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Private Health Insurance (National Joint Replacement Register Levy) Bill 2009

CHAIR —The technical problems have been fixed and we can now hear from Medtronic Australasia. I welcome the witnesses. Information on parliamentary privilege and the protection of witnesses in evidence has been provided to you. We have your submission, thank you very much. I would now ask either or all of you to make some comments if you choose to and then we will go to questions.

Mr Stanistreet —To the chair and the committee members, we do appreciate the opportunity to speak to our submission. We regret that we are unable to be there in person but due to the meeting we have with all our staff on the next three days it has been impossible to do that.

I would like to state that we do support the development of registries in selected areas such as the NJRR. There is little doubt that they fill a useful purpose in adding to our collective knowledge around therapies and technologies. We believe that this in turn leads to improvements in healthcare delivery. This particular registry has minimal impact on our business as we only have four spinal implants products in our range. So the impact for Medtronic is pretty minimal.

You may wonder why we wanted to contribute. We would really like to be involved in this submission because we are looking at the impact of these registries going on in the future and we believe that this legislation appears to have been drafted hastily and without the benefit of broad consultation with stakeholders. We believe this process could be improved and we think that in its current form the legislation appears to be flawed. The committee will be aware that the development of further registries is contemplated in the future. So that is our real concern. We think it is unfortunate that this legislation addressing the NJRR has been developed without stakeholder input. We hope this can be addressed before it is enacted and becomes a guide for the development of future registries. We ask that in reviewing this legislation the committee acknowledge the many beneficiaries of this registry—in particular: the general public, doctors, device companies and private health insurers—and question why it is proposed to ship all the cost to suppliers by a private health insurance arrangement.

If the committee sees fit to reject the legislation in its current form then we ask that you: first, consider directing wide stakeholder consultation to ensure the complex issues around registries are understood; secondly, consider ensuring that costs are shared between all beneficiaries and thirdly, that you make it clear that the significance of registries capturing wider therapy and device data is understood and addressed before we go into putting these registries together, and that all players should have representation in the management of registries.

That is our opening statement in terms of how we are approaching this submission at this stage.

Senator ADAMS —Thank you. I would like to ask you a question about those other beneficiaries as you see them. Can you somehow work out how all those people could be involved in partaking in the levy? What sort of process would one use to actually capture all the people that have benefited from it?

Mr Stanistreet —That is a challenging one. There is one suggestion: that the TGA manage this. We see the TGA’s role really as post-market surveillance and they could manage this process.

Mr Wiltshire —I am not sure if anyone else has brought up the example of the NJR registry in the UK where device companies do collect a levy from purchasers on behalf of the registry and pass that funding on to the registry?

CHAIR —Could you clarify a little more how people who use the registry would pay?

Mr Wiltshire —I guess there are two potential options. The UK example is that the purchasers of the product pay a levy which the device manufacturers collect and pass on. The other option would be potentially that those who wish to use the data would pay a fee to access the data.

Senator ADAMS —If this legislation was held up and you had the opportunity to consult with the department on these ideas, how would you go about it? Who would you bring in with you to do this consultation?

Mr Stanistreet —The three of us would certainly like to be involved. We see it as broader than just Medtronic and that all stakeholders should be involved in this process going forward. That is the way we would like to see it approached. The device company, the doctors, private health insurance would need to be involved in consultation. We think this process is being rushed through and therefore needs more consultation to make sure we get it right before we go forward. We believe there will obviously be further registries in the future and we need to get the process correct before we put this through for approval.

Senator ADAMS —Since you found out about the legislation, have you been in touch with the department?

Mr Stanistreet —Just through the industry association. The industry association, the MTAA, has been in contact with the department of health.

Senator ADAMS —Have you been in touch with the other stakeholders that you mentioned before?

Mr Stanistreet —No.

Senator BOYCE —I note that you are a private company. Could you give us some sort of indication, either by staff size or something else, what size company Medtronic Australasia is please?

Mr Stanistreet —We are part of a multinational organisation, which has its head office in America. In Australia we are around about 400 employees.

Senator BOYCE —Thank you. I certainly was not aware, until the evidence from your industry association and one other supplier in the area, of the potential biases that might come up in using results from registry data. Do you perceive that there is a conflict of interest in the Orthopaedic Association being the only managers of the registry?

Mr Wiltshire —When any single group that is involved runs the entire process there is the potential for a conflict of interest. We do not suggest that the Orthopaedic Association has a particular conflict of interest. However, if data being collected that involves multiple stakeholders and only one stakeholder group owns the data and directs the design of the registry, there is always the potential for a conflict of interest.

Senator BOYCE —You mentioned earlier the management of the registries should be broadened. Is that what you were suggesting? That other groups should be involved in managing the registry?

