Country Report: Australia - Pharmaceutical Executive


Country Report: Australia
Where Value Beats Cost

Pharmaceutical Executive


Albert Spanos, General Manager, Celgene Australia
In the case of Australia, the reforms of this reimbursement system, the Pharmaceutical Benefits Scheme (PBS), have been about control of the supply chain to combine a rise in generics share with a drop in its prices in order to create headspace for reimbursement of new innovative medicines. Whether the PBS reforms are reaching their goals is up for serious debate. Many industry players are asking whether the government can afford to use the efficiencies that it has gained from generics to increase spending on new products.

Preventing Beats Curing
One of the industry representatives that questions the reforms is Robert Hendriks, managing director of Genzyme. "Statistics of PBS approvals of innovative medicines show that a decreasing percentage of submissions are approved. The central question today is: should the focus be on cost containment to the extent we see today, or should the focus shift more towards assessing real health outcomes?"

Genzyme encounters a specific reimbursement challenge with its rare disease portfolio, for which it has to apply to obtain reimbursement on the life-saving drug program. The life-saving drug program gives a set of criteria, one of which is showing substantial life-saving benefit. This is extremely difficult for products that treat rare diseases: "we treat few patients, which makes it difficult to set up clinical trials, certainly when they are life-saving," said Hendriks. "Is it ethical to have a double blind randomized placebo-controlled trial? You might consider that at the beginning of the development of your drug, but if you are further down the path and clinicians are convinced that your drug works, how are you going to set up a trial that would allow patients to shorten their life-span?"


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