Walking the PBS tightrope: Outdated reimbursement system denies Australians and jeopardises nation’s progress

Pharma News: The glaring shortcomings of Australia’s healthcare system have been laid bare, igniting a fierce debate over the urgent need for reform. The report, commissioned by Medicines Australia, emphasises that Australia is squandering a ‘once-in-a-generation’ opportunity to revamp the outdated 75-year-old Pharmaceutical Benefits Scheme (PBS) and bring it in line with modern standards. The repercussions are dire: Australians are being denied timely access to cutting-edge treatments, while other countries surge ahead in access to medical advancements.

Liz de Somer, CEO of Medicines Australia, pulled no punches as she unveiled the report’s findings, saying “The data reinforces that Australia is failing to provide timely and fair access to many advanced medical options from an antiquated system that is not powered to respond quickly to innovation. We rank well behind comparable OECD nations in getting approved new medicines out to people, which means not only that patients are not getting the best outcomes, but that significant social and economic benefits are lost. The Health Technology Assessment (HTA) Review now underway must result in an adaptable model equipped to deal with the pace of change.”

The comprehensive report presents an unvarnished truth: Australia stands at a crossroads, where the health needs of its population can only be met through a bold departure from the rigid and outdated methods that have crippled the HTA system and PBS.

“Recent comments by the Minister for Health and the Shadow Minister for Health show there is heightened political will to modernise the Australian healthcare delivery system, and the HTA Review provides critical impetus to initiate bold reform to serve current and future generations of Australians,” said Ms de Somer.

Are HTA organisations ignoring crucial value elements?

Trent Zimmerman, former federal member for North Sydney and chair of the House of Representatives health committee between 2016 and 2022, said in an opinion piece “The current PBS…was not designed to assess subsidies for treatments that might be personalised for each individual, which is the hope precision medicine can offer. These are treatments that can cost in the many tens of thousands and will be beyond the reach of most Australians without government subsidies.

“New medicines and technologies rarely come cheap but upfront costs often bring long-term savings, particularly for chronic conditions that could otherwise involve years of health expenditure. More fundamentally, they save lives or shape the quality of life for so many Australians – and that’s surely worth the investment.”

With an unflinching gaze, the report exposes the alarming disparities in Australia’s medicines access when compared to other progressive OECD nations. These countries have embraced flexible and contemporary approaches to assessing value and funding new medicines, leaving Australia to wallow in a state of regression. The report highlights several historical barriers responsible for this disheartening reality.

Astonishingly, a meagre 44% of new molecular entities (NMEs) registered in Australia between 2016 and 2021 were granted reimbursement. In sharp contrast, Japan, Germany, the UK, and France boasted reimbursement rates of 96%, 84%, 80%, and 62%, respectively.

Australia lags behind other nations, taking a mind-numbing three to four times longer to reimburse a new medicine. The UK, Canada, France, and Germany all outshine Australia by a wide margin. In fact, Australia ranks a dismal 12th, with a sluggish average reimbursement time of 413 days for an NME post-registration – 303 days longer than Japan, 275 days longer than Germany and 215 days longer than the UK.

The Pharmaceutical Benefits Advisory Committee (PBAC) has earned Australia a dubious distinction as one of the most resistant countries when it comes to approving listings for new medicines. Their reluctance to embrace medical breakthroughs denies patients affordable access to a full range of treatments.

Clinicians are advocating for the adoption of international models in Australia’s HTA processes, particularly the successful German model. This model allows for immediate reimbursement of pharmaceuticals upon regulatory approval, with simultaneous HTA and pricing negotiations. Such an approach enables patients to access necessary treatments promptly while economic considerations are being assessed. The AMA believes that a similar approach may be suitable for certain pharmaceuticals in Australia.

While PBS expenditure has been stabilised through structural and pricing measures since the late 1990s, investment in the scheme has dwindled as a percentage of total Australian Government healthcare expenditure. Shockingly, projections indicate further shrinkage over the next decade, despite escalating spending elsewhere in the system.

The report‘s findings are alarming, indicating a grim future where breakthrough therapies, precision medicines, and the chronic health needs of an aging population are largely ignored. To achieve the government’s ambitious transformation of the 39-year-old Medicare system, a simultaneous strengthening of the PBS becomes imperative. In fact, the PBS funding is flat at $19.1 billion in 2023-24 when compared to $19.6 billion in 2022-23. These flat projections raise significant questions on how the PBS can keep up with the innovative leaps and scientific breakthroughs.

“We have a rare opportunity to be visionary here and we urge all stakeholders to make submissions throughout the HTA Review consultation process to safeguard access to medical advances for future generations,” Ms de Somer emphasised.

Within the HTA system, historical discrepancies loom large. Variances in how medicines are valued and costs assessed, such as the inconsistent assignment of quality-adjusted life year (QALY) values across government departments and the exclusion of broader community and economic benefits, are central problems that demand immediate attention.

Medicines and vaccines, far from being mere expenses, represent a vital investment in the wellbeing of Australians. A prime example is the positive impact of COVID-19 vaccines on the Australian economy, estimated at a staggering $181.2 billion.

“Our report underscores the potential underinvestment in the PBS and the National Immunisation Program over the past two decades, while other areas of health spending have flourished,” explained Katrina Lapham, Director, Strategic Market Access and Policy, Biointelect.

The HTA review presents a rare opportunity to redefine Australia’s healthcare landscape, leaving behind a system inherited from a bygone era and embracing a dynamic, world-class model designed to meet the evolving health needs of its people.

As the nation stands at the precipice of transformation, the question remains: Will Australia seize this ‘once-in-a-generation’ opportunity and redefine its healthcare legacy, or will it be left behind as the world forges ahead into a future of medical innovations?

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