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COMMUNITY AFFAIRS REFERENCES COMMITTEE
07/05/2010
Consumer access to pharmaceutical benefits

CHAIR —Welcome, and thank you for coming. I understand you have all been given information on parliamentary privilege and the protection of witnesses and evidence.

Dr Tatchell —Yes.

CHAIR —We have your submission, thank you very much. I would like to invite any one of you, or each of you, to make a brief opening statement. As you can see there is a lot of interest in this issue and there are lots of questions.

Ms Riley —We would like to thank you for the opportunity to present to this inquiry, and I will start with just a very brief statement. The Pharmacy Guild of Australia obviously represents the members and our members are owners of approximately 4,300 pharmacies out of the 5,050 community pharmacies around Australia. The Pharmacy Guild aims to promote, maintain and support community pharmacies as the most appropriate primary providers of health care to the community through optimum therapeutic use of medicines, medication management and other related services.

The Pharmacy Guild supports the concepts of therapeutic groups as they are an effective way for the government to achieve value from the PBS without affecting patient outcomes and it is important to us that patients are always able to access the most appropriate medicines for their needs at no extra cost. We note—and it has not been mentioned today—that a prescriber can apply for an exemption from the therapeutic premium. That is an option for the prescriber at the time.

The Pharmacy Guild believes that the PBAC is the most appropriate body to determine therapeutic groups but would welcome more information being made regarding the process and the basis on which it makes its decision. This would improve stakeholder confidence and, obviously, transparency in this policy. The Pharmacy Guild also believes that prescribers need to be provided with adequate information regarding therapeutic groups and extension mechanisms so they can make appropriate prescribing decisions. That is all the statement we would like to make and we would welcome questions.

Senator FIERRAVANTI-WELLS —In your submission, page 5, you point out that:

… patients and prescribers are not always aware of these mechanisms and this may sometimes lead to unnecessary confusion or patients paying the TGP when they may not need to do so.

There is often confusion amongst stakeholders …

Can you comment on what you perceive to be the increased likelihood of patient confusion with this whole process?

Ms Riley —I guess the confusion issue is around the cost and a different drug being prescribed and ultimately dispensed. I think that in all the conversations previously we have omitted to consider the involvement and the importance of the pharmacist in this process. Every prescription that is written by a doctor is actually dispensed by a pharmacist and at that time, prior to dispensing that prescription, the pharmacist will be checking that patient’s previous history of medications and, if noting that it is something different, having a conversation with that patient. Many times in my pharmacy I have had conversations with people about therapeutic group premiums. They have not known about them. The doctor has not mentioned them so, as an advocate for the patient, the pharmacist will often make a phone call to the doctor to try to sort something out if it is possible. Sometimes it is and sometimes it is not, but I do not believe that doctors are fully aware of the exemptions that they can apply.

Senator FIERRAVANTI-WELLS —But, of course, it is important that you then look at how the process works. You ring up somebody—I think it is Medicare now—and probably the person on the other end of the line who is going to give you this exemption is not going to be somebody with a medical background. Correct me if I am wrong. It is all very well, Ms Riley, to talk about the exemption, but somebody who is not medically qualified is effectively going to make a decision about a patient and the interchangeability of medication when they know absolutely nothing about it.

Ms Riley —I agree and disagree. I totally agree that approval for any kind of authority is given by nonmedical people. The doctor, when obtaining authority, has to answer some fairly set questions. The doctor usually would know what those questions will be. The doctor actually makes the prescribing decision before ringing up for an authority. When applying for an authority for an exemption, the doctor has already made the decision to prescribe drug A rather than drug B. Drug A has a therapeutic group premium on it. The doctor then can, if he or she so chooses, ring the authoritative people and ask for an exemption on that premium. As our submission says on page 3, there are several reasons doctors can do this: adverse effects occurring with all the base price drugs, drug interactions being expected to occur and the possibility that transfer will cause confusion. Those are the conditions under which the doctor can apply for an exemption for that premium. Whether or not the doctor chooses to is entirely the doctor’s decision. It is often not done, though.

Senator FIERRAVANTI-WELLS —Ultimately—and you heard the evidence—when faced with a patient, if the PBAC has made a decision that drugs are interchangeable, the doctor would probably turn around and say something like this: ‘These two are interchangeable. This one’s cheaper. Do you want to change?’ Correct me if I am wrong.

