Australia's government plans to allow doctors and pharmacists to offer patients biosimilars as well as generics as alternatives to biologics, but pharmaceutical companies argue that more research is needed to protect patient safety.
IHS Life Sciences perspective | |
Significance | Australia's Pharmaceutical Benefits Advisory Committee (PBAC) plans to allow doctors and pharmacists to offer patients biosimilars as alternative treatments, provided they are safe and effective. |
Implications | The government expects the decision to save AUD880 million (USD684 million) over the next five years. |
Outlook | The PBAC decision is facing opposition from the pharmaceutical industry, with the decision expected to significantly drive uptake of and competition from biologics. |
Australia's government plans to allow doctors and pharmacists to offer patients biosimilars as well as generics as alternative treatments, provided they are safe and effective, the Pharmaceutical Benefits Advisory Committee (PBAC) said in a statement. Read the PBAC's statement on the safety of biosimilars here.
The government expects the decision to save AUD880 million (USD684 million) over the next five years, and said that patients would be free to choose to continue taking their original medications after being informed of their options.
The Australian government spent approximately AUD2.3 billion on biologic treatments in the 2013/14 financial year. Biologics have also increased to a quarter of the PBS's budget currently, compared with approximately 4% a decade ago, local media quoted the country's health minister Sussan Ley as saying.
The government hopes that biosimilars would help lower drug spending, as well as make treatments more affordable to patients. Out of the top-10 treatments reimbursed by the PBS, five are biologics that without taxpayer subsidy would otherwise cost patients AUD400–1,700 per treatment.
The PBAC said in the press release, "As with the introduction of generic drugs in the past, many expensive, high-use biologic drugs are coming off patent in the next five to 10 years in Australia and this presents an opportunity for other companies to produce these biologics which may make the drugs more affordable."
The PBAC plans to consult with other stakeholders to gain feedback on the implementation of its decision, according to the statement.
Outlook and implications
The PBAC decision is facing opposition from the pharmaceutical industry and consumer groups, which argue that patient safety is at stake and that more research is needed. Lobby group Medicines Australia told an Australian Senate committee that the decision was "out of step" with the rest of the world in terms of putting patient safety first, while Consumers Health Forum said the introduction of biosimilars was premature.
If implemented, the PBAC's decision is expected to increase the uptake of biosimilars, particularly given the government's AUD20-million advertising campaign to promote this type of medicines, announced in a package of PBS reforms last month (see Australia: 28 May 2015: Major Australian PBS reform to free up USD5 bil. for investment in new medicines and pharmacies). This focus on biosimilars as a means of cost-saving marks a change in the Australian government's stance, which was reflected in the PBAC's earlier refusal to offer filgrastim biosimilar Nivestim as an equivalent substitution.
However, pharmaceutical companies are also expected to face increasing competition post-patent expiry, with biosimilars becoming available alternatives alongside generics. In addition, New Zealand's PHARMAC, which already makes significant use of biosimilars in cost-saving, may also look to Australia's example as a model for future policy development (see New Zealand: 22 December 2014: New Zealand's PHARMAC highlights role of biosimilars in healthcare savings).