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Community Affairs Legislation Committee
17/10/2012
Estimates
HEALTH AND AGEING PORTFOLIO
Therapeutic Goods Administration

Therapeutic Goods Administration

[10:31]

CHAIR: Welcome, Dr Skerritt. I believe this is your first Senate estimates hearing in this agency?

Dr Skerritt : It is, in this position.

CHAIR: So, welcome.

Senator RYAN: Dr Skerritt, could I turn to the coverage in this morning's media of the recall of the Infanrix vaccine. I just want to clarify a few things and get them on the public record. This recall was conducted by GSK Australia. Could you take me through a brief time line of the events with the TGA's contact with GSK about this issue.

Dr Skerritt : I will ask our acting Principal Medical Adviser, Dr Tony Gill, who has been managing that case.

Dr Gill : We were, as mentioned in fact in the article this morning, on 8 October told by GSK about the issue, and then we worked through with GSK the issues around the recall and what issues there might be for those who had already been vaccinated. Certainly all the evidence that GSK had from their databases of adverse events, and from the information we had and the fact that the batches in Australia had actually had quality testing for sterility, brought up that in fact there was not a safety issue with this product but, because the global company was issuing a worldwide recall for any remaining stock, there was really no reason not to have a recall in Australia for the similar stock that was left.

Senator RYAN: So, to put it in laypersons' terms, this could be described as a precautionary recall which has found no fault in the actual product, but it has not lived up to the quality standards of the manufacturing process because of something found in the vicinity of where it is made?

Dr Gill : The company had concerns about what it had found in its own monitoring and quality assurance, and that is why they believed that they needed to take the actions they did, for a precautionary recall, because they, as mentioned before, had not actually identified it, nor had anyone else.

Senator RYAN: So it has never been identified as being in the product?

Dr Gill : Correct.

Senator RYAN: Do you have access to global data? Do the companies provide you with data? Have there been no recorded adverse events in Australia or globally, outside the norm that I know can happen with vaccines?

Dr Gill : The company has provided us with the outcomes of them looking at their global database, and there was not a change in adverse events which could be related to a potential for that.

Senator RYAN: And you are confident that there is no safety issue with this product?

Dr Gill : Certainly at the current time we have no evidence to say—

Senator RYAN: Just a couple of technical questions. I am somewhat familiar with vaccines, but not necessarily medically or scientifically trained. If this bacteria was in a product and it was injected, as opposed to being ingested, then presumably, if there was not a quicker reaction, parents would feel no need to be concerned because one might expect a reaction more quickly than months after its use?

Dr Gill : I think the issue would be that if it was there then there would be a local infection at the site, because that is where it would be, and, again, that would have been recognised as an issue over the months—

Senator RYAN: So, for parents who have had their children vaccinated with this product many, many months ago, there is no need to be at all concerned, because they would have had a reaction more quickly?

Dr Gill : No concern.

Senator RYAN: No concern at all? Okay. Thank you. I just wanted to get that on the public record, given this article this morning. The only thing I would say is: in the newspaper article on it there was a description around diarrhoea and vomiting, as to what this bacteria could cause. I did have a call from someone this morning who pointed out that that is the same advice they get from their doctor around the rotavirus vaccine. This person rang up and said, 'Is there something here?' I know there was no difference, but—

Dr Gill : The issue here is: if you were to actually ingest it, those are the symptoms you would get from that.

Senator RYAN: I agree.

Dr Skerritt : This is a common bacteria in soil, and if people eat it they get diarrhoea and vomiting. Diarrhoea and vomiting can sometimes be effects of vaccination with any vaccine, but we have not seen any spike in reports after these batches of vaccine, and, as Dr Gill said, we do not have evidence that the vaccine is contaminated.

Senator RYAN: Your media team made sure it was reported in a very responsible fashion. Well done.

Dr Skerritt : Thank you.

Ms Halton : The media team will be pleased to hear that, Senator.

Senator DI NATALE: I have a few questions. The first one is around the issue of Aspen pharmaceuticals and the drug dextropropoxyphene, which is an analgesic. I have been interested in this. I just want to be clear that I have the sequence of events correct. The TGA determined that, as to dextropropoxyphene, there were issues around safety and efficacy.

Dr Skerritt : There were reports concerning safety and efficacy, and our internal advisory committee reviewed that. Their advice to TGA was that the balance did not favour continued registration of the drug.

Senator DI NATALE: Yes. So the internal advice was that this was a drug that should no longer be registered for use, on the grounds of safety and efficacy. The next step was that the manufacturer, Aspen pharmaceuticals, appealed to the Administrative Appeals Tribunal.

Dr Skerritt : Correct.

Senator DI NATALE: The Administrative Appeals Tribunal essentially upheld the appeal.

Dr Skerritt : They actually granted a stay on implementation of the decision. So they did not turn over or uphold our side of it, and they asked the parties to go back—this is on 20 June—and see if we could look at the evidence again. So we had an independent senior clinician look at the evidence again and talk with our committees again to see if we could work out common ground with the company, with the sponsor.

Senator DI NATALE: So what advice went to the Administrative Appeals Tribunal? What sort of medical input goes into that decision?

Dr Skerritt : The company, or the sponsor, in this case, can seek witnesses, and so a range of witnesses, some of whom have medical qualifications, do appear in front of a tribunal, and they make the case for whatever case the company wants to make, and they sit and reflect on that advice. But in this case they did not reach a position. They stayed the decision.

Senator DI NATALE: And the current state of play is that the drug is still available?

Dr Skerritt : It is still available, until that decision is made by the AAT. So TGA formally reconsidered their decision on it over 12 September. We affirmed our original decision to cancel Di-gesic and Doloxene from the ARTG, but what it means now is that proceedings will resume at a date to be fixed by the AAT.

Senator DI NATALE: So, in simple terms: there is a drug available; it is registered in Australia; there are concerns about safety and efficacy; the TGA say, 'We don't want to register this drug because of those concerns;' the manufacturer appeals to the AAT and the AAT say, 'You sort it out, but the drug can continue to be sold'?

Dr Skerritt : It is the situation that, until a final determination is made, it is part of a merits review process, but it is the status quo.

This is a drug that was on the register. It was grandfathered onto the register. The drug has been around for many decades, as you will be aware. It remains on the register until a final ruling is made by the AAT.

Senator DI NATALE: Has this happened before? Is there a precedent for this?

Dr Skerritt : There are some other matters in front of the AAT, but we are not aware of a situation in which a drug has been through this many cycles, at least in recent times.

Senator DI NATALE: I have some serious concerns here that the authority that is charged with determining whether a drug is safe and should be registered makes a decision, that the manufacturer of the drug can actually seek to circumvent that decision through a body that does not have the medical expertise that exists within the TGA and that that drug can continue to be sold until another hearing is held. Do you share those concerns?

Dr Skerritt : This is the current approach of the policy towards our decision making. Any decision we make can be initially appealed under section 60 of our act—well, not any decision, but any decision about registration. If there is still disagreement or if there is a decision about proposed de-registration—removal from the ARTG—the sponsor has the ability to go to a merits review. That is the system we are in at the moment.

Senator DI NATALE: How much work is involved for the TGA in terms of prosecuting this case? Can you put a dollar value on the resources it has consumed?

Dr Skerritt : Because our legal people do a range of things at once, I would have to take on notice how much TGA would have spent on prosecuting this particular case, including the costs of counsel.

Senator DI NATALE: Are you aware of any other manufacturers that are pursuing a similar course of action?

