Australian subsidies for newer drugs go begging as companies avoid paper chase

Print 28 September 2015
EJ Lane / FeircePharmaAsia

Lower costs for newer medicines through subsidies are going begging in Australia as drug companies increasingly look to avoid putting products through regulation paces needed to qualify, a report in news.com.au said, citing a PwC (PricewaterhouseCoopers) survey of 23 drug companies.

Australia Prime Minister Malcolm Turnbull

The situation means that 9 in 10 big pharmaceutical companies say they have considered not applying for subsidies--which could lower costs for newer medicines--in the last two years, the website said, noting the figure is up from 52% two years ago.

Cost and access in Australia's reimbursed drug program, the Pharmaceutical Benefits Scheme, is a central political issue with costs for newer medicines, particularly oncology therapies, a target for the Treasury. The industry alleges the system that approves and sets reimbursement prices is broken.

In May, industry group Medicines Australia called for a more flexible and fast-tracked approach to approving new cancer drugs, citing data that shows Australia ranked 18th out of 20 comparable countries on access to innovative new medicines.

But the drug approval body, the Pharmaceutical Benefits Advisory Committee, has responded saying any change to the approval process would "greatly increase the cost to the community and diminish the sustainability of the Pharmaceutical Benefits Scheme without any commensurate gain in health outcomes."

Even in the case of the subsidies, the website said, about half of the medicines that do seek approval are denied in the first attempt. It's worth noting, however, that the pace is down from 89% in 2010, with PwC saying nearly two-thirds of the surveyed 23 firms thought the system had not improved or had deteriorated in the last two years.

However, Australia's Department of Health says drug companies are partly to blame for delays, the website said. Most companies on average don't apply for a subsidy in Australia until 38 weeks after they apply for reimbursement in the United States and 29 weeks after they do so in Europe.

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