Mr Wiltshire —I think that would be appropriate. I am sure you have heard some of this from MTAA and Johnson & Johnson, but if the registry is to be truly useful for all of the stakeholders then the design of the registry needs to be broader as well to include a wider variety of end points.

Senator BOYCE —It is more the design that you think should be changed. You are not suggesting that in fact there should be some sort of an independent body managing it?

Mr Wiltshire —I think we would also suggest that an independent body, or at least a body that involves a broader representation, should manage the registry.

Senator BOYCE —I note that in your submission you say:

Industry was a significant contributor to the establishment of the NJRR.

Can I ask when that was?

Mr Stanistreet —I do not have an answer of a specific date.

Senator BOYCE —A year would be sufficient.

Mr Vale —I understand it was in the middle to late 1990s. The answer may be with the industry association, if they are still with you.

Senator BOYCE —When you say ‘a significant contributor’, was Medtronic involved in that?

Mr Stanistreet —No.

Senator BOYCE —I was just thinking that, if there had been a significant amount of consultation et cetera at that time, it would be doubly disappointing that this had occurred now with no consultation whatsoever. Would that be your view?

Mr Wiltshire —Yes, it would be our view.

Senator BOYCE —You also make the point in your submission that this cannot have been something that the Department of Health and Ageing just came up with the day before the budget. What made you make that suggestion?

Mr Vale —I do not think we actually used those words in our submission.

Senator BOYCE —No, but I think there is a suggestion here that you believe that the Department of Health and Ageing must have been considering the move for some time. Perhaps that would be a more temperate way to phrase it. Is that correct or not? I may have confused submissions by this time of the day.

Mr Vale —Yes, that is correct. We had understood from our industry association that this was a move that had been contemplated for some time. Again, just to confirm, our position is really one around the way in which this seems to have been developed hastily, and our concern is particularly that it may serve as a poor model for registries in the future. The committee will be aware that further registries have been developed and it would be a pity if we ended up with a model which did not optimise all the great benefits that can come from registries. We think this is an opportunity to take a second look at this and perhaps be sure this is a very good one that sets a benchmark for other registries going forward.

Senator BOYCE —I think you will find within the next couple of years that every hollow log in Australia will have been picked up and shaken very hard. I would like to ask you now a couple of questions that I asked Johnson and Johnson. One was: what would you expect the cost to your company to be if this legislation were implemented as it currently stands?

Mr Stanistreet —We are not quite sure, but we have four key items that would fall under this legislation. If it were the maximum of $5,000, we are talking about $20,000 potentially at this stage with this particular registry.

Senator BOYCE —The other point that has been made to us by a number of witnesses is that there would be less incentive for suppliers and manufacturers to list products that are not used very often or products that are kept in stock for revisions if this legislation were passed. Would that be your view and, if so, what types of products that you currently supply might that effect?

Mr Wiltshire —It is our view that that is a potential. For our current products there is probably not an example of that, but if you look at the potential extension of this registry into the cardiac area we could give you quite a number of examples of revision kits and revision equipment that is used for pacemaker implants, heart valve implants and stent placements that would fall into that category.

Senator BOYCE —Your company does not make cardiac implants, but you are just aware of that information, are you?

Mr Vale —Our company does make them. Medtronic covers a number of different areas, including cardiac, diabetes, ear, nose and throat, spinal, cardiac rhythm management.

Senator BOYCE —Sorry, I always thought spinal implant was your area of specialty. Could you summarise how many products in the cardiac area you think might be affected?

Mr Wiltshire —We could not give you that number off the tops of our heads, but it is quite a number of products. We do keep quite a number of kits that are purely for revision purposes.

Senator BOYCE —How long would you currently hold revision stock? How many years?

Mr Wiltshire —I will give you a similar example to Johnson & Johnson. The lifetime of a pacemaker, for example, is up to 10 years or even longer. We would have to keep products in stock for at least that amount of time.

Senator BOYCE —Thank you, that answers my questions.

CHAIR —Thank you so much for making yourselves available and for having the interest. As you said at the beginning of your evidence, this particular bill does not impact on you greatly, but in terms of the wider issue, you felt it was important to be involved, so we do appreciate that. If you think of anything else that you think we should know, you have the secretariat’s email. What happens to me is I walk away and immediately think of exactly what I should have said. If that does happen to you, just email us.

Mr Stanistreet —Thank you very much.

CHAIR —The committee stands adjourned until Monday morning at nine o’clock when we will be hearing from the department. That will also be a public hearing and it will be webcast. If people are interested in that, they will be able to see the department give evidence.

Committee adjourned at 4.21 pm