42% of Medicines Australia member companies are considering delaying bringing new drugs into the country, following the Australian government's decision to defer listing of new medicines on the Pharmaceutical Benefits Scheme (PBS), Parliament has been told.

A number of firms are "seriously considering delaying various new medicines in the areas of cancer, diabetes, cardiovascular and mental health," Medicines Australia has told the Senate financial and public administration committee, which is holding an investigation into the new policy.

In its submission to the inquiry's first evidence session, held in Melbourne last week, the industry group - which represents research-based drugmakers - warned that the policy shows the government is "moving toward a two-tier health system," because it "perpetuates a situation where high-income patients can afford better treatments for things like schizophrenia, chronic pain associated with cancer, debilitating excessive sweating and use of combination products, whereas people on lower incomes have to make do."

"The future access of Australians to medicines is being transformed into a public lottery," the group added.

Medicines Australia - whose member companies supply more than 80% of drugs available through the PBS - condemned the government's decision in February to defer listing on the PBS and the National Immunisation Programme of seven medicines and vaccines which had been recommended by the government's advisory panel, the Pharmaceutical Benefits Advisory Committee (PBAC), on the grounds of demonstrated clinical and cost-effectiveness, and also its decision to require all such recommended medicines to be considered and approved by the federal Cabinet prior to listing.

Previously, Cabinet approval had only been required for products with an anticipated annual budgetary impact of A$10 million or more.

These decisions undermine confidence in the Australian business market and "breach the intent, if not strictly the letter," of the recent Memorandum of Understanding (MoU) signed by Medicines Australia and the government on the management of the PBS, the group adds. "This MoU delivered a minimum of A$1.9 billion in PBS savings to the Australian government. In return, Medicines Australia had sought, and thought it had achieved, a period of business and policy stability for its members," it told the Senate.

The hearing was also addressed by senior representatives of a number of drugmakers,  including AstraZeneca and Allergan. The executives described the deferral policy as "appalling" and warned that it would put patients at increased risk of adverse reactions. "The end result will be that Australian patients will have to wait longer to access medicines," added AstraZeneca, in its written submission.

The panel also heard warnings from R&D Australia, a group which represents researchers in 170 hospitals, universities, institutes and philanthropic groups, that if drugmakers cannot list their drugs on the PBS, this could act as a disincentive for long-term investment, while pain management specialist Michael Cousins of Sydney University suggested that the decision to defer the pain relief drug Targin  (oxycodone and naloxone) could constitute "a denial of human rights."

Prof Cousins also warned that the government could find it difficult to attract high-quality experts to serve on the PBAC if it ignored their recommendations.

A further evidence session is due to be held in Canberra this week, and the Senate committee is scheduled to report its findings in August.