Access to new drugs and medical technologies
Regulation of therapeutic goods
3.1
The Australian Government regulates ‘therapeutic goods’, which are broadly defined as goods ‘for therapeutic use’. This means use in human beings for:
Preventing, diagnosing, curing or alleviating a disease
Influencing, inhibiting or modifying a physiological process
Testing susceptibility to a disease or ailment
Influencing, controlling or preventing conception
Replacing or modifying parts of the anatomy.
3.2
Therapeutic goods fall into four categories:
Medicines: goods that achieve their intended action by pharmacological, chemical, immunological or metabolic means
Biologicals: goods that contain or are derived from human cells or tissues
Medical devices: devices (including supporting software) used for diagnosis, prevention, monitoring, treatment or alleviation of a disease, injury or disability; investigation, replacement or modification of the anatomy or a physiological process; or control of conception
3.3
Under the Therapeutic Goods Act 1989 (Cth) the responsibility for regulation of such goods technically rests with the Secretary of the Department of Health (the Department), but in practice this responsibility is delegated to the Therapeutic Goods Administration (TGA), which forms part of the Department. The TGA ensures that therapeutic goods are safe and fit for purpose.
3.4
The TGA is required to recover its costs through fees and charges for all activities that fall within the scope of the Therapeutic Goods Act 1989 (Cth) including its public health responsibilities. A small amount of appropriation funding is provided for other activities. For example, in the 2019/20 Mid-Year Economic and Financial Outlook statement, the Government provided $33 million over four years (including $6.6 million in 2020/21) for work on improvement of patient safety through regulatory measures for opioids and to partially defray the costs of the TGA Special Access Scheme, Orphan Drugs Program and mandatory reporting of shortages of critical medicines.
3.5
Unless an exception applies, therapeutic goods must be entered on the Australian Register of Therapeutic Goods (ARTG) before they can be imported, exported, supplied or advertised. There are two categories of medicines:
Higher risk medicines — all prescription medicines, most over-the-counter medicines and some complimentary medicines — are ‘registered’, which involves them being assessed by the TGA for quality, safety and efficacy
Lower risk medicines — medicines containing pre-approved, low risk ingredients for which limited claims of efficacy are made — can simply be listed.
3.6
Biologicals are classified into four classes on the basis of risk to patients. Biologicals in Classes 1 and 4 are listed in Schedule 16 of the Therapeutic Goods Regulations 1990 (Cth), whereas Classes 2 and 3 are defined by method of preparation and intended use. Class 1 biologicals are lowest risk and only require the sponsor to certify that they meet the necessary requirements, while the remaining classes require the submission of a full dossier of evidence which is evaluated by the TGA, including its Advisory Committee on Biologicals if necessary.
3.7
Medical devices are also classified on the basis of risk to patients, with the classes being Class I, Class IIa, Class IIb, Class III and Class AIMD (Active Implantable Medical Devices) from lowest to highest risk. In vitro diagnostic (IVD) medical devices are classified separately, although likewise on the basis of risk, into classes 1, 2, 3, 4. Devices undergo ‘conformity assessment’, which means the sponsor must provide evidence that the device conforms to a set of ‘Essential Principles’. The level of evidence required depends on the classification of the device.
Therapeutic Goods Administration pathways
3.8
The TGA has a number of options, described as ‘pathways’, for sponsors which wish to have their therapeutic good included on the ARTG. These include the following pathways that are described below:
Comparable Overseas Regulator
3.9
Standard review for prescription medicines is an eight phase process designed to prove the quality, safety and efficacy of the medicine. These phases include submission of a full dossier of evidence by the sponsor, two rounds of assessment by the TGA, a request for information or documents from the TGA to the sponsor, and review by one of the TGA’s expert advisory committees. The process is designed to take an average of 330 calendar days in total, or 11 months.