Dr Skerritt : We do not have any similar cases immediately in front of us. We have some other cases that are before or in the pipeline of AAT, but they are obviously going through those processes and are not fully in the public domain yet.

Senator DI NATALE: I will not pursue you on those, but I will watch them with interest. I think it is a very worrying development, and I will be watching it very, very closely. Taking things in a very different direction, my next question relates to the issue of antimicrobial resistance—in particular, the work that was done through the Expert Technical Advisory Committee on Antibiotic Resistance more than a decade ago. There was a very comprehensive suite of recommendations, some of which were targeted at the TGA—specifically, recommendation 9, which says that microbial resistance safety data should be included, including the propensity for promoting resistance and cross-resistance as a basic requirement of the assessment of all new antibiotics by the TGA. It also recommended the implementation of a definition by a recognised authority of the threshold rates of resistance to human antibiotics and the circumstances in which usage should be investigated and mitigation procedures implemented. The final part of that recommendation was the inclusion of national human antibiotic resistance prevalence data in the product information, with a regular update every five years. What sort of work has been done by the TGA to advance those recommendations?

Ms Halton : Perhaps I could put this in a bit of context. Given Senator Moore's suggestion that the chief medical officer needs waking up occasionally, he can chip in here too! The whole question of antibiotic resistance is actually being dealt with in a number of places in the broad context. I am happy for the TGA to answer in the narrow context of their particular piece. The things you are reading from come from some time ago. But, as I hope you would be aware, everything from the National Prescribing Service and most particularly the safety and quality commission and the work that has been done there on this has moved on—our work and our thinking have moved on quite significantly. In fact, the professor has done a significant amount of work on this, including in a global context. So, just to give it context, before I ask Dr Skerritt, I might ask Professor Baggoley to give you just a short burst.

Prof. Baggoley : The key focus at the moment in relation to the whole issue of microbial resistance is through a committee that has been endorsed now as part of the broader AHMAC committee and subcommittee system and the Antimicrobial Resistance Standing Committee, which is chaired by the manager of the Healthcare Association Infection Program, Marilyn Cruickshank. The purpose of this body is the development of a national strategy centre to minimise antimicrobial resistance, including supporting an integrative approach to the national strategy through coordination of national activities.

I think it is important—and I will cease after this—to indicate that the membership of this committee brings together the sorts of people who are really most important to develop such a strategy. This is not only the Australian Commission on Safety and Quality in Healthcare but also the National Health and Medical Research Council, the National Prescribing Service, the Australasian Society for Infectious Disease, the Australian Society for Antimicrobials, the Australasian Society for Infectious Diseases, the Australasian College for Infection Prevention and Control, Communicable Diseases Network Australia, the Public Health Laboratory Network, the TGA, the Pharmaceutical Benefits Advisory Committee, the Department of Health and Ageing and the Australian Pesticides and Veterinary Medicines Authority as well as the Department of Agriculture, Fisheries and Forestry through the Chief Veterinary Officer.

This committee is a standing committee, the Australian Health Protection Principal Committee, which I chair and which reports straight to AHMAC. It is bringing together an understanding of the range of committees and work and activity that has been undertaken in the last decade. Work is well underway now for the development of this national strategy and the sorts of issues you raise there would need to be incorporated. One of the issues is the coordination of national activities. There are a lot of activities that are not well coordinated. That is the key role of this committee.

The only other point I would make, and this is one of the issues that is so important about antimicrobial resistance, is that there are not many new antibiotics being made and that is our major concern. One major reason for that is, when new antibiotics are made, resistance is developing now much more quickly than it would have two decades ago or longer.

Ms Halton : Now Dr Skerritt can go to some specifics.

Dr Skerritt : I do not have all that much to add to Professor Baggoley's comments and, as the professor mentioned, there are sadly very few new antibiotics that come through—there are more antifungals and antivirals. That is a global trend. With every new chemical entity, every new medicine, we require the development of a risk management plan. In the risk management plan for antibacterials we specifically do have, among other issues of risk, a focus on appropriate use and potential for resistance development. We also use the advice of both the Advisory Committee on Prescription Medicines and, specifically, the Advisory Committee on the Safety of Medicines when we have new antimicrobials come through. It is an integral part of our assessment, although you will appreciate that it is at arm's length to the direct efficacy of the new medicine. But it is firmly built into the risk management plan.

Senator DI NATALE: Thank you. I am very aware of the new committee, I am pleased it has been established and I look forward to the report. I am also aware that over a decade ago we had the establishment of a committee with similar expertise. It came up with a very comprehensive suite of recommendations. Many of them were ignored. The concern I have is the concern that you have already expressed, Professor Baggoley, in that there seems to be a complete lack of coordination in this area. There have been a number of recommendations made to individual departments and areas within departments but no process for ensuring that what was recommended over a decade ago has actually been followed through.

My concern applies to the current committee: what will come of that, and how we ensure that any of the recommendations made through their work are implemented. I am happy for you to take this on notice, but I would like a very clear response to what the TGA has done to implement recommendation No. 9 in the JETACAR report—I have read those out and I will not read them again—and I would like you to tell me in detail about a response to each of those individual points outlined in recommendation No. 9.

Dr Skerritt : We will take that on notice.

Senator DI NATALE: Thank you.

Ms Halton : Senator, the thing I would say to you—because it does goes to the context and you asked about coordination—is that, with the formalisation under its own separate legislation of the safety and quality commission, the whole point about the reform structure is to give us a series of institutions whose responsibilities a number of these things are to make sure that they are coordinated and that there is a very clear focus point on what happens with them. That is why the safety and quality commission has been charged with this. I accept your point—and we will come back to you on notice in relation to these things—but I think we have now got a clearer way to manage them.

Senator DI NATALE: I will respond to that. So part of the problem is that a large part of this area was outside of health. It lies within the Department of Agriculture, Fisheries and Forestry, so it is not just a health issue. This goes much more broadly; it is about the role the APVMA plays. This runs across a number of departments, so we need to get a coordinated whole-of-government approach. I appreciate the commission's role but it does lie outside their mandate as well.

Ms Halton : We agree with that. One of the things we are trying to do is make sure there is a higher level of coordination across the portfolios. I constantly get asked about the use of antibiotics in agriculture, for example. And people's lack of understanding about the current frameworks is something quickly we clearly have to do something about. So we are very aware of that issue.

Senator DI NATALE: I will finish off with a question on registries—in particular, the National Joint Replacement Registry. Has there been any work done to look at the development of registers across other high-risk implantable devices? I am thinking specifically about cardiac devices.

Ms Halton : Yes, there has. This is a policy question and therefore it is for the TGA. But I can tell you that, for some time, we have been doing a series of pieces of work about registers. The safety and quality commission itself did some work on registries. When was that?

Prof. Baggoley : It was in 2008-09.

Ms Halton : That is something we are talking to government about. The National Joint Replacement Registry took a little while to kick off, but it is now incredibly useful. I think we all understand the merits of registries. Based on some of the work done by the safety and quality commission, and then obviously with our experience in a number of areas, we are actively looking at this.

Senator DI NATALE: Can I get a sense of where it is going.

Ms Halton : Because it is a policy process running inside government, you are asking me to predict the future, which I cannot do.

Senator DI NATALE: I was just going to ask you about the work you are doing.

Ms Halton : What I can tell you is that we have been looking at the types of registries, how you might finance them and what things might be covered under those registries. So we are doing all the proper policy due diligence you would expect in relation to that issue. What will our approach be? Ultimately I cannot predict it, but I can tell you that that work is getting a lot of senior attention.

