian Consumers' Association, believes that Australia has also agreed to inform a patent holder when a generic manufacturer submits a licensing application relating to a drug about to come off-patent. “In the US it has allowed the major companies to tie competitors up in knots in the courts over 50 or 100 patents, all expiring at a different times, around each drug,” he said.
Professor Henry argues that this would increase the cost to government of the pharmaceutical benefits scheme. “Under reference pricing … once the generic drug comes on to the market the price of all drugs in that class, not just the originator brand, have to come down to the generic price. So if you delay the entry of generics, you delay that price mediation effect across the whole class of drugs, and that seems to be what they have got.”
Australia, to the alarm of consumer groups, has also agreed to “establish a Medicines Working Group that will provide for continued dialogue between the United States and Australia on emerging health care policy issues.”