Ms Riley —I totally agree with you.

Senator FIERRAVANTI-WELLS —When all is said and done, in busy practice—and I do not mean this in any negative way against the medical profession—the reality is that cost is an important factor.

Ms Riley —Sometimes it is, and sometimes it is not. I can cite examples from my own practice where the doctor said to the patient: ‘There is a cheaper drug. Would you like to take it? It’s slightly different to the one you’re taking, but you’re going to have to pay a premium on the one you are taking.’ I have numerous patients who say, ‘I will continue taking what I know.’

Senator FIERRAVANTI-WELLS —I know. But if, in the situation we are talking about, somebody has determined that two drugs are interchangeable—

Ms Riley —I am talking about products that already have therapeutic group premiums on them. This policy has been around for some years now. The first groups were announced in 1998. There are many drugs in those groups—not as many as in other groups, but there are many drugs that have premiums on them—and patients do choose, against doctors’ better judgment, to some extent, or with their better judgment, to stay on those drugs. People do have the choice, and the doctor has the ultimate choice as well.

Senator FIERRAVANTI-WELLS —There has been a lot of discussion today about the process of the formation of therapeutic groups. You have obviously watched this process—and I think this process is differentiated from the previous process, in 1998—

Ms Riley —Very much so.

Senator FIERRAVANTI-WELLS —Very much so—thank you. That is very much the case. You have obviously observed this process. Do you wish to comment at all about how you saw the formation of these therapeutic groups and whether, in your view, appropriate clinical data was taken into account in reaching that conclusion?

Ms Riley —In my view—and this is very much my view—we have no idea of how they were reached. We have no idea what data was considered. We know there was no consultation with us. I have to say that I am very concerned about how they arrived at the decisions, but I do not know how they got there, and nobody is prepared to say. The lack of knowledge and the lack of transparency are of great concern.

Senator FIERRAVANTI-WELLS —Given the scope of the sorts of drugs that we are talking about, they are going to have quite a wide impact in the community.

Ms Riley —Without a shadow of a doubt, especially the mental health drugs.

Senator FIERRAVANTI-WELLS —Exactly. Interestingly, the drugs that have been identified in this process, and given the growing level of mental health issues in the community and in particular the growing needs of an ageing population, cover two of the areas that are being targeted as part of this budget measure.

Ms Riley —Yes, I totally agree with you. It is of great concern. The lack of consultation and the lack of any indication as to how these decisions were arrived at are of concern to us.

Senator FIERRAVANTI-WELLS —I have asked the question about the definition of ‘interchangeability’ previously. Does the guild have a view about what would be an appropriate definition for ‘interchangeability’?

Mr O’Sullivan —We are happy for the PBAC to make that decision. However, we would welcome greater transparency in the decision-making process.

Senator FIERRAVANTI-WELLS —You would have heard the evidence that we discussed. I trawled through the various provisions of the National Health Act in relation to the absence of a definition. Have you gone so far as to give some thought to where you perceive there to be legislative deficiencies that this committee should give consideration to addressing?

Mr O’Sullivan —Not really. We rely on the PBAC to make that decision. We just think it should be transparent.

Senator FIERRAVANTI-WELLS —How do you think it should be transparent?

Mr O’Sullivan —The PBAC meeting minutes could be publicised. Maybe the submissions to the PBAC could be made public, as in this committee—all the submissions were made public on a website. I think that would increase confidence in the process for the stakeholders.

Ms Riley —It is even simpler than that. We have no idea how they go through the decision-making process. There are no published guidelines as to how this decision was arrived at.

Senator FIERRAVANTI-WELLS —That is the point that I was trawling through today. In this case the minister made the decision is part of the budget process. There was obviously a six-month period where that decision was kept under wraps. The decision was made. It was announced in the budget context, not in a health context, without any consultation with anybody, it seems, and then we get two paragraphs from the PBAC—Mr Miles from Pfizer showed them to us this morning—and that was it.

Ms Riley —If an outcome of this inquiry is that we get some guidelines and we know how these decisions are arrived at, we have gone a long way.

Senator FIERRAVANTI-WELLS —Of course, comparing and contrasting the volume of material that is required for the listing of a product on the Pharmaceutical Benefits Scheme and all the processes that one has to go through. Earlier it was mentioned that there are 30,000 pages of documentation.