Senator XENOPHON: Reports in the Australian on 11 October indicated that 429 PIP implants had ruptured between January and September this year. That compares to a reported 37 at the start of the year, and that goes for a significant period before that time. Can the TGA indicate what data it has collected in relation to these ruptures and what steps it is currently taken to revise its advice based on this increase?

Dr Skerritt : The apparent change in the number of reports is due to just that—the reporting. When the regular reporting on our website was established—it is now updated on a monthly basis; and earlier this year it was updated on a weekly basis—there was clearly a flurry of reports. Remember also that, with the decision by government to provide MBS reimbursement for MRI scans, specifically of PIP, we were encouraging people to report specifically on PIP. Over the last few months the rate has actually increased. This information is all available on our website; we have the historical records there for 2012. Over the last few months the number has gone up by between 15 and 20—that is, by two, three or four a month. For example, in the last four weeks we have only had an increase in three reports. The current number sits at 432.

But there was a big flurry of reports when we worked closely with the surgical colleges to report; it shot up to a couple of hundred reports. And then when the rebate came in—in March, I think—there was a another bump—

Ms Halton : Which we were expecting.

Dr Skerritt : Yes, we had predicted and encouraged that—I will not say 'encouraged'; we encourage reporting—but in the last three or four months it has been a trickle.

Senator XENOPHON: My understanding is that the most recent information published on the TGA website is from 14 September. Maybe it was my fault but I found that the link to the information appears to be broken. Can the TGA provide details on that information? Is that just a technical glitch?

Dr Skerritt : The link was not broken when I double-checked it yesterday. We were migrating our portal provider—

Senator XENOPHON: Okay.

Dr Skerritt : I would add that the report for October is due up either today or tomorrow and the answer is that there were another three during the last four weeks.

Senator XENOPHON: I want to go to the issue of urogynecologic surgical mesh. On Monday the ABC's 7.30 program aired a story raising concerns about this. The FDA in the US raised significant concerns about the use of this product in 2008 and issued a warning about it in 2011. At the time, the TGA stated in media reports that it was 'urgently raising with the Royal Australian and New Zealand College of Obstetricians and Gynaecologists'. That was 18 months ago. What information has been received by the college? Has it been released and when was it released?

Dr Skerritt : We certainly did urgently raise the issue with the two colleges—the Urogynaecological Society and the College of Obstetricians and Gynaecologists. This is because with all devices, but particularly with devices such as mesh, complications or adverse effects are inherent to the device itself and also to the surgical technique.

Senator XENOPHON: That is the sort of reason that was given in response to the 7.30 program. I saw your response to the program. That has an echo of what was said about the ASR hip replacements: that was the initial response of the TGA and then we found that there was an actual defect in the device.

Dr Skerritt : Your question was about what the colleges are doing. The colleges have released a more recent statement on their websites, and Dr Gill can flesh out the context of that. They also started in April a prospective record—I will not call it a fully fledged registry—of the procedures and the people receiving those meshes. Perhaps I can turn to my colleague—

Senator XENOPHON: My understanding is that 18 months ago the TGA said it was urgently raising the issue with the colleges. What information was gathered, when was it released publicly and what action was taken?

Dr Gill : Certainly the TGA has been in continuous communication back and forth with the colleges. The college and the Urogynaecological Society have continued to put out information. They have a policy. In fact only in the last two months there was an article in one of their own journals, written by one of the urogynaecologists, around transvaginal meshes. I will quote from it:

The incidence of complications when using artificial mesh in prolapse surgery is likely to be related to surgical expertise, training and work volume as well as the adequacy of the patient-selection process. The most important fact remains that surgeons who use mesh infrequently in improperly selected cases will get higher rates of complications. This is what the evidence tells us.

So I think the issue—

Senator XENOPHON: That is a little different from what the FDA has said about it, though.

Dr Gill : My understanding is that the FDA had a general comment about risks and benefits. They have not actually removed any of the mesh or taken any regulatory action against the mesh. Our advice from the specialists using it is that it does not appear that the mesh itself has an issue—it is not like it is actually breaking. Other issues around its use are the more predominant effects—

Senator XENOPHON: Going back to the original question: have those responses been collated, distilled and published on the TGA website?

Dr Gill : There is actually a statement on our website that brings that in and also those responses that went to the 7.30 program.

Senator XENOPHON: When did that finally get on the website—only recently?

Dr Gill : Yes, only recently.

Senator XENOPHON: So you raised urgent concerns for 18 months and it has only been in the last few days that there has been some information on the TGA website—is that correct?

Dr Gill : It is correct because in fact the issue has been just sitting around and being looked at and observed and there has not been anything raised to our attention to actually have to go any further in that process. The reasons for things going up on the website is to put out information on what we know about it when it has become raised. If you put information out there for anything where there was a potential issue, you would scare a lot of people where it is not appropriate. So we need to make sure that we are actually addressing the information to those who require the information.

Senator XENOPHON: Well, let us look at the response you gave on that story on the ABC 7.30 program. You said:

The relevant Clinical Advisory Group (UPCAG) are aware of the concerns around these products and any new sponsors seeking to list mesh products on the PL are being asked to provide published and peer reviewed clinical evidence with at least 12 months of follow up data to support their application.

Was that done in relation to the mesh in question?

Dr Gill : That is a question for the Medical Benefits Division because it is a Prosthetic List for Reimbursement issue. There has been interaction, so they are aware of it.

Senator XENOPHON: But, in terms of seeking reviewed clinical evidence for 12 months for any new mesh products—

Ms Halton : That is for reimbursement. You need to understand the distinction between what government pays for—

Senator XENOPHON: I understand the distinction. But it does cross over, doesn't it, in that you would assume that if there is published and peer reviewed clinical evidence it may also relate to the efficacy and safety of the devices. I think Dr Skerritt is nodding that that is the case—there is a crossover.

Ms Halton : There is crossover but that is not a one-on-one relationship. The truth of the matter is that we have always had more products listed both in terms of pharmaceuticals and devices; it is just that there are more medical procedures undertaken than government chooses to reimburse. As you know, we target our reimbursement very clearly—well, we try—to areas where there is evidence of efficacy and cost-effectiveness. We are better at that in some areas—most particularly, pharmaceuticals—but there is a much wider range of products, including devices, that are available which are used regularly in our community.

Senator XENOPHON: But the fact is that the TGA response to the story on the 7.30 program mentioned published and peer review clinical evidence. I think Dr Skerritt has acknowledged that there is a crossover; it is not a one-on-one relationship, but there is a crossover between the two.

Ms Halton : So long as we are clear that there is not a one-on-one relationship.

Senator XENOPHON: But the fact is that it was mentioned. Did the published and peer reviewed clinical evidence over 12 months apply to the mesh that is now in question? Was there a 12-month published process before it was approved for use—leaving aside issues of reimbursement?

Dr Gill : That is a question for MDB because it is an issue about reimbursement.

Senator XENOPHON: Let us go to the National Joint Replacement Registry. The NJRR has recently released its 2012 report. The executive summary states that one of the most notable findings in the report has been a large increase in revision hip procedures reported to the registry in 2011. The revision procedures represented 11.3 per cent of all hip replacements, particularly in respect of the ASR and the ASR XL. There were 573 revision procedures—that is something like 11 operations per week—reported for this prosthesis. Do you acknowledge that, if there had been earlier action by the TGA, we could well have seen a much lower rate of revision?

Dr Kelly : This goes back to earlier issues that have been discussed through this committee about the timeliness of TGA's actions. I think we maintain the position that Australia was the first jurisdiction to take actions in relation to the ASR hip. The actions that we took I think set a standard around the world for the use of the registries as a way of performing post-market decision-making for regulators.

