Pharma positions productivity as lever in HTA reform push as MFN pressure mounts

The pharmaceutical industry is moving to shape the political and policy narrative ahead of high-stakes negotiations with the Federal Government, as Medicines Australia prepares to engage Health Minister Mark Butler ahead of the 1 July commencement of Strategic Agreement discussions.

At the centre of the confidential negotiations will be the implementation of the Health Technology Assessment (HTA) Review reforms which is likely to place the financial burden for reform implementation largely on the pharma sector.

A new report spearheaded by the Medicines Australia Oncology Industry Taskforce, seeks to position the case for reform by highlighting the productivity consequences of delayed access to innovative cancer therapies. The report builds on the 2024 Productivity Commission (PC) findings that innovative cancer treatments are a major contributor to Australia’s productivity growth where “the biggest contribution to productivity growth has come from saving lives”.

Liz de Somer, CEO of Medicines Australia said, “This challenge is becoming increasingly important as around 40 per cent of Australians diagnosed with cancer are of working age. Almost half leave the labour force following diagnosis, contributing to an estimated $1.7 billion in lost productivity each year.”

Australians currently wait an average of 3.6 years for funded Pharmaceutical Benefits Scheme (PBS) access to medicines available overseas, with only one in four new medicines available in OECD countries being funded in Australia.

“But when access is delayed, the consequences extend well beyond health outcomes. Productivity is lost, workforce participation declines and families are placed under significant and often sustained financial pressure,” de Somer added.

The report summarises qualitative findings from heart-wrenching conversations with patients, carers and medical oncologists, illustrating how delayed access to new medicines and financial toxicity affects patients, families, healthcare services, workforce participation and the broader Australian economy.

A patient who received compassionate access to a targeted therapy not listed on the PBS said, “Without the treatment I wouldn’t be here because my disease spread in 2015 and without access to this treatment, it would have continued to progress. So, in its simplest forms, access has kept me alive.”

A medical oncologist described the stakes in blunt terms, saying, “In cancer care we are dealing with lifesaving treatments, and the patients can’t wait. So what happens, they miss out, some patients will die […] if they can’t afford it, if they can’t pay and they are not on a clinical trial and there are no other options then the patient doesn’t receive the treatment. So, that’s pretty binary and these are time critical.”

The industry argues that HTA reforms cannot be separated from the question of how Australia values medical innovation. As part of the reforms, pricing policy must ensure breakthrough medicines are appropriately recognised, including their broader social and economic impact. One proposed approach is requiring the Pharmaceutical Benefits Advisory Committee (PBAC) to consider productivity benefits when evaluating cost-effectiveness, patient cohorts and pricing decisions.

The international pressures is complicating the policy environment. The US Administration’s Most Favoured Nation (MFN) pricing policy is adding pressure on the Labor government, which has sought to maintain the status quo around the PBS. The tension has now intensified after the U.S. launched an investigation into Germany’s pharmaceutical policies over what it described as “persistent underpayment” for medicines, as Germany seeks to cut healthcare costs, including pharmaceutical spending.

The U.S. pharmaceutical industry peak body, the Pharmaceutical Research and Manufacturers of America (PhRMA), welcomed the investigation.

“For too long, foreign governments have undervalued innovative medicines, forcing U.S. patients and taxpayers to shoulder a disproportionate share of the costs of global innovation,” said PhRMA’s CEO, Stephen Ubl. “Initial progress has been made with the U.S.-UK pharmaceutical pricing agreement, but Germany, Japan, France, Canada and other high-income countries must take action to pay their fair share.”

Locally, delayed access continues to create financial toxicity for families forced to fund treatments privately.

The report details the experience of a mother of two young children who has been advocating for access to treatment for her husband. While the therapy has demonstrated efficacy for his cancer type and received Therapeutic Goods Administration (TGA) approval more than a year ago, it has not yet received PBS funding. The family has been left with self-funding treatment at a cost of almost $30,000 per month.

“We scrape together [the amount we need], which is a lot for a young family, to get one month…Then what happens when that 30 days is up? Are we going to go around to all of our friends again who have young families and say, you know, can we have some more money?” the patient asked.

The impact of delayed access extends far beyond the patient receiving treatment. Cancer diagnoses frequently force people to take extended leave, reduce working hours or exit the workforce entirely, creating ripple effects across families and communities.

“My husband had used up sick leave, annual leave, long service leave. My siblings had used up their sick leave, my parents had used up their sick leave with attempts to manage caring responsibilities. My mum stepped down to part-time work and then left her career so she was more flexible and able to then support me,” explained a patient who was interviewed for the report.

In contrast, participants described how timely access to effective treatments can fundamentally change the trajectory of their life, improving not only survival outcomes but also mental health and wellbeing.

“With hope in science and research and access, it has decreased my anxiety, improved my broader sense of optimism and hope for the future. Just makes the days a lot more manageable and allows me to see the horizon, as opposed to being trapped in the fear of not being able to make it to my next birthday,” reflected a patient.

As the pharma sector braces for a confidential round of politically charged negotiations, the very patients and clinicians who spent four years shaping the HTA Review reforms face being sidelined from the Strategic Agreement between Medicines Australia and the Labor government.

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