The Australian government has announced that it has agreed to a 40% price cut against current Alzheimer's disease treatments subsidised by the Pharmaceutical Benefits Scheme, effective from 1 May, while restrictions on patient access are also set to be eased. This follows the publication of the Pharmaceutical Benefits Advisory Committee's post-market review of the four drugs – donepezil, rivastigmine, galantamine, and memantine.
IHS Global Insight perspective | |
Significance | The Australian government has announced 40% price cuts against four Alzheimer's treatments currently reimbursed by the Pharmaceutical Benefits Scheme (PBS) – donepezil, rivastigimine (Exelon; Novartis, Switzerland), galantamine, and memantine – following a post-market review of the cost-effectiveness of the treatments carried out by the Pharmaceutical Benefits Advisory Committee (PBAC). |
Implications | The government is also following advice issued in the PBAC's review to simplify restrictions on use, removing the requirement for patients to show a minimum level of improvement in an Alzheimer's disease test upon requesting a renewed prescription after six months' use. |
Outlook | Apart from easing access to treatment for Australia's 130,000 Alzheimer's patients, the move to lower the cost of current treatments is in anticipation of the arrival of new treatments for Alzheimer's being developed in future, with the expectation that any new drugs will be used alongside the existing treatments. |
The Australian government has responded to a Pharmaceutical Benefits Advisory Committee (PBAC) post-market review of four anti-dementia drugs used to treat Alzheimer's disease by simplifying access conditions for those drugs reimbursed by the Pharmaceutical Benefits Scheme (PBS). According to a statement released today by Minister of Health Tanya Plibersek, from 1 May, patients trying to renew prescriptions will no longer have to prove a minimum level of improvement in Alzheimer's symptoms, but can continue receiving subsidised treatments at a doctor's request, with a newly established streamlined authority approval system. The government stated that it has also negotiated a 40% price reduction with pharma firms in relation to the four drugs – cholinesterase inhibitors (CEIs) donepezil, rivastigmine (Exelon; Novartis, Swtizerland) and galantamine; and the N-methyl-D-aspartate (NDMA) receptor antagonist memantine (for a link to the statement, see here).
PBS conditions on use
CEIs and memantine were recommended for reimbursement on the PBS in late 2000, with certain restrictions imposed on use. These include a requirement for patients seeking treatment beyond six months to show a two-point or more improvement in symptoms as measured by the Mini-Mental State Examination (MMSE), or similar cognitive improvement as measured by the Alzheimer's Disease Assessment Scale-Cognitive sub-scale (ADAS-Cog).
With little initial evidence available regarding use beyond six months when the drugs were first approved, a PBAC review was initiated in March 2012 – the Review of PBS Anti-dementia Drugs to Treat Alzheimer Disease – to investigate the drugs' cost-effectiveness in relation to original assessments. This followed a 2011 study which found that around 60% of Australian patients continued treatment beyond six months, significantly higher than the 15–35% expected based on data from clinical trials.
PBAC review recommends 40% PBS price cut
The review's findings include a judgment that the greater extent of use of the four medicines means that original cost-effectiveness evaluations made by the PBAC in 2000 are no longer valid. This led to the recommendation that a 40% price reduction be agreed with manufacturers for all four drugs "to re-establish cost-effective use of these medicines". Other findings include a recommendation that alternatives to the MMSE and ADAS-Cog be considered in terms of assessing patients at six months' of use. The PBAC viewed the need to prove clinical benefit over six months as appropriate to ensure meaningful use of the drugs.
For a link to the review and its findings, see here.
Outlook and implications
The Australian government has adopted the PBAC review recommendations, with Plibersek's statement noting that a 40% price cut has been agreed with manufacturers of the four drugs. Last year, PBS spending on the four drugs amounted to AUD60 million (USD61.63 million). Apart from Exelon, the drugs are all off-patent, and the decision on price affects a number of generic versions. Restrictions on use of the drug beyond six months are also set to be simplified; exact details of the new restrictions have not been released yet, and can be expected to be included in the new price listings once they are published to the PBS on 1 May. The Australian government is beginning to make systematic use of post-market reviews, with anti-coagulants blocked from reimbursement following a review in December last year, while asthma drugs and diabetes treatments are also subjects of ongoing reviews.
According to Plibersek's statement, patients will be allowed to continue treatment "for as long as their doctor and carers consider it to be effective", and Australia's 130,000 Alzheimer's disease sufferers stand to benefit from easier access to their treatments. The country's Alzheimer's burden is set to increase in coming years, with the Australian government predicting that the number of sufferers will reach 450,000 by 2050. The review of current Alzheimer's treatments also prepares the way for an expected new generation of drugs treating Alzheimer's, with Plibersek noting that new treatments would be "likely to be added to existing treatments rather than to replace them". Research and development (R&D) into Alzheimer's disease has attracted huge amounts of funding in recent years – a New England Journal of Medicine study found that US spending on dementia-related illnesses exceeds the spend on cancer and heart disease currently, and is expected to double in the next 25 years. Although the disease has proved a difficult R&D target with several high-profile failures, Otsuka (Japan) recently bought into a candidate being developed by Lundbeck (Denmark), while Merck & Co (US), TauRx (Singapore), and Baxter are also developing candidates (see Japan - Denmark: 26 March 2013: Lundbeck and Otsuka agree on development and commercialisation collaboration for Alzheimer's disease treatment).
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