Senator XENOPHON: Okay, you maintain that, but I think the committee came to a different conclusion. So we can leave it at that. I just want to ask you about the statement from Johnson & Johnson in relation to urogynaecologic mesh. It said that the decision to discontinue these products was based on their commercial viability in light of changing market dynamics and is not related to safety or efficacy. Does the TGA agree with that statement?

Dr Skerritt : We cannot make a comment on the commercial viability of products; they have the figures.

Senator XENOPHON: Yes, but the Therapeutic Goods Administration is the agency that is in a position to comment on the safety and efficacy of products.

Ms Halton : But we are not required to comment, and we will not comment, on a commercial decision made by a commercial party in relation to market dynamics. That is not the role of the TGA, and they will not make a comment on it.

Senator XENOPHON: Does the TGA, the department or the government have a view as to the safety and efficacy of these urogynaecologic meshes? Are they being monitored in terms of adverse outcomes?

Dr Skerritt : They are certainly continually being monitored in terms of adverse outcomes, as are all devices and medicines. We have a process where safety signals for any device are picked up from a range of sources—reports from specialists; reports from patients; international literature; and advice, both confidential and public, from other regulators, including the USFDA. Where there is a particular cluster of signals or a small number of very severe signals then we obviously investigate more fully. We get many hundreds of these signals a month. With the meshes, there is not a particularly strong safety signal at the moment, but we continue to monitor it and talk regularly with the relevant clinical colleges.

Senator XENOPHON: I have a question for either the minister or Ms Halton. In its response to the recommendations from the committee's inquiry into medical devices, the government states that international harmonisation is a critical evidence in medical device regulation—this is in response to recommendation 3, which calls for an increased level of assessment for class 3 medical devices—and this harmonisation allows access for Australian patients to the best devices around the world. Given the increases that have been referred to in relation to the PIP breast implants and urogynaecologic mesh, there is an argument that the TGA has not followed the international advice—the recall of implanted PIP devices in Europe and the warning about the use of urogynaecologic mesh from the FDA. What is the point in relying on international harmonisation if our own regulator does not harmonise with what appear to be international warnings?

Ms Halton : Let us be very clear in relation to PIP. The action taken in Europe was not taken by the regulators in Europe, it was taken by a couple of governments. It was taken based on, we would have to say, an absence of evidence; it was taken politically. If you go back and read the review undertaken, including in the UK, they have congratulated Australia for the stance that it took, which was very clearly founded on evidence, and for not stampeding women into surgery before the evidence was properly considered. So I think it is extremely—

Senator XENOPHON: I am not talking about stampeding women into surgery. I think the government took the appropriate response of allowing for appropriate scans. That is different from suggesting that women have surgery.

Ms Halton : But you took a direct line between action by European regulators in relation to PIP and this. My point to you is that that is not action taken by European regulators, and I think we need to be very clear about that.

Senator XENOPHON: So what action do you say the European regulators took?

Ms Halton : I will get the TGA people to go through this in greater detail. But the specific decisions taken, particularly in France but also in a couple of other places, were not taken by the regulators. I think we need to be very clear—

Senator XENOPHON: What about the FDA warning in relation to the mesh?

Ms Halton : They was a warning; they did not take action. As Dr Skerritt said, we have received 63 adverse event reports in relation to meshes—and that is since 2006. So this is weak, I think, in terms of a signal.

Dr Skerritt : It is not a strong signal.

Ms Halton : It is not a strong signal. Yes, there are undoubtedly adverse events and I have great sympathy for the people affected. The officers have gone through some of the things that have been suggested by the profession in terms of appropriate patient selection and appropriate surgical expertise, and we are watching this very closely. But, in terms of evidence for action, the signal is not strong.

Senator XENOPHON: Okay. I have one final question and the rest will be on notice.

CHAIR: You will have to as we are out of time.

Senator XENOPHON: I have raised issues previously about some companies being involved in overseas bribery and corruption scandals—

Ms Halton : About who being involved in overseas bribery?

Senator XENOPHON: Some companies that provide devices being involved in bribery and corruption scandals, and whether that is a relevant factor for the TGA to consider in terms of their ethical framework. In response to recommendation 18 of the committee's recommendations, the government states that a legislative framework for ethical conduct of industry in the promotion of therapeutic goods to health care professionals is not warranted in the Australian context at this time. Can either the government or the department explain why this is not warranted, because presumably if a company is involved in bribery and corruption activity in other jurisdictions it might point to their ethical framework in the way that they would report, for instance, issues with their own devices?

Ms Halton : It is the government's response to the report. I do not know whether the parliamentary secretary wants to make any comment about it.

Senator XENOPHON: I am happy for it to be taken on notice.

Senator McLucas: I will seek some advice from the minister.

Senator XENOPHON: Thank you.

CHAIR: Senator Fierravanti-Wells, you have some financial questions for the TGA. Can they be put on notice?

Senator FIERRAVANTI-WELLS: I have a threshold question if I may. In relation to the financial questions and the expenses of the TGA, are they for accounting purposes contained within the budget expenses and resources of outcome 1?

Dr Skerritt : Yes, they are. We flagged it because we are separately funded through costs recovery. But we are included in that outcome.

Senator FIERRAVANTI-WELLS: For the purposes of asking the same sort of financial questions, do I need to put them separately to the TGA?

Ms Halton : No, we will do them separately, even though they are under that program. You talked before about subprograms. Effectively this is—

Senator FIERRAVANTI-WELLS: So you will deal with that as part of the subprograms.

Ms Halton : Absolutely.

Senator FIERRAVANTI-WELLS: The financial information in relation to 2011 and 2012 will be included in the table you will produce for me?

Ms Halton : Sure.

Senator FIERRAVANTI-WELLS: Dr Skerritt, in relation to your budget, are you on track? Will you be over or under?

Dr Skerritt : Because we are a cost recovery agency we do the work we get paid for. The difference between us and a standard government department is that we do not work mainly on appropriations. For example, late in the last financial year we had a flurry of applications for registration of new generic drugs and also new innovator drugs. That led to us having a between $4 and $5 million surplus as of June 30, but we have the work to do over the next nine months, so that surplus will be run down as we do the actual work on those medicines. It is always harder for us to predict, because it depends how many companies come forward with new registrations. For example, during the global financial crisis our income actually dropped suddenly as companies held back putting new medicines on the market.

Senator FIERRAVANTI-WELLS: So for 2011-12 you did have an operating surplus?

Dr Skerritt : We did because of the late receipt of funds.

Senator FIERRAVANTI-WELLS: On paper.

Ms Halton : Let's be clear. It is not a surplus, as in unspent funds. It is basically about discharge of monies that are committed. So, they are not uncommitted. These are funds that are paid in respect of nominated specific activity. The activity has as yet to be undertaken or discharged, which is why you might have it sitting in a balance sheet in the trust account. But it is not uncommitted, which means that it is not actually a surplus.

Senator FIERRAVANTI-WELLS: Was there an amount last year?

CHAIR: Is it possible to have these on notice? These are financial things that can be put into the table.

Senator FIERRAVANTI-WELLS: I will put that on notice, but I do have questions in relation to the annual report. So, take that previous question on notice. Turning to page 71 of the annual report, which concerns KPI, percentage of licensing and surveillance and audits completed with target time frames. The figures there are domestic and overseas targets of 100 and 90 respectively, and then actuals of 69 and 60. Can you tell me why the TGA has failed to meet its licensing and surveillance audits within target time frames?

