Five years of HTA reform talk, now comes the $47 billion question

Medicines Australia has put a $47 billion price tag on what it says Australia must invest to improve equitable access to innovative medicines in the next decade.

The latest report follows two earlier reports from Medicines Australia, Bitter Pill and Access Denied, which documented prolonged delays in access to novel medicines and the consequences for Australian patients.

But after three reports, the obvious question is whether Canberra is listening.

Asked how the first two reports had resonated with government, Medicines Australia CEO Liz de Somer said, “We know that the government has certainly read them with interest. But I don’t think there’s anything in those reports that they didn’t already know and that we haven’t already articulated.”

The new report shifts from diagnosing the problem to demanding policy solutions.

The most significant element of the report is the call for an additional $47 billion in investment over 10 years in F1 medicines from 2027-28 to 2036-37. But de Somer was careful to distinguish that figure from the investment required for implementing the full recommendations of the Health Technology Assessment (HTA) review.

Where would $47 billion come from in the current fiscal environment?

“That’s a matter for government,” de Somer insisted. She argued that governments make strategic decisions about where investment should be directed and that funding innovative medicines will strengthen both Australia’s health system and the broader economy in terms of productivity.

The government’s challenge is now to determine whether it accepts that argument and, if it does, how it intends to pay for it.

The formal negotiations on the next strategic agreement between Medicines Australia and government, which will incorporate implementation of the HTA Review recommendations, have not yet begun.

“We’re still in a stage where we are discussing the terms of engagement,” she said. “So we have not yet started negotiations.”

But she returned to the central frustration, saying “We’re disappointed that we’re five years into this journey and that we haven’t seen tangible reforms being implemented.”

The restructuring of the Department of Health and the arrival of senior officials including Daniel McCabe, First Assistant Secretary of the Technology Assessment and Access Division, has also raised questions about institutional knowledge going into the negotiations. Previous strategic agreements were handled by Penny Shakespeare and her team.

Asked whether it was a concern that key officials involved in the negotiation process will not have a background in pharmaceuticals or previous strategic agreements, de Somer struck a diplomatic tone.

“Medicines Australia is looking for strong, good faith, respectful discussions,” she said, expressing confidence that the negotiations would be conducted in that spirit.

There is also a question of political pressure. Is the weakness of the federal Opposition diminishing the urgency facing Health Minister Mark Butler?

De Somer stopped short of blaming the Opposition. She pointed instead to the scale and complexity of Minister Butler’s portfolio and the government’s decision to incorporate the HTA review implementation into strategic agreement negotiations. When asked whether One Nation’s rising support could become part of the pressure campaign, de Somer signalled that Medicines Australia is prepared to look beyond the traditional Labor–Coalition contest and engage with a broader political constituency.

The industry body is also watching how other countries are responding to pressure surrounding the US administration’s most favoured nation (MFN) pricing policies.

“We haven’t seen a formal government response to MFN,” de Somer said. “Australia undervalues innovation. As a consequence, companies are not bringing their innovative medicines to Australian patients. So we do think there has been a lag in the response.”

There are a string of international developments as evidence that other countries are responding more aggressively to pressure surrounding the MFN pricing policies. The UK has emerged as a major benchmark, with its move towards doubling investment in innovative medicines. De Somer also cited developments in Italy, Japan, Germany, Denmark, Sweden, Norway and South Korea.

The peak industry body has laid bare what needs to change. And it has now put a $47 billion figure on the scale of additional investment required to increase timely and equitable access to innovative medicines.

After five years of reviews and reform discussions, the question for Canberra is whether the messaging is resonating with the broader voters and whether government is finally prepared to act in response to the pressure.

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