Ms Riley —It is an unenviable task that the PBAC have. It is a very important task, but they are making decisions based on cost effectiveness and the effectiveness and safe use of the drug. I believe that when they listing drugs they are looking at a particular drug and they are looking at it with reference to the other drugs currently on the PBS.

Senator FIERRAVANTI-WELLS —With the population criteria.

Ms Riley —Yes. But this is a completely separate issue. This is about grouping things, lumping things together, because they appear to be the same. That is a different decision. It requires different information and different interrogation of data. If we do not know what they are doing, how do we have total confidence in it?

Senator FIERRAVANTI-WELLS —Particularly in this case, a decision was made because of this process intervening, but otherwise it happens, decisions are made, changes are made and patients’ medication is changed, and then there is a period in the community when the effects of the interchangeability are seen. Potentially down the track, Mrs Bloggs, who has relied on the advice of her doctor and made the decision to change to another drug, suddenly finds herself at risk. How many Mrs Bloggses do we have to wait for to potentially have adverse medical conditions before we do anything? That is my concern.

Mr O’Sullivan —I think that Mrs Bloggs can stay on her medication; she does not have to change. Say, for example, she is on Crestor, she does not have to change to Lipitor. There are mechanisms where, in consultation with her prescriber, she can stay on that particular drug. She does not have to change.

CHAIR —That is if (a) Mrs Bloggs is prepared to pay more or (b) if they got—

Mr O’Sullivan —She only has to pay the therapeutic premium if a sponsor applies for that therapeutic premium and, if she does not want to pay it and she wants to stay on the drug, the doctor can simply apply for an exemption.

Senator FIERRAVANTI-WELLS —I know, but there is also the question of the interchangeability. There is a ratio of three to one. Mr Miles went through that with us this morning. You cannot interchange Lipitor, and we went through that process—

Mr O’Sullivan —But the government pays for an outcome; it does not pay for a drug, and the outcome should cost the same—

Senator FIERRAVANTI-WELLS —I know that.

Mr O’Sullivan —That mechanism is a good way of ensuring that the government pays the same price for the same outcome.

Senator FIERRAVANTI-WELLS —I appreciate that, but at a time the government makes the decision the minister does not know down the track. The minister assumes that there may not be a price differentiation, but the reality is that there could be a price differentiation—

Ms Riley —That is absolutely correct.

Senator FIERRAVANTI-WELLS —and that is really what it gets to. The decision in this case appears to have been made purely in a budgetary context without reference to the potential repercussions in the market that the government’s intervention may have in terms of price, patient reaction and the actual effect on patients of that interchangeability. That is the point that I am trying to make.

Senator RYAN —There is something that I want to clarify, Mr O’Sullivan. When companies apply for TGPs they are usually, if not in almost all cases, in response to a price cut offered to the company by the government as a result of the calculations involved in the TGP process. When you are grouping together different molecules in the therapeutic group process and you find therapeutic group premium is being applied that is usually in response to the price falling within that therapeutic group, is it not?

Mr O’Sullivan —It could be, yes.

Senator RYAN —I do not know of many examples where those TGPs have been applied other than in response to a fall in the price paid for by the government for the outcome. In effect, if a company wishes to maintain its price, a TGP is applied so the patient pays the premium if they need to as a result of a government price cut not as a result of someone saying, ‘I want to put an extra three or four dollars on the product.’ Isn’t that correct?

Mr O’Sullivan —It could be both.

Senator RYAN —But it is usually in response to a calculation that lowers the price within a therapeutic group, is it not?

Ms Riley —Yes.

Senator RYAN —I think that is an important point outlined here, Senator Fierravanti-Wells. With the announcement of these particular therapeutic groups last year we went into a slightly new space. As I understand it, most therapeutic groups now contain at least one off-patent molecule other than the ones announced last year. Is that the case?

Ms Riley —Probably yes.

Senator RYAN —They go back 10 years. We would be looking at substantial patent expiries—

Ms Riley —I cannot think of one that is not—

Mr O’Sullivan —For example, both the statins are on patent at the present.

Senator RYAN —That was announced last year. If we put those to one side—

Ms Riley —The previous ones—

Senator RYAN —Which I believe are R2, RAs. This is slightly different, because we are grouping together with the new high-potency statins two patented medications.

Mr O’Sullivan —Yes.

