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Community Affairs Legislation Committee
DEPARTMENT OF HEALTH AND FAMILY SERVICES
Program 2—Health care and access
Subprogram 2.2—Pharmaceutical benefits
- Committee Name
Community Affairs Legislation Committee
DEPARTMENT OF HEALTH AND FAMILY SERVICES
Program 2—Health care and access
ACTING CHAIR (Senator Eggleston)
- Sub program
Subprogram 2.2—Pharmaceutical benefits
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Table Of ContentsPrevious Fragment Next Fragment
Community Affairs Legislation Committee
- Start of Business
DEPARTMENT OF SOCIAL SECURITY
Program 2—Income security for people with a disability and for carers
- Subprogram 2.1—Disability support pension
- Subprogram 2.5—Mobility allowance
- Subprogram 2.6—Child disability allowance
- Program 3—Income security for the unemployed
- Program 4—Income security for families with children
- Program 5—Housing
- Subprogram 7.2—Compliance and recovery
- Subprogram 7.3—Corporate infrastructure
- Senator Newman
DEPARTMENT OF HEALTH AND FAMILY SERVICES
- Program 1—Public health
Program 2—Health care and access
- Subprogram 2.1—Medicare benefits and general practice development
- Subprogram 2.2—Pharmaceutical benefits
- Subprogram 2.3—Acute care
- Program 3—Aboriginal and Torres Strait Islander health
- Program 4—Family and children's services
- Program 5—Aged and community care
- Program 6—Disability programs
- Senator Herron
Content WindowCommunity Affairs Legislation Committee - 25/02/98 - DEPARTMENT OF HEALTH AND FAMILY SERVICES - Program 2—Health care and access - Subprogram 2.2—Pharmaceutical benefits
Senator WEST —I will put some on the pharmacy intranet trial on notice if I may, please. In the previous round, in question number 211, Senator Forshaw asked:
With reference to therapeutic premiums can the start date 1 February 1998 be delayed to allow more information to inform the public?
It provided an answer. It says that all private GPs, specialists and pharmacists were being sent a TGP information pack. When were those packs sent to GPs, specialists and pharmacists?
Dr Graham —I cannot give you an exact date. They went over a period of a couple of weeks but it was about the middle of January that they were sent out.
Senator WEST —Right. Can you take that on notice, please?
Dr Graham —Yes. As I said they were sent out over a period because of the number of them. It was in that period but I can give you what dates we can.
Senator WEST —Yes, please. Given the start date of 1 February, some people did not have much time to get their head around it, did they?
Dr Graham —There was a lot more lead[hyphen]up to that, too. There were letters sent out from the parliamentary secretary on two occasions. Those letters commenced in mid December in which we flagged to the doctors the information that we had available at that time and as soon as the information on prices was known that was also sent to the doctors. The feedback we have had from the doctors is that they have been very satisfied with the level of information. Towards the end of January we also had a satellite television broadcast to all doctors who wanted to attend centres to look at that. As I said, I think the level of information, from the feedback that we have had, has been acceptable to the doctors.
Senator WEST —I see. What has been the cost of this exercise?
Dr Graham —The cost of our publicity campaign—this is the program put in place by the government—has been in the order of $2.5 million and also there was an associated amount given to community pharmacies through the Pharmacy Guild of $4 million.
Senator WEST —That was given by the government to community pharmacies?
Dr Graham —Yes.
Senator WEST —Has it been a $4 million campaign or has it been a six and a half million dollar campaign?
Dr Graham —Six and a half.
Senator WEST —Six and a half. Who has devised the campaign?
Dr Graham —The campaign within the government has been through our resources within the department coordinating it, using outside expertise on a needs basis. In the case of the Pharmacy Guild, they have developed their own campaign with very close consultation with us.
Senator WEST —You say you coordinated the government campaign. Who was actually responsible for the campaign?
Dr Graham —I can give you some names.
Dr Morauta —Is it a question about the consultants or a question about the officers in the department?
Senator WEST —The consultants.
Dr Graham —We use Blue Moon Research for quantitative developmental research for the information program, in other words the market testing; Wallace Consulting Group again for research in the marketplace; Turnbull, Porter and Novelli which was issues management and related public relations; and DB Needham.
Senator WEST —That name comes up again.
Senator FORSHAW —And not every blue moon, either.
