Australia’s National Medicines
Policy
Libby Roughead
University of South Australia
Health expenditure as a
proportion of GDP
16
14
12
10
% 8
6
4
2
0
Australia
USA
Per capita health expenditure
2001
7,000
6,000
5,000
4,000
$Aus
3,000
2,000
1,000
0
Australia
USA
Healthy life expectancy at birth:
2002
75
73
71
69
67
65
Australia
USA
Pharmaceutical expenditure as a
proportion of health expenditure
14
12
10
8
%
6
4
2
0
Australia
USA
Costs of providing medicines are
increasing
7
6
$ billion
5
4
3
2
1
0
82/83
91-92
94/95
98/99
00/01
02/03
Medicines are consuming a larger
part of the health budget
1984-85
Pharmaceu
ticals
9%
Other
health
expenditur
e
91%
2002/03
Pharmaceuti
cals
15%
Other health
expenditure
85%
Australia’s National Medicines Policy
• Endorsed by
parliament in 2000
Goal:
• To meet medication
and related service
needs, so that both
optimal health
outcomes and
economic objectives
are achieved
http://www.health.gov.au/haf/nmp/objectives/policy.htm
Equitable access
to necessary
medicines
Quality use of
medicines
Medicines of
high quality safety
and efficacy
A viable &
responsible local
pharmaceutical
industry
Medicines meeting appropriate standards of
quality, safety and efficacy
• Achieved via the Therapeutic Goods Administration
(est 1958)
• Approves for marketing
– Prescription medicines
– Over-the-counter medicines
– Complementary therapies
• Current policy development,
harmonisation of regulatory arrangements with
New Zealand
Maintaining a responsible and viable
pharmaceutical industry
• Australia has had an industry development
program since 1988
• In 2004, Pharmaceuticals Partnerships Program
(P3) was launched
• Provides $150 million over the five years to support
R&D in Australia
• Pharmaceuticals are Australia’s third largest
manufactured export after automobiles and wine
Timely access to the medicines that
Australians need, at a cost the individual
and the community can afford
• Australia’s Pharmaceutical Benefits Scheme
– Universal access to necessary medicines
– Initiated in 1950, with 139 life saving and
disease preventing medications available free
– Today, 593 drugs (1451 forms, 2558 products)
– Restrictions apply to 778 of the items, 288 of
which require prior authorisation
Pharmaceutical Benefits Scheme
• Accounts for over 90% of all community medicine
use in Australia
• Consumers pay a proportion of total costs
– $4.60 for concession card holders
– $28.60 for general beneficiaries
– Safety net system
• Maximum concession card holders annual costs
$239.20, then supplied free.
• Maximum costs of $874.90 per annum for general
beneficiaries
Assessment of medicines for subsidy
• Pharmaceutical Benefits Advisory Committee
(PBAC)
– Statutory committee established under the
National Health Act
– Health minister cannot list a medicine under the
scheme without a positive recommendation
from the PBAC
Assessment of medicines for subsidy
In assessing medicines for listing, the committee is
required by legislation to consider:
• Comparative efficacy
• Comparative safety
• Cost-effectiveness
– Cost-minimisation assessment or costeffectiveness assessment
• Cost-effectiveness has been mandatory since 1993
USA-Australian Free Trade
Agreement
Current policy developments due to the agreement
• An independent review process of PBAC decisions
– where the PBAC decided not to list a medicine
– PBAC is still the final arbiter of the decision
• Hearings before the PBAC; limited in scope & to
specific issues
• Improved transparency of PBAC decisions with
publication of public summary documents;
previously all material was commercial in
confidence
Quality Use of Medicines
• National Strategy for
Quality Use of
Medicines
• Established 1992
• In response to strong
consumer lobby
http://www.health.gov.au/haf/nmp/quality.htm
The Original Vision for QUM (1992)
National Facilitation &
Co-ordination
Objective
Information
Education
& Training
Australian
National
Formulary
Consumer education
for self-reliance
School kits &
adult learning
National
Therapeutic
Guidelines
Core curricula
for providers
Australian
Prescriber
Undergraduate,
postgraduate &
continuing ed’n
Consumer
Medicines
Information
Ethical promotion
Multidisciplinary
team approach
Consumer
Services
Provider
Services
Awareness
Motivation
Confidence
Stimulate
teamwork
General
awareness
Academic
detailing
Elderly
Medication
records
Medication
review
Campaigns
Models of
practice
Asthma
Analgesics
Compliance aids
Audit &
feedback
Disposal of
unwanted
medicines
Critical
appraisal of
promotion
Targeted Grants for Further Development
Out-of-date
medication
The Original Vision for QUM (1992)
National Facilitation &
Co-ordination
Objective
Information
Australian
National
Formulary
National
Therapeutic
Guidelines
Australian
Prescriber
Consumer
Medicines
Information
Ethical
promotion
Education
& Training
Consumer education
for self-reliance
School kits &
adult learning
Core curricula
for providers
Undergraduate,
postgraduate &
continuing ed’n
Multidisciplinary
team approach
Consumer
Services
Provider
Services
Awareness
Motivation
Confidence
Stimulate
teamwork
General
awareness
Academic
detailing
Elderly
Medication
records
Medication
review
Campaigns
Models of
practice
Asthma
Analgesics
Compliance aids
Audit &
feedback
Disposal of
unwanted
medicines
Critical
appraisal of
promotion
Targeted Grants for Further Development
Out-of-date
medication
QUM services and resources (2005)
National Facilitation &
Co-ordination
Objective
Information
Education
& Training
Australian
National
Formulary
Consumer
education for selfreliance
National
Therapeutic
Guidelines
School kits &
adult learning
Australian
Prescriber
Consumer
Medicines
Information
Ethical
promotion
Core curricula
for providers
Undergraduate,
postgraduate &
continuing ed’n
Multidisciplinary
team approach
Consumer
Services
Awareness
Motivation
Confidence
E-medication
record developing
Medication
review
Provider
Services
Campaigns
Stimulate
teamwork
General
awareness
Academic
detailing
Elderly
Models of
practice
Antibiotics
Analgesics
Compliance aids
Audit &
feedback
Disposal of
unwanted
medicines
Critical
appraisal of
promotion
Targeted Grants for Further Development
Out-of-date
medication
Ensuring quality use of medicines
• Over $100 million committed over next four years
The challenge
• Is the policy framework holding the
tensions?
Cost-effectiveness assessments
and impact on pricing
• Costs of selected new medicines: Australia
and USA
• Etanercept
– Aus PBS price 4x25mg = $US 734;
– US FSS price $US 360 DrugStore.com $US600
• Imatinib 400mg 30
– Aus PBS price $US 2934;
– US FSS price $US 2413 DrugStore.com $US2440
Cost-effectiveness assessments and
impact on pricing
Cost-effectiveness assessments and impact
on uptake of new molecular entities
Conclusions
• Australia’s national medicines policy aims to hold
the tensions between the major objectives of the
policy at the macro and micro levels
– Macro level tensions, such as industry
development versus access and affordability
– Tensions also need to be acknowledged and
held at the local level
• eg hospital needs versus community needs
pharmacy needs versus medicines needs
consumer needs versus health professional needs
Conclusions
• Lack of comprehensive
linked data sets in Australia
limit conclusions, about
how well the Australian
framework balances the
competing tensions.
• However, currently the
policy appears to be
meeting its major
objectives as measured by
the national indicators.
The real test will be if the
policy framework achieves
these objectives in 2020