Dr Skerritt : There was a hangover of audits from 2010-11. These audits are not considered complete until every specific issue is closed out. Quite often it takes several months after the audit for the company to respond to TGA's satisfaction. And we have taken the view that obviously the purpose of doing an audit is to make sure these things are done to our satisfaction. So, a number of those—several dozen—have actually moved into the current financial year. That is the main reason why the numbers completed, or closed out, to use auditing language, were lower than anticipated.

Companies request an audit, so it goes on the books. But we also have to negotiate an appropriate time. We have noticed a current trend, especially with companies that need to be audited ahead of the product going on the market, they sometimes come to us a bit too early and they do not have the required information. Again, we do not want to start the audit proper until we are comfortable that there is the full suite of information.

Senator FIERRAVANTI-WELLS: Could you explain the process for licensing and for surveillance audits? Is that a lengthy process?

Dr Skerritt : It is a rather lengthy process.

Senator FIERRAVANTI-WELLS: Could you take that on notice?

Dr Skerritt : We will take it on notice.

Senator FIERRAVANTI-WELLS: Including the types of products that are involved, the actual number of products audited in a given year and the time frames and how long it is now taking. Are you able to give me that?

Dr Skerritt : Yes, we can take all of that on notice. And of course the time frames will depend on the complexity of the audit.

Senator FIERRAVANTI-WELLS: Will you give me the variety of those time frames as well. If there are audits and delays that can affect product sponsors and consumer safety. How do you deal with that?

Dr Skerritt : It depends on the particular type of audit. Clearly, if it is a pre-market audit, the product is not going onto the market until it has passed the GMP audit. So there is not a risk to public safety. If safety signals are raised, then clearly we react immediately. And it is not just through audit processes where a product can be taken off the register, or alternatively where many of the safety issues we talked about before are covered. Audits are only part of our post market process for ensuring the safety and efficacy of therapeutic products.

Senator FIERRAVANTI-WELLS: Will you be taking action to ensure that these targets are met in the future?

Dr Skerritt : We are. For example, we have had many more requests for device auditors. That is a very specialised area, and frankly in the employment market we compete with the private sector for medical device auditors. But we are taking action to recruit an additional four medical device auditors.

Senator FIERRAVANTI-WELLS: I have asked questions in relation to the antifreeze. I know you have had correspondence from people who have made inquiries. Have you had a number of inquiries in relation to the whole issue pertaining to contamination?

Dr Skerritt : We have had some inquiries relating to the audits of that particular company. We have also been working closely with the US FDA on some of the issues. The company has brought in not only a structural change to better address quality issues. There was not a finding of critical human safety issues, but more a lapse in their manufacturing process that led to a very small amount of a chemical called ethylene glycol getting into their materials.

Senator FIERRAVANTI-WELLS: In regard to a product called Intragam, have you had any issues pertaining to contamination in relation to that product.

Dr Skerritt : We would have to take that one on notice.

Senator FIERRAVANTI-WELLS: If you have had issues in relation to any contamination, could you provide to me details in relation to the batch numbers. I note that in your response to a query you received you outlined in that issues about batch numbers being made available.

Dr Skerritt : It is important for hospitals and GPs to know batch numbers.

Senator FIERRAVANTI-WELLS: I will leave my questions in relation to Intragam there.

CHAIR: Thank you to the officers of the TGA. We will now move back to 1.2.

[11:19]

Senator THORP: You would be well aware that there was some media coverage today based on a release from the Australian Federation of AIDS Organisations Inc. in regard to an increase in new HIV diagnoses. How do our numbers on new HIV diagnoses compare internationally?

Ms Morris : I am unable to give you a comparison of new cases internationally because we have not yet seen updated data from other countries. But I can tell you how our rates of prevalence compare with other countries. Yes, there has been an increase in new cases here. But the rate of prevalence for us, based on data from the World Health Organization, is that per 100,000 of population Australia has a HIV prevalence of 115, compared with 400 in France, 100 in both New Zealand and Germany, 300 in Italy, 150 in the UK, 200 in Canada and 456 in the US. So, yes, there has been an increase in the new numbers. Our overall rates probably still look as though we are doing well in terms of overall prevalence.

Senator THORP: But we are not changing our position in comparison—

Ms Morris : It takes a long time for data to flow through to those sorts of international comparisons.

Senator THORP: Are there any particular age groups or other demographic groups where we have seen an improvement?

Ms Morris : Yes. We have seen an improvement in people who inject drugs. There has been a decrease in heterosexual transmission, and we have virtually mother to child transmission of HIV. So, in some subcategories we have been doing well and continue to do well.

Senator THORP: The organisation I mentioned earlier has called for new approaches to HIV education. Could you clarify for me what we are doing now and let me know if there is any intention to change that approach?

Ms Morris : We are actually doing a lot now, which is one reason why our overall prevalence looks as good as it does, and we have been doing this for a long time. I will not pretend to speak with a knowledge of history here, because I am relatively new to the area. But we had a very early and very successful campaign that everyone remembers—

Senator THORP: The grim reaper?

Ms Morris : Yes. For a long time we have worked in very close partnership with the sector itself and with states and territories. We worked together with them throughout the year through regular meetings and we raised issues together and tried to work through them together. We also subsidised the use of antiretrovirals on the pharmaceutical benefits schedule. We subsidised testing. Is there anything I am forgetting.

Dr Firman : There are lots of programs that look at behavioural issues, as well, to target groups that might be at increased risk to change their behavioural strategies so that they reduce their risk of contracting HIV. So there is a number of programs targeting the higher risk groups in the community.

Ms Morris : The minister earlier this year travelled to Washington for an international HIV-AIDS conference. This was before these stats came out showing that there was a rise. So even then the minister was flagging that she wanted the department to look at increasing rates of testing and models for rapid point-of-care testing, adapting models of treatment as prevention, and improving access to antiretroviral treatments. So, we are working on that internally in the department now.

Senator THORP: I would have thought that the states would have a lot of responsibility in making sure that safe sex et cetera is part of early sexual education programs in schools, rather than being a specific HIV program. Are you happy with the level of the education that is going on in our state systems?

Ms Morris : I do not think I can comment on that. But in terms of increased numbers, we will have to re-engage with states and territories. There is a committee called the blood borne virus committee, which is a subcommittee of the Australian Health Protection Committee, which Professor Baggoley chairs, in which we work very closely with the states and territories and the sector. So I think these are issues that we need to re-engage on.

Senator SMITH: My question concerns the media reports today. My understanding is that for about the last five years we have had approximately 1,000 diagnoses of HIV infection and I am just wondering what we might be doing to break below that plateau. Secondly, I am curious to know how realistic it is then that we might actually achieve the 50 per cent reduction in infections by 2015, which is a commitment we have effectively signed up to as a result of the UN political declaration? I would be interested in the comments of the Chief Medical Officer about what may be happening around HIV infection in Australia?

Ms Morris : For us, achieving a reduction is hard simply because we have traditionally had fewer cases. So, for countries where there have not been many years of subsidy of treatment and testing and community education, they are at a different starting point to where we are now. That said, I will not go back over what the minister said in Washington, but she has indicated her concern about whether what we are doing is enough and whether there are additional things that need to be considered.

Senator SMITH: I prefaced my comments by saying that in Australia we have I think had a very successful record, which has been built on the back of bipartisanship. I think it is important to get that on the record. Specifically, in today's media commentary the Australian Federation of AIDS Organisations has called for the introduction of rapid HIV testing—and you have mentioned the minister's comments in Washington—a procedure not yet licensed for use in Australia. Can you step me through the technicalities around the licensing of that?