Senator WEST —No. Never heard of Blue Moon Research. That is a new name. Have you used them once every so often, or not?
Dr Graham —We have used them previously.
Senator WEST —How were these groups selected? What was the method of selection?
Dr Graham —In some cases, such as DB Needham, we have an ongoing contract at the moment which went through the normal processes of obvious short listing and they were used in this campaign. Turnbull Porter Novelli was through a selective tender. The Wallace Consulting Group and the Blue Moon were all through selective tenders.
Senator FORSHAW —Could you provide the details as to how much they have been paid and what work they have done, or are required to do? I understand that the campaign is still running, certainly, at least in respect of the ads that have been appearing in newspapers, the ones put in by the PBS or the government.
Dr Graham —Yes. The campaign or program will run for a few more months yet, and in fact there is some money for the next year that may continue the campaign if it is necessary. So, yes, there is an expectation that it will continue.
Senator FORSHAW —Going back to those consultants you mentioned, how much was each of them paid, or to be paid, for specific work?
Dr Graham —I have some amounts here, but it might be better to present it to you in a—
Senator FORSHAW —Have a go now and give us a list of it later.
Dr Graham —All right. The contract price for Blue Moon Research was $44,960. For the Wallace Consulting Group it was $88,668. For Turnbull Porter Novelli it was $50,000, but there are some bills to still come in, and for DB Needham we have not got a final cost for that yet. That is including placing he advertising, so that, as you say, is ongoing.
Senator FORSHAW —How much is the DB Needham likely to be? What specifically are we talking about?
Dr Graham —I would need to take that on notice because a substantial cost is placing the ads which is a cost extra to DB Needham. But their actual consultancy cost I would need to take on notice.
Senator FORSHAW —I will just ask a couple of other questions on this. With respect to the advertising campaign I have seen—and I am sure that a lot of other people would have seen the ads in the paper—the one with the four capsules, you spoke earlier about the amount for the government's campaign, $2[half ] million and $4 million given to the pharmacy association. Could you indicate the sorts of responsibilities there have been for each of the two campaigns? For instance, I presume that these ads were paid out of the $2[half ] million.
Dr Graham —That is correct.
Senator FORSHAW —So what was the $2[half ] million spent on in respect of the government side of it? What is being done by the Pharmacy Guild with the other $4 million?
Dr Graham —The Pharmacy Guild was given money because they are a very useful interface between the public and the pharmacy. You may have noticed on the television quite a range of advertisements that the Pharmacy Guild has been responsible for. So the Pharmacy Guild did the TV advertising. They have also provided information to their own members, and not only their own members but also all community pharmacists, in the form of pamphlets and posters within pharmacy.
On the government side, we have run such activities as the information folder that went out to all medical practitioners with comparative data developed independently of the government, the satellite television broadcasts, and the advertisements with the copy that you have got there. Some radio advertising has also been done, and pamphlets have been produced that have been very widely distributed.
Senator FORSHAW —With respect to that side of the campaign that has been under the auspices of the Pharmacy Guild, do you have or will you get details of how that money has been expended, including use of consultants, payments to advertising companies or whatever?
Dr Graham — Yes, a requirement of the contractual arrangements to transfer the money across is that it goes across in three or maybe four segments, and there has to be ongoing reporting by the Pharmacy Guild about how that is expended and what value for money we are getting from that money. Also, at the end of the time, there has to be a financial accounting of the expenditure.
Senator FORSHAW —Would you provide that information to us.
Dr Graham — I can check that out. Again, I am not certain that I can disclose the information but, if we can, we will.
Senator FORSHAW —I would like to know why you cannot, if you cannot. This is a significant amount of public money that is being given to an organisation to run a government sponsored campaign. Certainly the parliament and I am sure the public are entitled to know how it has been spent. Obviously they can see the ads on TV but it would be important to know how it was broken up.
Dr Graham — I accept your point.
Senator FORSHAW —And which consultants got it. You can tell us which consultants got the government side of the equation.
Dr Graham — I accept your point. I just need to check it through just to cover that.
Senator WEST —I want to know who are the consultants that got the jobs to do the work for the Pharmacy Guild. It would be interesting to know if Blue Moon, DB Needham, Wallace and somebody else are in there. If that is the case, they have had two goes at the public trough, one which we are obviously able to scrutinise very effectively here, the other one, if you are not going to tell us, we cannot scrutinise.
