[Ip-health] Re: US Drug Company Uses New Review for PBAC Decision

[Tom Faunce]

US drug company appeals PBS decisionPRINT FRIENDLYEMAIL STORY
Australian Broadcasting Commission (ABC) The World Today - Monday, 8 May
, 2006  12:43:00
Reporter: Simon Lauder
ELEANOR HALL: It's just over a year since the Australia US Free Trade
Agreement came into force, opening the door for US drug companies to
force a review of decisions about which drugs are subsidised by the
Australian Government.
Now that power is being used by the US drug company Eli Lilly.
It is appealing an Australian decision not to put an osteoporosis drug
on the Pharmaceutical Benefits Scheme, as Simon Lauder reports.
SIMON LAUDER: Forteo is a drug designed to help osteoporosis patients at
high risk of fractures.
After having its application for Forteo to be included on the
Pharmaceutical Benefits Scheme knocked back four times, American company
Eli Lilly is making use of provisions under the US Free Trade Agreement.

It's the first to apply for an independent review of a decision from the
Pharmaceutical Benefits Advisory Committee.
Professor Philip Sambrook is the Medical Director of Osteoporosis
Australia, and he's advised Eli Lilly on the process.
PHILIP SAMBROOK: We've gone to the PBAC, telling the PBAC that we think
that this is a very useful drug in its elect population. It's moderately
expensive, so it needs to be used appropriately. But for people with
very low bone density, it's probably the only drug that can reverse the
process.
SIMON LAUDER: Professor Sambrook says Forteo needs to be subsidised
because otherwise it would cost a patient about $8,000 a year.
PHILIP SAMBROOK: We need the drug for certain patients, not for
everyone, but so far on various technical and economic reasons it's been
rejected. And I think both the PBAC and Lilly are probably interested in
the outcome of the appeal, because this is the first time this new
process will have happened, and no one knows how it's going to work.
SIMON LAUDER: Do you dispute the committee's claim that Forteo has
uncertain clinical benefit?
PHILIP SAMBROOK: Oh yes, I would dispute that. I think there's no doubt
that it has proven clinical benefit.
SIMON LAUDER: How many osteoporosis sufferers are likely to be affected
by this decision?
PHILIP SAMBROOK: Oh, I mean, there are two million people with
osteoporosis in Australia, but we're talking only a very tiny percentage
of people who would be eligible or appropriate for this drug. You know,
probably only a couple of thousand would be the sort of people that we
would be wanting to treat.
SIMON LAUDER: The drug was rejected partly because of the committee's
concerns about cost effectiveness.
Senior Lecturer in bioethics, health law and human rights at the
Australian National University, Doctor Tom Faunce, says at the moment in
Australia drugs have to be proven to be innovative in the objectively
demonstrated value they add to patients, compared to existing drugs and
treatments.
So, cost effectiveness is part of the Australian system's definition of
innovation.
TOM FAUNCE: Manufacturers, such as Lilly would probably have a different
definition and so they would think, for example, that because they've
got a new drug it should be listed on the PBS, and that's how innovation
should be rewarded.
So there's a difference of opinion, and I guess this creates a situation
where a lot of lobbying can go on behind the scenes.
SIMON LAUDER: Two years ago Dr Faunce warned a Senate inquiry that the
free trade agreement would have a disastrous effect on the operation of
the Pharmaceutical Benefits Scheme.
He says the committee still has no way of knowing the breakdown of a
drug company's pricing system.
(to Tom Faunce) So in other words, the pharmaceutical benefits system
has to consider whether or not it will be subsidising the advertising
budget of a drugs company?
TOM FAUNCE: Exactly. And I think we need to have, what we need to have
in Australia is a debate as to what really is innovation.
There's a strong argument that generic, so-called generic drugs, are
innovative in their own way, in the sense that they manage to create
products that have equal safety, equal efficacy of the brand-name drugs,
but do so at a substantially reduced price.
Now, from the point of view of the patient, that's an innovation. I
don't think that's the definition of innovation that we're seeing in the
sort of companies that are pushing for these reviews.
ELEANOR HALL: The ANU's Tom Faunce speaking to Simon Lauder.


Dr Thomas Alured Faunce
BA LLB (Hons) B Med. PhD.
Senior Lecturer ANU College of Law
(Bioethics, Health Law and Human Rights)
Senior Lecturer ANU Medical School
(Chair: Personal and Professional Development)
Project Director, Globalization and Health
Centre for Governance of Knowledge and Development
RegNet, ANU
Ph: (02) 61253563