Pharmaceutical benefits

Price regulation Pharmaceutical Benefits Scheme + Pharm. Benefits Advisory Committee, Pharmaceutical Benefits Pricing Authority Min. of Finance Pharm. Serv. Div. Govt. y MoHWS Min. of Trade + Min. of Health + Central Pharmacy V Min. of Industry and Commerce + DDC y... 

For a new medicine to obtain public subsidy for patients in the community, the sponsor must successfully apply for the product to be included in the Pharmaceutical Benefits Scheme (PBS). Data are required on relative cost and effectiveness, and the scrutiny of this information according to prescribed criteria is described as the fourth hurdle, that is, in addition to quality, safety and efficacy requirements that medicines must overcome, to be readily available to the Australian public. 

The authority for the Commonwealth Government to provide pharmaceutical benefits was introduced in the 1940s. Prior to that, except for the Federal scheme covering war veterans, health care was the province of the States. 

The Commonwealth National Health Act 1953 (the National Health Act), together with the National Health (Pharmaceutical Benefits)... 

The Pharmaceutical Benefits Advisory Committee (PBAC) was established under Section 101 of the National Health Act, to give advice to the Minister for Health about products to be made available as pharmaceutical benefits. The minister is required to consider the PBAC s advice but is not required to follow its recommendations. The initial criteria for inclusion of new products on the PBS were comparative safety and efficacy. 

A non-statutory body called the Pharmaceutical Benefits Pricing Bureau (PBPB) was established in 1963 to make recommendations to government on the pricing of PBS-listed medicines. 

Escalation of costs led to multiple measures to limit the increase in PBS expenditure, including the introduction of an authority system for new drugs from 1988. Co-payments were eventually also introduced for concessional patients -for disadvantaged patients in 1989 and for pensioners in 1990. Details of the early history of the PBS and the myriad of subsequent changes can be found in A History of the Pharmaceutical Benefits Scheme 1947-1992. ... 

In 1988, the PBPB was replaced by the (also non-statutory) Pharmaceutical Benefits Pricing Authority (PBPA). The PBPA was required to review the prices of items on the PBS and consider items recommended by the PBAC for listing, taking eight factors in accoimt. Factor (f) - the level... 

Australia is evident from information published by the Australian Institute of Health and Welfare (AIHW). Expenditure on benefit-paid items under the PBS is the largest single component of total expenditure on pharmaceuticals. In 2001-2 the cost to government under the PBS, not including expenditure under the Repatriation Pharmaceutical Benefits Scheme (RPBS) was AUD 4181 million. This increased to an estimated AUD 4572 million in 2002-3 with the share of total cost of the PBS met by the Commonwealth being 84.2%. 

On 1 February 2004, the Schedule of Pharmaceutical Benefits included more than 600 drug substances in 1500 forms and strengths (items) supplied as 2617 different drug products (brands). Restrictions apply to approximately 800 items and approximately 300 require authority prescriptions. 

Listing on the Pharmaceutical Benefits Section - the Fourth Hurdle ... 

Applications for listing a product on the PBS are generally submitted by the pharmaceutical company sponsor, which has the data required to support the application, to the Pharmaceutical Benefits section of the Department of Health. However, submissions from medical bodies, health professionals or members of the public may also be considered. 

Pharmaceutical Benefits Advisory Committee rejections, and the lack of available appeal mechanisms, have been increasingly challenged in recent years. One route available is to pursue a legal challenge to the Federal Court of Australia for a review of the decision. Most recently, in March 2000, the Federal Court rejected a pharmaceutical company s application to overturn the recommendation of the PBAC not to list a product on the scheme. 

The PBPA makes recommendations to the Department of Health on the prices for new items that have been recommended for PBS listing by the PBAC. It also reviews the prices for all items listed on the Schedule of Pharmaceutical Benefits at least once per aimum. The PBAC provides advice to the PBPA regarding comparison with other treatments and comparative cost-effectiveness. 

The Commonwealth Government negotiates an agreed wholesale price with the pharmaceutical company sponsor, through a senior officer in the pharmaceutical benefits branch. This process applies to all products subsidised as PBS-listed items under Section 85 of the National Health Act, including products that are priced below the general patient co-payment. 

A wholesaler margin is then set on the supplier s price, a pharmacist margin is applied to the wholesaler s price, and a pharmacist dispensing fee is also added, determined by the Pharmaceutical Benefits Remuneration Tribunal. Patients pay the co-payment (and any premiums) to the pharmacist when the PBS-listed medicine is dispensed, with the balance of the cost of the product being paid to the pharmacist by the government. 

The PBAC and PBPA also consider the prices of pharmaceuticals listed imder Section 100 of the National Health Act, which allows for an alternative means of providing an adequate pharmaceutical service in circumstances where pharmaceutical benefits cannot be conveniently and efficiently supplied in the usual manner under the PBS. Drugs in this category, such... 

In 1998, the Commonwealth Government introduced TGPs, a form of reference pricing, to certain therapeutic drug classes listed on the Schedule of Pharmaceutical Benefits - H2 receptor antagonists, ACE inhibitors, HMG CoA... 

Closing date to amend Schedule of Pharmaceutical Benefits 14... 

An implementation group was established to implement the recommendations, which were all accepted in principle. A key recommendation is to pubhsh the Schedule of Pharmaceutical Benefits electronically to enable monthly listing updates. This will require significant upgrading of the department s information technology systems. It will take some time to fully implement all the recommendations. 

Sloan C. A History of the Pharmaceutical Benefits Scheme 1947-1992, Canberra AGPS 1995. 

The influence of the recommendations made by NICE are international and its decisions are closely monitored by other similar bodies (e.g. Canadian Coordinating Office for Health Technical Assessments (CCOHTA) and Pharmaceutical Benefits Advisory Committee (PBAC)) across the world and as a consequence the NICE website is achieving around 35 000 hits per day. The... 

Danzon, Patricia M. 2000. Pharmaceutical Benefit Management An Alternative... 

Commonwealth Department of Human Services and Health. Guidelines for the pharmaceutical industry on preparation of submissions to the Pharmaceutical Benefits Advisory Committee including major submission involving economic analyses. Canberra (Austraha) Australian Government Publishing Service 1995. 

Henry, D. A., S. Hill, and A. Harris. 2005. Prescription Drug Prices and Value for Money. The Australian Pharmaceutical Benefits Scheme. JAMA 294 (20) 2630-2632. 

Sainsbury, P. 2004. Australia-United States Free Trade Agreement and the Australian Pharmaceutical Benefits Scheme. Yale Journal of Health Policy Law Ethics 4 387-99. 

PricewaterhouseCoopers LLP (2001). HCFA Study of the Pharmaceutical Benefit Management Industry. Washington, D.C. Centers for Medicare and Medicaid. Available at www.cms.hhs.gov/researchers/reports/2001/CMS.pdf. 

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