Senator FORSHAW —The original estimate for savings as a result of this therapeutic group premiums measure was $560 million over the four years. Since the original announcement, two of the six groups have been removed and therefore will not be affected, and patients are utilising drugs in those groups. One of those is the beta[hyphen]blockers and the second one is the antidepressants. I must say I am glad to see that the second one has been removed because we raised at the last estimates committee hearing the position of people on antidepressants. What happens to the estimated savings as a result of taking those two groups out?
Dr Graham —The estimated savings over the four years will be about $500 million. The beta[hyphen]blockers were a fairly small group and only had a reasonably small impact. The SSRIs were a larger group. But, if we take into account the movements in prices since the budget measure was originally designed, we will still get close, if not over, the $500 million.
Senator FORSHAW —Correct me if I am wrong on this but, on the basis of the estimated average increase for people being about $2, what does the $500 million mean in terms of the number of prescriptions, if you like? Can you quantify that? Do you just double it?
Dr Graham —The savings do not come from that figure. The savings come from the fact that when we started the measure there was a certain price for, say, the ACE inhibitors and, because of the competitive nature that has been introduced into the market where they are trying to sit at the lower base price, the base price has dropped. The saving has come from the price difference between when we started and what the price is now. There is a range of prices above that base price because companies are positioning themselves to work out what the individual patient might be willing to bear. The volume of products that we are talking about or volume of prescriptions that come under these drugs is about 25 million prescriptions a year.
Senator FORSHAW —Okay. I am sure Senator West will take this up further, but can you tell me if it is the case that, in any of the remaining four groups, the price that has ultimately been established as the base price also corresponds to the lowest price?
Dr Graham —It corresponds to the lowest average monthly treatment cost of that drug. What we do is work out, within the range of strengths and the proportion of those strengths used in the marketplace, what the average cost is of that particular drug or that particular brand that is supplied by the manufacturer, and that sets the base price. So it is not an individual strength, the lowest individual strength.
Senator FORSHAW —Are there any other situations where the base price has been set where it does not correspond to what was previously the drug that was the lowest price in that group? The minister did say that it would not necessarily be the case that, in each category within each group, the lowest priced drug would also happen to be the one that would be used as the benchmark.
Dr Graham —When we talk about products we are talking about a product that might have a strength of 2.55 in 10 milligrams.
Senator FORSHAW —Yes, I have seen the table that you have provided.
Dr Graham —It has always been anticipated that it would be the lowest price on an average monthly treatment cost basis that would set the base, as we have done for many years with brand premiums and other products within the schedule.
Senator FORSHAW —I am not so sure that it has been anticipated. If you say that was anticipated, then what you have actually done is confirmed what we have said all along. But certainly there have been statements made, and indications given, to contradict that view—and that was that it would not necessarily be the case that the cheapest brand name drug in each group would also happen to become the one upon which—
Senator WEST —The reference price drug.
Senator FORSHAW —The reference price.
Senator WEST —Is it possible for you to give us a list of the initial reference price drugs used to set the price, if it was a single drug? When the reference price was being set did some of the drug companies alter their prices downwards, so that you actually ended up with a whole stack of them at the same price and with only one or two at a higher price? Did others come down to meet the reference price, or did they come down first so that the bulk of them were at a level and that became the reference point?
Dr Graham —As I said earlier, the way therapeutic group premiums work—or reference pricing, if you want to call it that—is to open up the marketplace, where the market determines where they want to position their products. Probably, in the four groups, I can think of only one product that probably did not move in price.
Senator WEST —Norvasc—was it?
Mr Graham —Yes. All the other products would have adjusted themselves according to what they think the patient or the market place would bear.
Senator WEST —That brings me back to the point I have made before. That is, if you look at the material you sent us, which was a copy of what you had sent to the GPs, when you look at Norvasc, the side effects, the drug interactions, the contraindications—all those specific things—are much, much less than the contraindications, side effects and drug interactions of the other group of drugs that it is up against. Therefore, it would appear to be an eminently superior drug in terms of fewer reactions for the patients to have to suffer. You are only measuring this in price; you are not measuring this in efficacy as well.