Senator RYAN —I think that is an important point here, because the other therapeutic groups all contain off-patent medications which, since the introduction of the F1 and F2 formularies, have an element of competition. Even before those two formulas were applied you still had off-patent medications in those therapeutic groups. From a pharmacist’s point of view, Ms Riley—and putting aside the points made by AstraZeneca earlier to use rosuvastatin and atorvastatin—I assume you would not like to see patients coming in and changing from one product to the other every six months.

Ms Riley —No, not at all. It is not good practice. It is not good therapeutic practice at all. And, as has been alluded to, it adds to confusion, it adds to decreasing compliance, it adds to a lot of things. So from a pharmacist’s perspective, yes, unless there was a good therapeutic reason to be changing. Just because one is cheaper than the other is not necessarily the best therapeutic reason to be changing it.

Senator RYAN —I suppose that is one of the nubs of this. What does interchangeability at the patient level mean when the data is all based on population level submissions to the PBAC? Finally, I understand you mentioned in your submission the ability of a medical practitioner to ring up Medicare Australia and get an authority to remove the therapeutic group premium, but not any brand price premium. In your pharmacy, would it be fair to say that most of the authority prescriptions you saw were for listings on the PBS that were authority-required listings, as opposed to authorities to waive a therapeutic group premium?

Ms Riley —Absolutely.

Senator RYAN —There are not many TGP authorities waiving the therapeutic group premium, are there?

Ms Riley —Not many, no. Quite frankly and honestly, if you advocate for the patient and ring the doctor up and suggest that this could be done, it does not usually achieve a positive outcome.

Senator RYAN —I appreciate you cannot speak on behalf of doctors, but you all have some experience working with them. You mentioned earlier there was some confusion amongst medical practitioners about whether they could apply for waivers of premiums, and there is always confusion between therapeutic group premiums and brand priced premiums. Is that because of a lack of information? Is it resistance? Is it because it is a complex process? Is it the time taken? Or is it a combination of those—that we see a resistance from medical practitioners to accessing that particular option?

Ms Riley —I think it is a combination of things. Everybody is busy. Everybody gets lots of mail, and we get lots of mail from Medicare Australia about these kinds of things and the doctors get the same kind of mail. Sometimes it is not easy to understand. So I suspect the complexity of the explanation is sometimes very difficult. It is a combination of things. I do not think it is a lack of willingness, put it that way.

Senator RYAN —Sure.

Senator MOORE —I was interested in the same point, regarding evidence that doctors are confused when prescribing medication, which I found deeply concerning. I know we have been trying over the years to make the pharmacists and the doctors work more closely together so that processing is a cooperative arrangement. I will check later with the PBAC and the department about the kind of information that has gone out, as you have talked about, regarding the various ways that people can work with the system. It is always difficult. Did you get the piece of paper that was handed out about the drug companies?

Dr Tatchell —No.

Ms Riley —We do not have that, no.

Senator MOORE —If a medication is changed because a doctor is concerned that the price could be difficult for his patient, the format of the medication is currently under prescriptions. Could we get something on notice from you regarding the process of working out an arrangement? I know it is difficult.

Ms Riley —Yes, sure.

Senator MOORE —That is a very complex explanation of people having to cut tablets and things—

Mr O’Sullivan —I think in the real world this does not happen. A doctor will read the product information when prescribing either rosuvastatin or atorvastatin. They will not read the public summary document to check that the dose relativity is three to one. That is something used in the WAMTC process to make sure the outcomes we receive—

Senator MOORE —I have been with patients and it has been an ongoing concern of this government and previous governments about security of medication and about working with people who are taking complex medications. The aspect of having two prescriptions and having to cut up tablets and things like that—

Mr O’Sullivan —I have never dispensed a prescription like that.

Senator MOORE —is that something from the Pharmacy Guild’s perspective?

—No.

Ms Riley —No, I have never dispensed a prescription for taking half an atorvastatin tablet, quite frankly.

Senator MOORE —You could, though?

Ms Riley —I do not know if you are familiar with what the tablets look like, but the reality is that—

Senator MOORE —No, we did not get to see the samples. That was really upsetting!

Ms Riley —Well I am pleased to know you do not need to take them. The reality is that they are an oval shaped tablet without a score in the middle.

Senator MOORE —So you could not cut them?

Ms Riley —They would not be cut very practically and not very safely, I would expect.

Mr O’Sullivan —Ringing up and getting an authority to waive the TGP would be a lot easier, believe me.