Ms Morris : This is something that would have been well directed to the TGA. Before any such product can be used in Australia it has to be assessed by the TGA. Whether it is then subsided by government would be an issue for the Medical Services Advisory Committee or, for a drug, for PBAC.

Senator SMITH: So the minister's commitment in Washington is specifically around moving through those regulatory arrangements for the introduction of rapid HIV testing?

Ms Morris : I cannot speak for the minister, and I am not going to presume that I can. But she would be interested in what applications are before the TGA and how they are progressing, and, then, if something is assessed as being able to be used in Australia and whether that is considered for subsidy by the government and in what settings.

Prof. Baggoley : I think you are quite right to point out the plateauing in the number of new cases of HIV diagnosed each year. In fact, for 2011, the cases of 1,137 compares with 1,051 in 2007. So that is an increase of 86 over that four year period, which is an eight per cent increase. The numbers tend to fluctuate, as you are aware.

The point that was raised earlier about state and territory programs is really important. The roles of the public health personnel and the chief health and chief medical officers in each state and territory are really quite critical, because they are required to—and they do it very well—liaise with the various community organisations, who really take a leadership role in minimising the number of cases that are developed and work very closely with their communities. That role is essential, I think. Those efforts must be redoubled. In my capacity as chief medical officer in South Australia we worked very closely with the relevant organisations in that state, because it was those who were close to the people who were at risk who were very effective.

It is interesting to look at the rather mixed picture we see in relation to the diagnoses of blood-borne viruses and sexually transmitted infections. The good news is that over that four-year period, for example, new diagnoses of hepatitis B and hepatitis C dropped, which is good. In fact, the number of syphilis cases has dropped, but we have had a significant increase in chlamydia and gonorrhoea. So, getting the message out, and to the right range of people, particularly for the group of people who may be at risk of getting HIV—because we are focusing on that disease in this segment—requires constant effort.

Senator DI NATALE: I have a few more questions on the worrying increase in HIV incidence. Testing is clearly an important issue, and one of the concerns is that we have potentially around 10,000 undiagnosed cases of HIV in the community, so it is very difficult to reach those people. What specific strategies have we embarked upon to ensure that we increase testing, particularly among at-risk groups?

Ms Morris : I cannot speak in detail to that, other than to repeat what the minister has asked us to look into, because that is then a process of development work by us, consultation with the minister, and consideration by government. I do not think I can provide more detail than that.

Senator DI NATALE: But while today's figures are of concern, there has been some concern within the public health community that HIV incidence has been increasing slowly and that perhaps we are actually returning to a period in which there is great concern. We certainly do not want to reach a tipping point where there is an explosion of transmission. You must have been thinking about how we increase testing prior to today. It must be something that has occupied your mind.

Ms Halton : Yes, you are quite right. It will not surprise you to know that it is not just because key people in the sector have been talking to us about this; in any event, we have been thinking about it. You only have to watch what is going on internationally and know what is going on in terms of products and options. The minister is very concerned about it. We are very aware of it. There is a dialogue going on internally about this. I think what Ms Morris is saying is that she cannot speculate about where we might get to. I will make the observation that one very good thing about this is that there is a lot of discussion going on at the moment about testing. We all know that one of the things we have to do is keep the issue on the agenda—at least talking about it and encouraging people to think about getting tested. I think there are some issues about the advantages in terms of encouraging people with rapid testing. I think we are very aware of those issues. The challenge is what one does about it in a structured and programmatic sense, in addition to the efforts by the sector. I think that is what Ms Morris cannot speculate about, but I can assure you that it is something people are very conscious of.

Senator DI NATALE: I hope it moves beyond a discussion to action; that would be nice.

Ms Halton : Yes, I understand that.

Senator DI NATALE: It would have been nice to have seen perhaps a little more action and less discussion in the preceding period. In relation to the question of rapid testing, I understand the process for approval; it is not your role to approve it. But do you have a role in advocating, for example, for the approval of rapid testing as a prevention measure? Do you in any way feed into that process?

Ms Halton : Sorry, which program are you referring to—TGA?

Senator DI NATALE: I suppose what I am asking is this: if it is clear that rapid testing is one strategy to improve testing rates—and that is clearly your mandate—do you have any way of actually feeding that information into the regulators who make the decision about approving rapid testing?

Ms Halton : No. Let us be very clear: we need to ensure that the regulatory process is managed in an appropriate, professional, evidence based way—all the things we were just talking about with Senator Xenophon. To inject the policy wish list, if you like, I think runs the real risk of actually diverting the activities of the regulator that are very clearly focused on the evidence and the information in front of them. In fact, I am quite careful and clear with the officers that I want the policy process kept separate from the regulatory decisions of the regulator. If you want to think about rapid testing for a second, the context in which you might as a regulator approve rapid testing in one country versus another might be quite different.

Senator DI NATALE: Yes, I appreciate that; absolutely.

Ms Halton : So you understand that context is relevant. In a country with very high prevalence, with long distances that people might walk to medical centres, that is a different view, whereas here there is a first-world health system et cetera. So I want the regulator to do their job properly. This mob will fall all over it if something comes out of the regulatory pipeline, but I do not want them interfering and trying to influence the decisions in the regulatory pipeline.

Senator DI NATALE: Okay, I am happy to accept that. I think there is a role for your agency in providing or at least establishing evidence , but I appreciate the point you have made. It also applies to the notion—and this is the same sort of question, so I suspect you will give me the same answer—of prevention by providing treatment earlier, and prevention by ensuring that the obstacles to post-exposure prophylaxis, for example. They are prevention measures. Do you have any role in providing advice on either of those two initiatives to the minister?

Ms Morris : Yes, and they are consonant with what the minister has been asking us to look at. But, as the Secretary has made clear, anything has to go through the standard health technology assessment processes. There are at particular places and opportunities within that process for the department to provide policy input on it.

Senator DI NATALE: So the minister has asked you specifically to look at providing treatment earlier in the course of the infection and ensuring the post-exposure prophylaxis is—

Ms Morris : The minister has asked us to look at the things I read out earlier.

Senator DI NATALE: Sorry, I missed the statement.

Ms Morris : She announced in Washington increasing rates of testing; examining, in particular, point-of-care testing; adapting models of treatment to prevention; and improving access to antiretroviral treatments.

Senator DI NATALE: When were you instructed to look at those issues?

Ms Morris : July this year.

Senator DI NATALE: Have you provided any evidence to the minister on any of those issues at this stage?

Ms Morris : We are in an ongoing policy development space, with our colleagues within the department who have responsibility for pharmaceutical benefits and medical devices or whatever.

Senator DI NATALE: On a related issue, has there been any specific change in the approach to campaigns around promoting safe sex in young people, given the worrying trend of increasing chlamydia and gonorrhoea rates?

Ms Morris : That could well be, but it is something we would need to discuss with our partners within the blood-borne virus partnership, and also with the minister. One thing I have not mentioned to date, and I might let Ms Jolly talk to it, are our national prevention strategies. We have several, and we are currently reviewing the HIV-AIDS one.

Ms Halton : Yes, that is true. I would just like to underscore that the minister has been interested in the whole question of rapid testing—the things Ms Morris is talking about—which well predate the numbers. The numbers are of concern, let us be very clear. But I do think it is important to understand that we have an interest in this, and the minister has a particular interest in this. She has been pursuing this issue in advance of seeing the numbers. As it happens, that is prescient, and it is a jolly good thing that she is and that we are.

Senator DI NATALE: I did not really ask you about HIV; we had moved on from HIV.