Dr Graham —We are. I think the opinion of many experts would be to disagree with you. Certainly there are minor differences between the different, say, calcium channel blockers, but the view is that those dihydropyridine calcium channel blockers can appropriately be grouped.
There is the authority mechanism. With an individual patient, if a doctor feels that they made need a particular product, they can use that authority mechanism. I would disagree that there is evidence to show that Norvasc or Amlodipine have a larger difference from the other two calcium channel blockers.
Senator WEST —When you listed interactions and side effects in the folder that you sent out to everybody, why did you say the only thing with Norvasc that you need to use caution with is grapefruit? Everything else had a number of things that could cause interactions and reactions.
—That may be a circumstance for using the authority system. Those other drugs would be fairly rarely used. The product information, of course, covers all known situations and that has been picked up in the comparative folder. But people on those combinations of drugs, Amlodipine or a calcium channel blocker with one of the other indications, would be
quite rare. For the majority of patients, the doctor can make the decision on which calcium channel blocker or ace inhibitor or beta[hyphen]blocker. In fact, the consensus guidelines for the treatment of hypertension may be that the first[hyphen]line treatment is a cheaper alternative, such as a beta[hyphen]blocker or a diuretic.
Senator WEST —You mentioned the specific authorisations for individuals. What guidelines have been drawn up for that?
Dr Graham —I do not have the exact wording. It is leaving the discretion with the doctor that, if they feel there is going to be a concern with a patient on medical grounds, they can request an exemption for that patient.
Senator WEST —So you cannot give me what the definite criteria will be?
Dr Graham —I do not know if I have got them here at the moment.
ACTING CHAIR (Senator Eggleston) —Would it be fair to say that your criteria will probably be the side effects of the drugs. This is a question that I am interested in too. I think a lot of people would like to know what the criteria are. Is it reasonable to assume that the criteria are that, if an individual gets a significant side effect, you will authorise the use of a different drug?
Dr Graham —Certainly that would be one ground. We sought the advice of the PBAC, as I mentioned at the last estimates hearing, about what the criteria should be. They included both an expected or known reaction to a drug. Confusion was another aspect. Some patients might be confused if they were moved from one drug to another. They would be basically existing patients, not new patients. That would be grounds for seeking authority too.
We have left it fairly open for the medical practitioner to make an individual judgment on individual patients, with the expectations that practitioners understand the rationale of a measure such as therapeutic group premiums. That is really to make sure that there is wise use of medicines, both in a clinical sense and in an economic sense. The exemption is not really limiting the practitioner to making that clinical judgment.
ACTING CHAIR —My information is that a lot of doctors are confused on it because of lack of detail about what grounds on which they may apply for an authorised exemption.
Senator WEST —That is a definite complaint that I have had too. They do not know what the guidelines are, what the criteria are.
Dr Graham —We have gone to quite a degree to try to get that message across in media such as satellite television. I have not had that feedback personally. I do not know if the Health Insurance Commission operating the authority system has had that feedback either.
Ms Wood —We have not had that feedback either.
Dr Graham —But if you are aware of particular cases, you could let us know. We would certainly follow them up.
ACTING CHAIR —The view was expressed to me personally by several people.
Senator WEST —Yes, I have had the same view expressed to me or to my office. What information has been sent to the offices of doctors about the authorisation protocols? What are they?
—The information comes in a number of forms. A letter went out from the parliamentary secretary. When the PBAC had come to its decision the doctors were advised of that. There is information in the folder kit that was put out by the RACGP about the authority exemption. There was information on the satellite television broadcast about the
circumstances of the authority exemption. There is information in the pharmaceutical benefits schedule about the therapeutic group premiums and the authority exemption. I think information has been put out by the HIC through the—
Ms Wood —And doctors, if there is a problem, can also ring on the authority line.
Senator WEST —Maybe you can give me a copy of all that documentation. Is it a phone[hyphen]in mechanism for seeking the authorisation, or do they have to make a written application?
Ms Wood —Phone[hyphen]in and written. It is both.
Senator WEST —They have to do both?
Ms Wood —No, both are available.
Senator WEST —What is the reason that they have to give to get the approval for the authorisation? There is a difference between applying for an authorisation and actually getting approval.
Ms Wood —If it is the doctor's view that the patient is unable to take the alternative because of an allergic reaction or patient confusion then they are given the item number by the authority for the exemption.
