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15 Mar 2016

The Federal Government has begun to draw down putative savings from cuts to pathology and diagnostic imaging bulk billing incentives to subsidise access to advanced hepatitis C treatments.

In a step Health Minister Sussan Ley said could lead to the eradication of hepatitis C in Australia, around 233,000 Australians diagnosed with the disease will now pay as little as $6.20 a prescription after four medicines – some previously costing as much as $110,000 for a course of treatment – were listed in the Pharmaceutical Benefits Schedule.

“With this announcement there is great hope we can not only halt the spread of this deadly infectious virus, but eliminate it altogether in time,” Ms Ley said.

The initiative has won praise from advocates who have campaigned for years for subsidised to the medicines, which they say will save many lives.

Hepatitis C, an infectious blood-borne virus that attacks the liver and can cause cirrhosis and cancer, kills around 700 a year and leaves thousands more seriously ill.

The Government’s decision to list the drugs sofosbuvir (Sovaldi), sofosbuvir with ledipasvir (Harvoni), daclatsavir (Daklinza) and ribavirin (Ibavyr) came eight months after the Pharmaceutical Benefits Advisory Committee (PBAC) recommended that sofosbuvir be listed on the PBS because of “high clinical need”.

This overturned advice from the PBAC a year earlier, in which it recommended against listing the drug because it was likely to have “a high financial impact on the health budget”.

In recommending the drug’s listing, the PBAC warned it was likely to cost taxpayers $3 billion over five years to put 62,000 chronic hepatitis C patients through a course of treatment – three times the Government’s current budgeting.

Though sofosbuvir has been hailed as a “game-changing” medicine that can cure hepatitis C in as little as 12 weeks, its prohibitive price – a course of treatment can cost more than $110,000 – has meant that until now it has been out of the financial reach of most sufferers.

Listing on the PBS means a prescription will cost as little as $38.30 for general patients and $6.20 for concession card holders.

But the Health Minister has politicised the announcement by explicitly linking the decision with the highly controversial move to axe bulk billing incentives for pathology services and cut them for diagnostic imaging.

The Minister has argued the incentives had done little to lift bulk billing rates and had instead gone to boost the bottom line of big pathology and radiology operators.

The Government expects that axing the incentives will save $650 million over four years, and Ms Ley said the decision was part of the Coalition’s drive to remove waste and inefficiency from health spending, freeing up funds for better uses.

“Every dollar spent on inefficiency in the health system is a dollar we cannot invest in new breakthrough cures like this one,” the Health Minister said.

But the savings measure is yet to be approved by Parliament, and the Government may have a fight on its hands.

The pathology sector has vowed to oppose the measure, and plans to use thousands of pathology collection centres and imaging clinics around Australia to promote messages criticising the move.

Providers warn that the change will mean that many patients will be charged a co-payment for having a pathology or diagnostic imaging test, potentially causing some to delay or avoid screening, open up the risk of undiagnosed cancers and other serious illnesses.

Adrian Rollins

Published: 15 Mar 2016