Ms Halton : No, but I just want to underscore that this is not reactive. None of this is reactive, I think is my point.

Ms Jolly : Senator, you referred to differences or questions around testing for chlamydia and other STIs. We have in this area very strong relations with states and territories. States and territories run programs and have protocols in their own jurisdictions. One of the things we find in this area is that there are differences across the country according to some of those practices, and that is something we are looking at as part of our overall strategy—how those practices work and what impact they have on the rates of these conditions.

Senator DI NATALE: I will ask a couple of questions quickly about hepatitis C, and then perhaps I will put the rest on notice. I am particularly interested in the National Hepatitis C Strategy—in particular, the issue around increasing access to clinical care for people with chronic hepatitis C, on page 10 of the document. It includes one specific indicator around the proportion of people with chronic hepatitis C who are dispensed drugs for their infection through the section 100 program. Do we have numbers on how many people have been treated in the past 12 months and whether there has been an increase?

Ms Morris : I would have to take that on notice, and I am not sure that I can even guarantee that I can provide an answer. But I am very happy to take it on notice and see what we can give you.

Senator DI NATALE: Thank you. The Auckland declaration, which was contributed to by a number of stakeholders at the Australasian conference, has a target whereby five per cent of people living with hepatitis C will get antiviral treatment each year. Is that a target that is supported by the government?

Ms Morris : I do not think we have a public position on that. A question on whether the government supports something would be a question for the minister.

Senator DI NATALE: Are any specific measures being undertaken at the moment to ensure that patients with hepatitis C get better access to antiviral treatments?

Ms Morris : I will take that on notice, because I do not feel qualified to give you an unequivocal yes or no.

Senator DI NATALE: Perhaps I will put the rest of my questions on notice. I appreciate the time you have given us. Thanks for the opportunity.

Ms Morris : Thank you for your interest.

Senator SMITH: I have a question going back to the beginning on HIV infections. Are the statistics a surprise? Or was there some sense that there might be some rise?

Ms Jolly : We have a national modifiable diseases system, and we collect data on a real-time basis as it comes in. So, the increase is something that is watched, and you will find it reported in our annual report as part of our suite of indicators. The report that was released today is the more detailed analysis provided by Kirby.

Senator SMITH: It strikes me—and I am happy to take perhaps the advice of the chief medical officer—that we now have a problem with chlamydia and gonorrhoea, some other infections are more manageable, we have not yet been able to break through the plateau of HIV infections. Are we doing enough? Professor, is there a concern amongst your state based colleagues around the sexual health of Australians?

Prof. Baggoley : Thank you for your question. My colleague chief health officers certainly would have concern about the rise in chlamydia and gonorrhoea in particular and what that means for the populations, usually of young people, who are contracting these infections, and what it might mean for their future. This is something we will be talking about at our next health protection principle committee meeting. We keep an eye on this. It will be important to find out what actions they are taking in relation to this. It may partly involve infection education, as well as other measures that might still need to be redoubled. And of course there are the blood-borne virus and sexually transmitted infection committees that deal particularly with this. So, as I indicated earlier, this is a matter of concern and for redoubling of efforts, to do something about this rise.

Senator SMITH: What is the time line for the completion of the review of the national HIV prevention strategy?

Ms Morris : I know we currently have a draft that we are working on together with our partners and we are planning to consult with the blood borne virus subcommittee of AHPPC. There will also be a ministerial advisory council on blood borne viruses before the end of this calendar year. I do not want to give a final time line because a lot will depend on the quality of the draft, what we get back in our consultations and where we have to take it. I had been hoping to get it finished this financial year and I hope I will be able to give you a more detailed answer, Senator, at next estimates on that.

Senator FIERRAVANTI-WELLS: I would like to follow up on an answer to question on notice E12-410. It was the question on the Communicable Disease Prevention and Service Improvement Grants Fund. The answer told us that there were $43 million allocated to that fund, Ms Morris. Is that $43 million in the $54 million or so that is at page 57 of the portfolio budget statement? At the top of page 329 of the document that is in the annual report, do I take it these are the only subprograms in 1.2?

Ms Morris : Sorry, we were finding out who had the PBS. Could you give us the—

Senator FIERRAVANTI-WELLS: There are three parts to this. One is E12-410. It tells us of the total value of the flexible funds for the period 2011-12 to 2014-15. In that, you have told me there is $43 million for the Communicable Disease Prevention and Service Improvement Grants Fund. My question to you is: what is the breakdown of that over the forward estimates and is that $43 million included in the total figure for program 1.2 in the portfolio budget statements at page 57?

Ms Jolly : If you look at page 57 of the PBS, those figures across the annual administrative expenses add up to the $43 million. So your top line there is an equivalent amount to the answer that was provided on notice.

Senator FIERRAVANTI-WELLS: That would be the reflective amount.

Ms Jolly : Yes.

Senator FIERRAVANTI-WELLS: All the programs in 1.2 are set out at page 329.

Ms Jolly : That would be my understanding.

Senator FIERRAVANTI-WELLS: Thank you. In that answer, 10 applicants short listed for the funding. How many received funding agreements?

Ms Morris : My understanding is that everyone receiving funding under that fund has now received funding agreements.

Senator FIERRAVANTI-WELLS: What is the total amount that has been committed from the fund to date?

Ms Morris : I understand it is fully committed. There may be a very small balance there.

Senator FIERRAVANTI-WELLS: Please take on notice the terms of those funding agreements—the length and range of amounts provided. Do you have any indication for the timing of future funding rounds, Ms Morris?

Ms Morris : It is a decision for the government.

[11:50]

CHAIR: We now move to outcome 1.3.

Senator FIERRAVANTI-WELLS: This is the same question I asked Ms Morris, relating to E12-410. There are two amounts there, $86 million and $558 million respectively, at the bottom of the page in relation to the Substance Misuse Prevention and Service Improvement Grants Fund and the Substance Misuse Service Delivery Grants Fund. Do I take it that those two figures are also included or equate to that amount at page 61 of the portfolio budget statement? Is the breakdown of the forward estimates reflected in that figure at page 61 at 1.3?

Mr Smyth : There are two amounts there. One sits with Ms Campion in terms of the service delivery grants. That is hers. The substance misuse funding is reflected in the forward estimates, in my understanding, across a number of years. Yes, $86 million is.

Senator FIERRAVANTI-WELLS: But the point is they are separate subprograms.

Mr Smyth : They are two separate funds and that is projecting them out over the forward estimates.

Senator FIERRAVANTI-WELLS: That is included in there.

Mr Smyth : Yes.

Senator FIERRAVANTI-WELLS: And we can pick up the breakup of that—212, 219, 208; we can divide that up between the two.

Mr Smyth : It is in the PBS on page 61.

Senator FIERRAVANTI-WELLS: There are the 15 and the 70 applicants respectively who had been shortlisted for the funding. How many have received funding agreements?

Mr Smyth : We are still in the process, for some of the 15, of executing those funding agreements but the majority have been completed.

Senator FIERRAVANTI-WELLS: I am asking the question in relation to both 15 and the 70.

Mr Smyth : I will ask Ms Campion to answer that.

Ms Campion : When we did our funding round we actually did a funding round for the fund and the Non Government Organisation Treatment Grants Program because they were covering similar issues. So we just had to try and find our disaggregated numbers. It is correct that, for the fund itself, there were 70 applications that were short-listed. So those numbers are correct.

Senator FIERRAVANTI-WELLS: Yes, I know. That is the answer to the question on notice. Thank you. My question, too, is: how many have actually received funding agreements?