Senator WEST —So one of the reasons has to be allergic reaction or confusion?
Ms Wood —That is not an exclusive list; they are two of the examples why a doctor may believe that the patient should not have the cheaper alternative.
Senator WEST —What are the reasons for which they are going to get knocked back? I am aware—not in these particular drugs, but in other drugs—that the authorisations are not, as a matter of course, routinely given. They have to meet certain criteria.
Ms Wood —Each drug does have criteria under which an authority is given and where those criteria are not met the authority is not given; that is true.
Senator WEST —Good. Is it possible to have a copy of the criteria for each of those drugs, please?
Ms Wood —Yes.
Senator WEST —How many exemptions, or authorisations, have been claimed for at this stage?
Ms Wood —At this point, approximately 7,500 exemptions have been applied for.
Senator WEST —In 25 days?
Ms Wood —Yes.
Senator WEST —We are not going at a bad rate, are we?
Ms Wood —The total authority calls that we have had over that time is 172,000. That is for all drugs.
Senator WEST —I am interested in those ones that are affected by the TGP.
Ms Wood —Then it is 7,500.
Senator WEST —They were applications for authorisation. Have they all been granted?
Ms Wood —Sorry, the exemption approvals given are 7,500.
Senator WEST —How many applications have there been?
Ms Wood —I think it is about the same, but I am not sure.
Senator WEST —Can I have those figures, please? I want to see how many have actually applied and how many have been granted, because there are important differences.
Ms Wood —If we have the figures. I am not sure whether we keep records where there is a phone call and the approval is rejected. I do not know if we keep those figures, but if we do I will supply them.
Senator WEST —Why wouldn't you keep those figures?
Ms Wood —Because sometimes doctors are only ringing for advice, not seeking an authority approval. But if they are available, I will supply them.
Senator WEST —I would have thought that for the purposes of knowing some demands on drugs, on disease incidence, on other factors, knowing the number of applications for authorisation received, and the number of authorisations approved, would have been not only fairly elementary information that would have been needed for statistical purposes, but also useful for following up what might be some minor problems with some other drugs for which people are seeking authorisations. Who made the decision that there will not be—
Ms Wood —With the written ones, they are applications that come in. What I am trying to say is that the authority line receives a number of calls and those are recorded; what is not recorded is whether every call that is received on that authority line is a request for an authority.
Senator WEST —Yes, I understand that, but I want to know the number of requests for authority and the number granted.
Ms Wood —And I said that I will get them to you if they are available.
Senator WEST —And I am saying if they are not available I want to know why—
Ms Wood —Okay.
Senator WEST —we do not keep that sort of information. I would think that it could well be the sort of information that could give you indications of possible problem areas, possible disease problems, possible reaction problems with individual drugs, maybe, and idiosyncratic reactions, side[hyphen]effects and interactions. I would have thought that the pharmaceutical people would be interested to know that sort of information. Are PBAC and those organisations not interested in knowing how many applications there are, why, and how many are accepted or approved?
Dr Graham —We certainly will have a monitoring program of the implementation of therapeutic group premiums and we are monitoring various aspects. The number of authorities will be of interest to us. If they are rejected I am not sure what the grounds for rejection might be because, as I said, we often rely on the doctor's integrity and, I suppose, capability to choose that particular patient's need. We would be interested if doctors' requests are being rejected, but I do not think they would be on clinical grounds.
Senator WEST —I am interested to know if they are on clinical grounds or not. I would have thought it would be important to know if they are on clinical grounds because, if they are not on clinical grounds, then maybe there is a need for a whole lot of education programs to be put in place for doctors on the treatment of certain diseases—in this case, hypertension, reflux, gastric ulcer and heart disease.
Dr Graham —I am sure there is a need for and a desire of various groups to provide more educational information to doctors, yes. We are working on that through our quality use of medicine strategies.
Senator WEST —But you do not have any way of knowing and linking up the number of requests for authorisations and the number of rejections of those authorisations. You can only tell me the number of approvals for authorisations; you cannot tell me the number of actual requests.
Dr Graham —I think Ms Wood said that she was not sure and will check that out, yes.
Senator WEST —I will wait with interest to see what the result is and continue to follow that up. Are written authorisation requests for a specific group of drugs or what is the reason?
Ms Wood —A doctor may choose to phone or write for any of the authority approvals.
