The Australian government's "ill-considered" decision to defer the listing of certain drugs on the Pharmaceutical Benefits Scheme (PBS) "puts at risk affordable access to medicines for Australians, and will have significant consequences for the pharmaceutical sector, including R&D," a Senate committee has warned.

The deferrals, plus the government’s decision to extend all PBS listings with financial implications for the budget to Cabinet review (previously this step was necessary only for drugs costing over A$10 million a year) are "unacceptable," and "based on short-term and ill-conceived" goals which expose the national health system to "significant risk," adds the Senate Finance and Administration References Committee, reporting to Parliament on its inquiry into the government's management of the PBS.

The Senators dismiss the government's argument that, for some deferred medicines, there are alternatives already listed on the PBS, saying this view "is based on a poor understanding of the complexities inherent in assessing the effectiveness of medicines for individuals," and that it "essentially creates two classes of people - those who have access to a suitable medicine that is subsidised, and those who do not." 

Specifically, the Senators estimate that the referrals could affect: - 100,000 people in Australia who live with schizophrenia; - 50,000-100,000 who suffer from chronic pain; - up to 40,000 who would be eligible for treatment with Allergan's Botox (botulinum toxin type A); - almost one in five people aged over 40 who are affected by chronic obstructive pulmonary disease (COPD); - over a five-year period, about 24,000  patients with venous thromboembolism; and - potentially 10,000 patients receiving in vitro fertilisation (IVF) and gamete intrafallopian transfer (GIFT) interventions.

The Senators are also "very concerned" about the uncertainty created for the industry by the decision to defer PBS listings. Before the policy change, risk assessments were based on a long-standing understanding of the Pharmaceutical Benefits Advisory Committee (PBAC)’s evaluation process and criteria for assessing of a listing application, but companies are unaware of the criteria now being used by Cabinet in making these decisions.

"The committee is of the view that this added layer of uncertainty will undoubtedly impact on investment decisions by the pharmaceutical sector, to the detriment of health consumers," says the majority report. Moreover, it warns: "there is a risk Cabinet decision-making will become vulnerable to lobbying."

The Senators note that the policy changes "came as a complete surprise” to industry, consumer and patient groups alike. "Many organisations felt that they had been negotiating in good faith with the government regarding ways to ensure the sustainability of the PBS, and were disappointed that they had not been consulted with, or informed prior to, the public announcement on the decision," says the majority report.

It also warns that this failure to consult "and the possible contravention at least of the spirit of the Memorandum of Understanding [MoU] entered into by the government and Medicines Australia will have repercussions when it comes to future negotiations with the industry."

The Senate panel's findings, and its call for the government to reverse these policy changes, have been widely welcomed. Dr Brendan Shaw, chief executive of research-based industry group Medicines Australia, said it was "extraordinary that, apart from the Department of Health, none of the 65 submissions to the inquiry supported the government's action on this issue."

"Patients don't support it, doctors don't support it, the broader community doesn't support it and industry doesn't support it," he said.

Carol Bennett, chief executive of the Consumers Health Forum (CHF), which has led a public campaign against the policy changes, said the government had overturned a "world-admired system that has been in place for over 60 years, when the recommendations of the rigorous PBAC were rubber-stamped by Cabinet, except in the case of a couple of very expensive new drugs."

She also welcomed Prime Minister Julia Gillard's involvement in "this troublesome issue," and the fact that the Prime Minister and her office are working with the industry and the CHF to find a solution by the end of September.