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Wednesday, 26 May 1993
Page: 1321


Senator FOREMAN —Is the Minister for Health aware of the drug sumitriptan which is used to treat migraine? Has the drug been recommended for inclusion on the PBS schedule? When can migraine sufferers expect to receive this drug at a sensible price?


Senator RICHARDSON —A number of members of parliament and members of the public have raised this matter with me, which is not hard to understand, given that it is said that about one and a half million Australians suffer from migraine. So I think it is reasonable that people would be concerned.


Senator Kemp —How many with gout?


Senator RICHARDSON —I do not know how many people have gout, but I am among them. If the question were about gout, this might have been a different answer. This is a pretty new drug and its manufacturer is now asking that the Government list the drug on the pharmaceutical benefits scheme. While sumitriptan is certainly better than other treatments currently available for at least half our migraine sufferers, it is not so much better as to justify the extraordinary price that the manufacturer, Glaxo, is asking for it.

  Advice to the Government suggests that to approve this drug would mean adding about $240 million a year to the Government's pharmaceutical bill. Given that the Government spends in total about $1.4 million on other drugs, that is an increase of more than 15 per cent for only one drug. That would be more than we spend as a nation on medical research. It would be more than the total cost of hospital services in southern Sydney. It is an extraordinary amount.

  As good as this drug may be, we all have to ask ourselves whether it is fair for taxpayers to fund that exorbitant price. The manufacturers are asking to charge a price of $41.45 for two tablets. My advice from the medical profession is that many sufferers require three to four tablets an episode—and that makes this a very expensive number.

  I know that the claim is always that the price is set to do two things: to recover development costs—and I think we would have to concede that they are considerable, they probably amount to hundreds of millions of dollars—and also to give some kind of stimulus or incentive to discover new and better drugs in the future. The problem is that our calculations suggest that if Glaxo maintains the price it is asking the Government for—which is pretty similar to the world price it has set for this drug; a price it is trying to get all world governments to cop, particularly those in the OECD—the company will get between $15 and $20 billion a year, every single year. I would say that that is some kind of stimulus. It is not the kind of stimulus that the Government would be prepared to pay.

  While the company, naturally enough, claims that $240 million is grossly overestimating the cost to us, if one looks at the record for drug after drug, one sees that time after time the Government's estimates in this respect have been pretty accurate. If one looks at simvastatin, the cholesterol drug, and cyclosporin, one realises that our estimates have come in very close to cost. Those drugs are the most recent of the new, expensive drugs. I do not think $240 million is going to be far out. It is an awful lot of money. It is something that Australians are going to have to consider.

  In 1991-92, Glaxo received a subsidy of around $90 million from our scheme. We have to ask ourselves as a nation whether we are prepared to pay the exorbitant price that this multinational drug company is asking us for, or whether we stand on some sort of principle and say that perhaps there are better ways to spend a vast sum of money like that.