Applying the Australian Guidelines for the Reimbursement of Pharmaceuticals

At the start of 1993. the Guidelines for the Pharnl:lceulica\ Industry on Preparation of Submi ssions 10 the Pharmaceutical Benefi ts A dvisory Committee (PB AC)II J took effect in Australia. The guidelines require pharmaceutical companies to include an economic evaluation of their drug products in their applications for reimbursement through the government subsidisation scheme. the Pharmaceutical Benefits Scheme (PBS). This requirement applies to new drugs or to currently subsidised drugs for which changes to current prescribing restrictions arc requested, but excludes generics. Draft guidelines to assis t compan ies in the preparation of applications to meet the new requirements were released in \990121 and re ... ised in 1992 on the basis of a number of economic e ... aluations submitted vol untari ly d uring an optional phase-i n period. The PBS represents a second tier of drug regulation in Australia, the first tier being the appro ... al of a drug for marketing by the Therapeutic Goods Administration (TGA). Before any drug can be reimburscd, the TGA must grant marketing approval on the basis that it is safe. efficacious and of acceptable quality. The PBS pro ... ides a list of selected marketed drugs that arc considered appropriate fo r go ... ern ment subsidy. As all residents of Australia (18 million people) can obtain drugs subsidised on the PBS, it covers more people than any other fornlUlary in the world and represents the major market fo r prescription drugs in Aust ralia. Appl icat ions for drug subsidy arc lodged for consideralion by the PBAC. Thi s is an independent statutory commillee comprising general practitioners, spec iali st physicinns, clinical pharmacologists and pharm:lci sts. It recommends to the Minister of Heallh drugs il considers should be subsidised :lnd nd ... ises the nationa l Pharmaceutical Benefits Pricing Authori ty (PB PA) on the relative clin ical importance to ass ist the Authority in negotiating appropriate prices. The PB AC has historically based its decisions fo r listing on the c rit eria of cOlllparalille effect i ... eness, cOlllparative safety and clinical need. Following a change in legislat ion, the PBAC is now required to a lso consider the economic efficiency or · ... alue for money' of drugs. Implementation of this policy represents t he fi rst fo rmal :lnd systematic usc of economic e ... a!untion in healthcare decision-making. To support the PBAC in meeting thi s new requ irement. the Federal Department of Health appointed officers to pro ... ide assessments of the submissions and, more recently. the PB AC itself established an expert subcomm ittee. Thi s article (i) re-emphasises the basic approach adopted by the guideli nes,ll1 (Ii ) describes the numbers and types of analyses submitted t o the PB AC, (ii i) presents some techn ien l issues Ihm ha ... e emerged from the assessments of submissions, and (i ... ) describes the process of re ... iew of submi ssions to the PB AC.