Ms Riley —It would be a lot more sensible.

Mr O’Sullivan —That is what the doctor would do.

Senator MOORE —It gets back to the doctors’ understanding that they can do that and knowing how to do it.

Mr O’Sullivan —The doctors can receive a statement and, until it is done, they can keep their patient on the medicine they decide is best for that particular patient. If the patient does not want to pay the TGP, they can be waived.

Senator MOORE —Certainly, so much of the discussion has been on cost. For a situation like this, because we are using it as a case study, within the proposed therapeutic group—and my understanding is that this particular therapeutic group has not started yet—

Ms Riley —No.

Senator MOORE —No-one has actually said that on record. If this group came in and it was there, could you give us some idea of the difference in cost? We have been talking about—

Ms Riley —Whose cost—the patient’s cost or the cost for the government?

Senator MOORE —The patient’s cost. We have been talking so much about the impact on the patient, understandably, to ensure that people do not have undue costs in their budget. Regarding the range of medication and the impact of the cost, I am trying to quantify—

Mr O’Sullivan —Unless there is a TGP applied by a sponsor, the patient will pay $5.40 if they are on a concession.

Senator MOORE —And it could go upwards if—

Mr O’Sullivan —If a TGP is applied, which they do not have to pay if they do not want to.

CHAIR —Is there likely to be a TGP applied?

Ms Riley —That is the sponsor’s decision. We do not know at this stage of the game where they are going to go with that.

CHAIR —In this case, is it usual is that a TGP is applied?

Mr O’Sullivan —In the Department of Health and Ageing submission, it says it is vary rare.

Senator MOORE —I will ask them about that as well. In the therapeutic groups that are in place now—the ones prior to the bunch that were proposed last year—have these issues come up?

Mr O’Sullivan —In my experience they have never been a big problem.

Senator MOORE —From the point of view of giving out the medication?

Mr O’Sullivan —Of patient access.

Senator MOORE —Of course, you cannot speak for everybody, but in terms of the kinds of concerns we have heard raised about this impact of cost, the experience you have had with the previous groups, allowing that they are different medications and all those things, what could happen has not been to the monumental level that we have been hearing about.

Ms Riley —No. Given that the previous groups are significantly genericised now, there are opportunities as well. You cannot get away from the fact that cost is an issue for consumers. These are all medicines for chronic conditions. People are not just taking one; they are taking loads of other medicines for loads of other conditions. It is just adding up the bill. That is the problem. If one tablet needs to go to two tablets, it means two prescriptions a month, and that is twice the cost. That is perfectly obvious. From the patient’s perspective, if the doctor, for whatever reason, changes the medicine and they already have a packet of those tablets, what does the patient do? Do they continue taking that packet until it is finished, which is probably what happens, and then start their new medicines, or do they stop in the middle, or do they take both? They are the things that really concern me as a practising pharmacist. We have to get those messages across to patients. You have to think about cost, but you have to really hone in on the fact that you must take the right medicine—the one that the doctor wants you to take and the one that you have agreed with the doctor that you will take. The big concerns are about chopping and changing medicines. There is an opportunity for people to either double up or take the wrong one for a period of time. That is a big problem.

Senator MOORE —In terms of safety of medication.

Mr O’Sullivan —There is the safety net scheme, which has a limit to the amount of co-payments the patient has to pay.

CHAIR —I have one clarification. You said at the beginning that you do not oppose TGs; it is the process and making sure that the health outcomes are achieved and that it is transparent.

Ms Riley —Absolutely.

CHAIR —I just wanted to get that clear. It seems that significant work needs to be done on the process.

Ms Riley —The intent of the policy is good, but the reality is we are not sure what goes on underneath that. That is where we have our concerns.

CHAIR —You referred to the previous group of TGs being genericised—

Senator MOORE —Another new verb!

CHAIR —Yes. The groups that are proposed now have not gone through because they were disallowed, but what is the degree of genericisation? That is another new word!

Ms Riley —We need a new dictionary today!

Mr O’Sullivan —We would have to take that on notice.

CHAIR —That would be appreciated if you could take it on notice. But it is not just the point of swapping a generic, it is the interchangeability of it across different medicines.

Ms Riley —We have got two problems. There is the generic issue and then you have got the interchangeability issue from medicine A to medicine B.

CHAIR —Thank you very much for your time. It is appreciated.

[11.30 am]