Almost nine out of 10 pharma firms have considered withdrawing or deciding not to apply reimbursement in Australia over the past two years amid red tape and concerns that the reimbursement price will be not be cost-effective, according to local media, quoting a survey by PricewaterhouseCoopers (PwC).
IHS Life Sciences perspective | |
Significance | Almost nine out of 10 (87% compared with 52% in 2012) pharma firms have considered withdrawing or deciding not to apply reimbursement in Australia over the past two years, due to concerns that the resulting reimbursement price will be not be cost-effective, according to local media, quoting a survey of 23 companies by PricewaterhouseCoopers (PwC). |
Implications | In addition, 82% of companies surveyed – a third of total respondents employed 500 or more people and had annual turnover of USD500 million – also do not plan to apply for reimbursement in Australia for some treatments in the next two years. |
Outlook | Better communication between Australian regulators and the drug industry is key in improving pharma market access conditions, with only 42% of respondents saying they had canvassed ideas with government bodies. However, it remains to be seen how the recent government reshuffle will affect ongoing pharma-related and healthcare policies. |
Almost nine out of 10 (87%) pharmaceutical companies admitted that they have considered withdrawing or not applying for reimbursement in Australia over the past two years, amid concerns that the reimbursement PBS price will be not be cost-effective, according to local media, quoting a survey of 23 companies by PricewaterhouseCoopers (PwC) cited in 'Challenges and Change — a report on the Australian Pharmaceutical Industry'. This compares with 52% of products being withdrawn, or not applied for, in 2012. In addition, 82% of respondents also do not plan to apply for reimbursement in Australia for some treatments in the next two years.
Around one-third of all respondents – some of whom complained that Australia's regulatory system was the "worst in the world" – had 500 or more employees and annual turnover of USD500 million.
The increase was attributed mainly to concern over the increased regulatory burden in Australia, which made market access more problematic. This was especially the case with the Therapeutic Goods Administration (TGA) – which grants market approval to pharmaceuticals – with 65% of respondents arguing that the TGA registration process had not improved, or had even worsened, in the past two years.
The red tape involved in the TGA application process was due to a lack of collaboration with overseas regulators, and a shortage of resources leading to slowing approvals. One example of this included a requirement for Australian-specific clinical data, even for treatments that have already received approval in the United States or Europe. This in turn prevented patients in Australia from accessing drugs already available in major overseas markets.
In addition, the surveyed pharmaceutical companies pointed out the perceived difficulty in receiving coverage under the Pharmaceutical Benefits Scheme (PBS): around half of treatments currently do not receive PBS reimbursement approval on their first application, compared with 89% in 2010, according to the Herald Sun. In particular, respondents underlined a perceived lack of transparency on risk-sharing, unreasonable clinical evidence requirements, and a "skewed" focus on setting the lowest price, as well as an overemphasis on drug pricing at the expense of wider health benefits, including lower hospitalisation rates and higher productivity.
Outlook and implications
The survey results further underline existing concerns over pharmaceutical market access conditions in Australia, and their consequences for patient access to innovative treatment in the future. For years, patient groups have protested that Australians wait significantly longer for new treatments to receive delayed PBS coverage than patients in other developed countries. For example, cancer associations have long argued for a shake-up of Australia's drug approvals system, saying patients waited on average two years longer than those in developed countries to gain access to subsidised treatment which would otherwise be unaffordable (see Australia: 26 August 2014: Cancer groups voice anger over drug approval delays in Australia). In addition, a recent report by Australia's Senate said that it can take over 1.5 years for a new cancer drug to receive PBS coverage, and called for a comprehensive review of the system, including a fast-track approval process for treatments with high clinical need. The slow pace of market access in Australia (already a relatively small market) has also stoked worries over loss of competitiveness in the global pharmaceutical industry.
In response, although the Ministry of Health (MoH) has attempted to blame the pharmaceutical industry for the delays – it claimed pharma companies forced patients to wait up to 15 months for breakthrough treatments by delaying filing for marketing approval in Australia – it has also embarked on various policies aimed at streamlining the drug approval process (see Australia: 26 June 2015: Australian MoH claims pharma companies force patients to wait up to 15 months for breakthrough treatments; Australia 21 September 2015: Australia approves review of Pharmaceutical Benefits Advisory Committee guidelines; Australia: 14 January 2015: Australia's subsidised high-priced drugs rises dramatically, driven by targeted therapies).
Looking ahead, the key to improved pharmaceutical market access is increased communication and collaboration between Australian regulators and the drug industry. The lack of trust was clearly highlighted in the PwC report, which cited only 42% of respondents saying that they had canvassed ideas with government bodies. However, it remains to be seen how the recent government reshuffle affects ongoing pharma-related and healthcare policies, and how this is likely to affect market access in the future.