Given that the drug Aricept, used for the treatment of Alzheimer's disease, has been refused inclusion on the Pharmaceutical Benefits Scheme on three occasions by the Pharmaceutical Benefits Advisory Committee (PBAC): For each of these refused applications:

(a) was the refusal based on the ground of efficacy, safety, cost or a combination of these; and

(b) if the refusal was on the basis of cost, will the Government look at revising the current PBAC guidelines for estimating the indirect economic outcomes of drug approval to recognise the cost offsets of delayed nursing home admission, possible reduced use of respite services and health services by carers and other indirect costs related to Alzheimer's disease.

(a) At its March 1998 meeting, the PBAC declined to recommend listing of Aricept because it did not accept that the cost-effectiveness and efficacy were adequate to support PBS availability for all patients with mild to moderate Alzheimer's disease.

The manufacturing company collected additional data in late 1999 and submitted a further application for consideration by the PBAC.

The Committee deferred making a decision on the application considered at its March 2000 meeting pending the outcome of a meeting of relevant stakeholders, including expert clinicians, to develop prescribing criteria which would ensure that Aricept could be directed to those patients most likely to benefit from treatment.

At the September 2000 meeting, the PBAC decided not to recommend listing because the Committee considered the prescribing criteria and guidelines proposed by expert clinicians attending an April 2000 stakeholder meeting were impractical and too complicated to administer. Although the criteria for initiation of treatment were appropriate, the Committee was concerned that the cessation of treatment rule would not direct Aricept to those patients who experience an unambiguous clinical improvement on treatment.

(b) The PBAC's guidelines currently allow for both direct and indirect costs to be taken into account provided evidence is produced to demonstrate that such cost effects exist. When considering these applications to list Aricept on the PBS, the PBAC took into account projected cost offsets for delayed nursing home admission and reduced use of health services submitted by the manufacturer of the drug.