Ms Campion : I beg your pardon. That was the number of applications, not necessarily the number of applicants.

Mr Shevlin : A total of 153 organisations are being funded under both the service delivery grants fund and the NGOTGP program; 147 contracts are actually in place and an additional four are with organisations awaiting sign-off. So we are at 96 per cent completion.

Senator FIERRAVANTI-WELLS: Sorry—did I misunderstand? Your answer says the short-listed applications were 15 and 70 respectively. Oh—they are the applicants as opposed to the number of agreements? So some applicants have more than one agreement?

Ms Campion : No. Mr Shevlin has given you the combined number for the fund and the Non Government Organisation Treatment Grants Program. That is the combined number. So we just need to find the disaggregated number for the number of funding agreements under the fund.

Senator FIERRAVANTI-WELLS: While he is looking at that, can you tell me what is the total that has been committed from the fund to date?

Ms Campion : The expenditure to date under the fund for the funding agreements that have been signed and where payments have been made is $31.8 million.

Senator FIERRAVANTI-WELLS: So about half?

Ms Campion : That is $31.8 million.

Senator FIERRAVANTI-WELLS: Are you doing them together?

Ms Campion : No. This is just for the fund.

Senator FIERRAVANTI-WELLS: Just for the fund?

Ms Campion : $31.8 million has been expended to date this financial year.

Senator FIERRAVANTI-WELLS: We are at cross purposes here. There are two funds, and I am not sure which information you are giving me. There is an improvement grants fund and a delivery grants fund?

Ms Campion : Yes.

Senator FIERRAVANTI-WELLS: One of them has 15 and one of them has 70 short-listed applications?

Ms Campion : Yes.

Senator FIERRAVANTI-WELLS: My question is, in relation to each of them: how many have actually received funding agreements respectively in those two categories? What is the total that has been committed from each of those funds to date? And what are the terms of these funding agreements—length, range and amounts provided? Please take that part of it on notice.

Ms Campion : Sure.

Senator FIERRAVANTI-WELLS: But, as to the previous two, I am just a bit confused as to what your answer actually was.

Ms Campion : I beg your pardon. My understanding of your question—and I misinterpreted it—was: how much we had actually expended to date, not committed. So, for the fund—

Senator FIERRAVANTI-WELLS: As to the $558 million fund, give me the stats on that, and then the 86 one.

Ms Campion : The service delivery grants fund contains a number of components. The information in the answer to that question on notice was only in relation to the funding round that we undertook at the end of last year. As I said, there are a number of components. So the $558 million covers a range of other issues, not just that funding round. It covers a petrol sniffing program, some drug communication activities and also funding for Indigenous drug and alcohol treatment services, which were not part of that funding round. So there are quite a number of different elements to it. It is quite a complex expenditure profile. The funding committed for the fund as a whole for this year is $137.8 million.

Senator FIERRAVANTI-WELLS: Perhaps you could take the other part on notice.

Mr Smyth : I will take that on notice. The 86 is dependent on how long some of our funding agreements are going to be executed for because that is a figure that goes out over four years. I would like to take that on notice to give you what has actually been allocated under the current arrangements, recognising that we have a couple of agreements still to execute.

Senator FIERRAVANTI-WELLS: What is the timing for future funding rounds?

Mr Smyth : Again, it will be a decision of government.

Senator FIERRAVANTI-WELLS: Miss Campion, you said 'committed' and 'spent'. Could you tell me if the figure of $31.8 million is the figure that you actually spent?

Ms Campion : No, that is the committed figure.

Senator FIERRAVANTI-WELLS: What is the amount that has actually been spent?

Ms Campion : To date it is $31.8 million.

Senator FIERRAVANTI-WELLS: Mr Smyth, could you also give me the figure for spending and commitment in yours.

Mr Smyth : Sure, I will take that on notice.

Senator FIERRAVANTI-WELLS: The annual report on page 61 refers to a new quality framework and funding model for drug and alcohol treatment activities. It says 'was not met'; what is the current status of this? How will future rounds be decided without a known framework in place?

Ms Campion : We did have a contract with KPMG to develop the funding model. The reason that the annual report shows the indicator has not been met is that there was a mutual agreement between the department and KPMG to terminate the contract earlier this year. We are in the process of rescoping the project. KPMG did produce a literature review that can be used for us to rescope the project and go back out to the market for another party to complete the project. We still expect that that project will be completed prior to us embarking on any future funding rounds.

Senator FIERRAVANTI-WELLS: Are you saying there will not be any delay?

Ms Campion : No, there will be no delay.

Senator FIERRAVANTI-WELLS: What accounts for the $12 million reduction in funding for program 1.3 between 2012 of 247 and 2013 of 235? That is on page 61 of the PBS.

Mr Smyth : I would have to look over that and try to disaggregate that for you and get back to you on notice. It may be across both of our program expenses he or across divisions and so we would like to give you a specific answer on that.

Ms Krestensen : To add to that in a very general sense, there is a range of ons and offs in our 1.3 funding. The transfer of the binge drinking strategy has reduced the overall allocation under 1.3. I think that period of time would relate to that reduction as well.

Senator FIERRAVANTI-WELLS: Okay, we will take that on notice anyway. Could you tell me what process is in place to assess the effect of plain packaging on smoking prevalence when it commences in December? How will this be reported and when will it be reported?

Mr Smyth : We have initiated a monthly tracking survey with the Cancer Council of Victoria. It is undertaking a pretty systematic survey of existing smoking habits and then the habits of people's purchasing choices et cetera post that as well. That tracking survey commenced in April this year and will run for two years.

We are also obviously looking at future health surveys, national drug strategy household surveys, as well that will give us further data over the coming years. But the key survey we are looking at is the one I just mentioned with Cancer Council Victoria.

CHAIR: We have now finished with outcome 1.3 and will move to Cancer Australia.

Senator FIERRAVANTI-WELLS: In relation to financial year 2010-11, please take on notice your actual expenses and the breakdown of those expenses, or refer me to your annual report.

Dr Zorbas : It is in the Cancer Australia annual report 2010-11, on page 36.

Senator FIERRAVANTI-WELLS: What is your actual expenditure during the period 2011-12?

Dr Zorbas : The actual expenditure is awaiting audit clearance prior to publication in the Cancer Australia annual report, which is imminent—but I am unable to give you the audited—

Senator FIERRAVANTI-WELLS: Are we talking only a short period of time?

Dr Zorbas : Yes.

Senator FIERRAVANTI-WELLS: Is it not too different to what was projected in the budget statement?

Dr Zorbas : There is some additional expenditure based on the section 31 receipts. Other than that, all the appropriation has been expended.

Senator FIERRAVANTI-WELLS: In relation to your funding in 2012-13, are you tracking on target?

Dr Zorbas : Cancer Australia is tracking to deliver on a balanced budget 2012-13.

Senator FIERRAVANTI-WELLS: Are there any changes to the program since 2012?

Dr Zorbas : There have been no changes.

Senator FIERRAVANTI-WELLS: What about variations to staff numbers?

Dr Zorbas : Our PBS projection is for 69 staff this year. We currently have 64 staff and are actively recruiting. We do not predict any change to staffing numbers.

Senator FIERRAVANTI-WELLS: Do your forward estimates remain the same?

Dr Zorbas : Yes they do.

Senator FIERRAVANTI-WELLS: You only have one program.

Dr Zorbas : Yes.

Senator FIERRAVANTI-WELLS: I will put some other questions on notice.

CHAIR: Dr Zorbas, they are the only questions. You may get some on notice but they will particularly focus on the financial process.