Senator WEST —Right. I am getting away from just the TGPs at present.
Ms Wood —Yes, this is for all authorities.
Senator WEST —There are none that require `in writing only' with specific documentation to accompany the writing?
Ms Wood —I am not aware of any, but if what I answer is not correct I will fix that too.
Senator WEST —Okay, thank you. What has been the reaction of the pharmaceutical companies to these groupings? Have any of the companies written expressing concern with the measure?
Dr Graham —The reaction has been mixed. The APMA has understood the rationale for therapeutic group premiums, I think. They have said that they will support the understanding of the measure if, in fact, at the bottom they do not really like it as a measure that might impact on the industry. A couple of companies have been concerned about the measure, but as we move more into the marketplace realities of therapeutic group premiums we are now getting companies suggesting how the measure could be extended for competitive advantage.
Senator WEST —Yes. What about the manufacturers of the newer, more effective drugs? What are they saying?
Dr Graham —We are talking about groups of products that are really regarded as very similar to one another. There may be some products that have come into the marketplace later, but they have come in with the decision of the company to market a product that is really competing against something that is already there.
Senator WEST —But there is refinement going on all the time with drugs. Whilst they might have a similarity in their method of action, they can have totally different chemical compounds and chemical make[hyphen]up.
Dr Graham —These are groups of drugs that have been chosen by various groups to be both clinically and chemically similar. They are chemically related. The H2s and the statins are all very similar in a chemical as well as a clinical sense.
Senator WEST —You say that some drug companies have written suggesting that they would like the TGPs extended. What sorts of areas do they want them extended to?
Dr Graham —At this point in time, the minister has said that they will not be extended and that is a government policy. It is probably commercial[hyphen]in[hyphen]confidence because we will not be acting on that information anyway. In discussions with companies and on a couple of occasions in writing, we have had those suggestions from the industry.
Senator WEST —I see.
—Another point to make is that some of the newer drugs are coming in at the base price, whereas some of the older drugs are asking the premium. There really is a lack
of logic to equate an older product with cheapness and having more side effects. It just does not stand up to the evidence.
Senator WEST —You say we have had 7,500[hyphen]odd authorisations in three weeks. How many prescriptions would normally be written for that group of drugs in a three[hyphen]week period?
Mr Wood —I will take that on notice.
CHAIR —How much is the PBS due to increase over the next four years?
Dr Graham —Despite the therapeutic group premiums, the PBS will increase at a rate of over $200 million a year, in terms of both the drugs that are in the scheme and also new drugs entering the scheme.
CHAIR —How much of that will go to the pharmaceutical industry?
Dr Graham —The pharmaceutical industry receives about 60 per cent of the outlays of the scheme. They are getting 60 per cent of the $2.5 billion. The PBS is providing a very predictable market for the pharmaceutical industry in Australia.
CHAIR —It is not as though they are going to be deprived of essential income.
Dr Graham —Our point of view would be that innovative products are getting very close to European prices because they are putting in cases for value for money for those prices which are being accepted by the pharmaceutical benefits advisory committee for selected uses. With therapeutic group premiums, we are talking about me too products, where the company has made a marketing decision to put into place a very similar product. It is very hard, if we are paying for health or clinical outcomes, to pay a greater price for those products.
We have always said within those therapeutic groups, too, that if one product can show a benefit over the other drugs within the group and justify a premium, they would get it and that would be part of the subsidy arrangement. But with these products, we have not had that evidence to show that there is a difference between the products within the groups.
CHAIR —I thought, along the lines of what Senator West was implying, that the industry was opposed to this. I think they probably originally were. I have also been told by a number of representatives of the industry that they had come in behind it.
Mr Brown —Yes, they have. They are certainly not opposing it publicly now. I think they still feel concern about some of the price pressures that are on them but, as I said, that is a competitive marketplace. Only one company I know of has been quite reserved about the whole measure. The rest of the industry within the APMA has supported the implementation in trying to provide appropriate information both to doctors and consumers.
CHAIR —Any more questions?
Senator WEST —Not on that particular subject, but still on 2.2. Terbinafine: what is the latest? It is a bit of a moving feast here.
