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13 May 2014

The nation’s chief medicines advisor has approved the publicly-subsidised supply of two extremely expensive drugs, on condition that they prove to be as effective as claimed.

The Pharmaceutical Benefits Advisory Committee (PBAC) has recommended that the $300,000 a year cystic fibrosis medicine Kalydeco, and the $500,000 a year treatment for atypical haemolytic uremic syndrome (aHUS), Soliris, be listed on the PBS through the Managed Entry Scheme, which provides provisional listing subject to proven performance.

If agreed to by the drug companies, the arrangement would see patients pay as little as $6 a prescription to use the extremely costly drugs.

In return, the sponsors of the medicine would commit to reimbursing part or all of the cost of their drugs if they did not achieve the promised improvements in patient health.

PBAC Chair Dr Suzanne Hill told News Corporation newspapers the Managed Entry Scheme had been in place since 2010 and was already being used to trial the melanoma treatment Yervoy, which costs more than $120,000 for a typical four dose treatment.

“There has been an agreement in place with Medicines Australia since 2010 where the Minister will agree to list medicines under Managed Entry Schemes where the pharmaceutical companies collect data that shows they perform in the real world the same way they perform in the clinical trials,” Dr Hill said. “If the patients don’t improve, you don’t get the subsidy.”

There is mounting international concern about very high prices being charged for some medicines.

In the United States there is a mounting backlash against spiralling prices for new and existing medicines, and the American Society of Clinical Oncology is working on an algorithm to rate the cost effectiveness of expensive medicines, and will urge physicians to use the system to discuss the costs with their patients.

Global spending on cancer drugs alone jumped by almost 30 percent to $US91 billion between 2008 and 2013, according to a report by the IMS Institute for Healthcare Informatics, and a review of drug prices by news service Bloomberg found that in the US the cost of dozens of medicines for ailments ranging from cancer to multiple sclerosis, diabetes and high cholesterol had doubled or more in price since late 2007.

But manufacturers argue such price increases are justified by the high cost of developing new treatments. Forbes magazine reported that the average cost of developing a single drug was $US350 million, and could be far higher for big companies that are simultaneously developing several products, only a fraction of which will ever reach the market.

Explaining the decision to recommend the listing of Soloiris, PBAC said that “despite the extremely high price requested, the medicine could be cost-effective if the sponsor agreed to participate in a Managed Entry Scheme that would require the pharmaceutical company to rebate part or all of the price of the drug, depending on how well the patient responds to treatment”.

In its submission to the PBAC, the company estimated that supplying the drug in the first five years would cost the PBS up to $200 million.

But, while the manufacturers of Yervoy have agreed to participate in a Managed Entry Scheme for their drug, the makers of Kalydeco, Vertex, have strongly objected to the PBAC recommendation.

In a statement issued late last month, Vertex said it was “extremely disappointed” with the conditions the PBAC had imposed.

“These conditions fail to reflect the substantial clinical benefits recognised by the PBAC, and would result in limiting the number of eligible Australians who would be able to receive Kalydeco,” the company said. “We believe that physicians are in the best position to make treatment decisions, based on what is most relevant to individual cystic fibrosis patients.”

Vertex said it was particularly unhappy with PBAC conditions that it said would exclude the sickest patients from receiving Kalydeco, and with discontinuation criteria which it believes would result in patients being taken off treatment despite benefiting from the drug.

“Unlike any other country, Australia is seeking to impose strict eligibility and discontinuation criteria to limit the number of patients who could benefit, or are showing benefit, from this medicine,” Vertex said, signalling it was unwilling to enter into the proposed Managed Entry Scheme arrangement.

“We hope the Government will reject the unreasonable conditions recommended by the PBAC and list Kalydeco so all eligible Australians can benefit,” it said.

Adrian Rollins


Published: 13 May 2014