News

# Lilly's challenge to Australia's drug rationing scheme fails

BMJ 2007; 334 (Published 15 March 2007) Cite this as: BMJ 2007;334:552
1. Bob Burton
1. Canberra

Eli Lilly Australia has failed to overturn the repeated rejection of its osteoporosis drug teriparatide (Forteo) from being included in the government's drug subsidy scheme. An independent review, requested by the company, dismissed the clinical data in Lilly's submissions as inadequate.

The review was seen as a test case on whether a change, introduced at the insistence of the drug industry through the Australia-US free trade agreement, would make it easier to overturn decisions made by the Pharmaceutical Benefits Advisory Committee. That committee decides which drugs are included in Australia's pharmaceutical benefits scheme, under which patients receive them at a subsidised rate (BMJ 2006;333:1239, doi: 10.1136/bmj.39062.420995.DB and 2003;326:680, doi: 10.1136/bmj.326.7391.680/c).

If Lilly's drug teriparatide had been approved under the scheme, patients would have paid a maximum of $A30.70 per prescription, with the government paying the remainder of the cost. A year's supply of the drug costs about$A10 000 (£4000; €5900; \$7800).

In June 2003 and March 2004 the committee rejected the company's applications for the approval of teriparatide as a second line treatment after the failure of antiresorptive therapy. In July 2005 Lilly's request that the drug be approved for treating severe forms of vertebral fractures was also rejected, as was Lilly's later request that it be approved for treating severe fractures after the failure of six months of antiresorptive therapy.

Lilly claimed that on three key points the committee's assessment was unjustified. However, the independent review, which was finalised in December but just publicly released, disagreed with the company on all three points.

In particular, the review pointed out that the lack of a head to head randomised controlled study resulted in a lack of data to support Lilly's claim that the drug was superior to a comparator. The reviewer found that while the committee should provide the company with more precise guidelines for measuring health outcomes, adopting these would not overcome the limits of the clinical data.

The reviewer concluded: “There is insufficient rigor in the clinical trial data analysis to recommend acceptance of the material presented in the submissions.” On the basis of the review, the committee once more rejected the company's application.

In a statement, the company accepted the review process and that its “data is limited” but said that such reviews “will not always” be appropriate for assessing the merits of drugs.

Thomas Faunce, lecturer at the Australian National University law faculty, who is researching trade agreements, welcomed the outcome of the review.

“On all three counts, the review vindicated the PBAC's [Pharmaceutical Benefits Advisory Committee's] decisions and upheld their criticisms of the company's clinical data. The transparency provisions introduced under the trade agreement, which require making the reasons for rejecting or approving a drug public, at least allow us to see what is going on,” he said. But, he cautioned, “The scheme is still vulnerable to the government undermining reference pricing.”

View Abstract