Dr Graham —We have a PBAC—Pharmaceutical Benefits Advisory Committee—meeting next week and we have a submission from the company to propose relisting of Terbinafine within a fairly restricted range. We have had discussions with both the dermatologists, as we discussed at the last Senate estimates, and the company—
Senator WEST —I am glad that took place.
Dr Graham —It was occurring at that point of time, too, and the company has now made a re[hyphen]submission. The company has, I think, acknowledged that perhaps some of the practices that were evident with Terbinafine when it was listed on the PBS were undesirable. I think this time around there will be much more intent to ensure that it is used appropriately.
Senator WEST —What sorts of restrictions, criteria, will there be on use?
Dr Graham —The proposal that is going to the PBAC is that Terbinafine should be used for onycomycosis in diabetic patients.
Senator WEST —That is a bit of a change from a copy of a letter that got sent to me, in response to a constituent rep, which you have signed off. It said:
The Committee is aware of the strong stance of the Australian Medical Association against differentiating between specialists and general practitioners in this way, and it has not been prepared to restrict PBS prescribing along these lines. Furthermore, it is difficult to see how the Health Insurance Commission could adequately determine what was meant by `specialist' (or even `dermatologist') so that such a restriction could be policed, particularly bearing in mind the problems of access to `specialists' in isolated areas.
It leaves me with a very definite impression that there was hesitation in using it for specific conditions or patient categories. It also said:
Other ways of targeting drugs through the PBS have been considered over the years, but for a drug such as terbinafine which is used for the treatment of a condition which affects a whole array of patients, such focus has proven difficult. For example, selecting particular patient categories, such as diabetics, would not seem a practical option.
What has changed?
Dr Graham —There are two parts to that question. In answer to the first part about restricting a drug to specialists, it certainly is difficult and it is on only very rare occasions that we have done that. As I said, the medical profession is very against selecting out various groups of medical practitioners in that way, and so the information is quite correct there.
In terms of onycomycosis, I think the point that was being made when that letter was written was that under the previous listing of Lamosil within the pharmaceutical benefits scheme, although we tried several ways of trying to restrict the drug, it proved very difficult because of the way it was being promoted and some of the other pressures in the marketplace. What the PBAC will be looking at this time around is whether the company—it is basically an amalgamation of two previous companies now—will take a much more responsible approach and assist us. Also, the medical profession has, I think, got somewhat of a message that a drug such as Lamosil, which is very expensive, should be used as it is intended to be.
Senator WEST —Is this going to apply to Loceryl, as well? I cannot remember its proper name.
Dr Graham —Amorolfine. But at this point of time, no, we have not received an application for that.
Senator WEST —Do you know if that one is being worked on? I actually have a couple of elderly constituents who are using it and seem to be quite happy with the results they are getting.
Dr Graham —Yes, some of the feedback—and I have not seen the evidence for that—would suggest that a nail lacquer of that sort is much less effective than the tablets. So I imagine the company, if they put in an application, would have to try to counter that later evidence that has started to show up from the marketplace.
Senator WEST —So this goes to the PBAC next week?
Dr Graham —Yes.
Senator WEST —Has the company dropped the price at all? Some of these drug companies have a monopoly and they are out to cream off every cent they can from the taxpayer.
Dr Graham —We drive a fairly hard bargain, the therapeutics goods premiums group, but I am not sure about the price. In fact, it would probably be commercial-in-confidence at this point of time. We will certainly be looking—
Senator WEST —I can tell you what a tube of Lamocil costs; it is $31 over the counter.
Dr Graham —I did not realise it was that expensive in the tube form.
Senator WEST —I am interested to know what the price will be, and what the indications for the use will be as well. I guess we have to wait. I hope it is resolved because I have grave concerns for a group of people out there for whom a breach in the integrity of their skin has fairly dire consequences. From my reading of the literature, Terbinafine seems to be the drug. There are other drugs that are effective but they have quite significant complications with liver failure and things like that.
Dr Graham —It has not been a debate around the effectiveness of Terbinafine; it has been a debate around whether it is appropriate to subsidise a drug that was basically out of control.
Senator WEST —So you think you are going to have it back in control. What is going to be the optimal treatment for minor fungal infections these days, and in the future?
Dr Graham —There is a number of topical products. I am not sure which is the most appropriate, but there is quite a range—
Senator WEST —It all depends on the type of infection and where the infection is. Okay, thank you for that. I will put that one down to a win.