3.10
The parallel process is available for medicines and vaccines that meet certain criteria, and means that they are effectively considered by the TGA for regulatory approval and the Pharmaceutical Benefits Advisory Committee (PBAC) for reimbursement at the same time. Nonetheless the PBAC generally requires a positive indication from the TGA before it considers the application at one of its meetings, and the PBAC’s final decision must accord with the TGA’s.
3.11
An orphan drug designation offers waiver of application fees for the designated drug. It is available for prescription medicines (including vaccines and in vivo diagnostic agents) that meet the following criteria:
The application is for a new orphan indication (specific therapeutic use), if the medicine is already registered, or is for only one indication, if the medicine is unregistered
The indication is the treatment, prevention or diagnosis of a life-threatening or seriously debilitating condition
If the medicine is unregistered, it is not medically plausible that it could treat, prevent or diagnose the condition in any class of patients besides the one included in the application
It is not likely to be financially viable for the sponsor to market the medicine in Australia unless the fees are waived, or, if the medicine is unregistered, the condition affects fewer than five in 10,000 individuals in Australia (for treatment) or is not likely to be supplied to more than five in 10,000 individuals in Australia (for diagnosis or prevention)
The medicine has not been refused registration in Australia, the United Kingdom (UK), Canada, the United States (US) or Europe for safety reasons
There are no therapeutic goods for the treatment, prevention or diagnosis of the condition on the ARTG (unless provisionally registered), or there is substantial evidence that the medicine is significantly safer, more efficacious or better for patient care than the goods that are on the ARTG.
3.12
Priority review offers a faster assessment of certain medicines. It is available for prescription medicines that meet four criteria:
The medicine contains an active ingredient that has not previously been included in an ARTG entry, or does not have the same indications as any medicine on the ARTG
The medicine treats, prevents or diagnoses a life-threatening or seriously debilitating condition
There are no therapeutic goods for the treatment, prevention or diagnosis of the condition on the ARTG (unless provisionally registered), or there is substantial evidence that the medicine is significantly safer or more efficacious than the goods that are on the ARTG
There is substantial evidence that the medicine represents a major therapeutic advance.
3.13
If a priority review designation is granted the TGA aims to complete its assessment within a target timeframe of 150 working days, which is up to three months faster than the standard timeframe. The assessment itself is as thorough as a standard assessment, and the sponsor must provide a full dossier of evidence.
3.14
Priority review is also available for medical devices that meet three criteria:
The device monitors, treats, prevents or diagnoses a life-threatening or seriously debilitating condition
There is no device for that purpose on the ARTG or there is substantial evidence that it represents a significant improvement in safety or performance over devices already on the ARTG
The device is a breakthrough technology and there is evidence that it offers a major clinical advantage over existing technology, or there is evidence that it offers a major clinical advantage over alternatives registered on the ARTG, or if the device is an IVD its early availability will result in a major public health benefit.
If a priority applicant determination is made, the device is granted ‘front-of-queue’ status through TGA processes, meaning it is top priority.
3.15
Provisional approval is available for prescription medicine submissions that meet five criteria:
The submission is for a new medicine or new indication of an already registered medicine
The medicine treats a serious condition
The medicine compares favourably to existing therapeutic goods
The medicine represents a major therapeutic advance
The sponsor provides evidence of a plan to submit comprehensive clinical data on the medicine.
The provisional approval initially lasts for two years, with the possibility of two extensions of two years each. It must then transition to full registration to remain on the ARTG.
3.16
The Comparable Overseas Regulator (COR) report-based process shortens the registration timeframe for prescription medicines (including biologicals) using work already done by a COR. The TGA publishes a set of criteria it uses to determine which regulators are CORs; as of August 2021 these were the regulators of Canada, Japan, Singapore, Switzerland, the UK, the US and the European Union. Two COR processes are available:
COR-A: for certain medicines approved less than one year ago by the COR, the sponsor need only provide the COR assessment reports, the proposed Australian label, product information and, if required, a risk management plan. The TGA’s timeframe is 120 working days
COR-B: for other medicines, including all approved more than one year ago, the sponsor must also provide some additional data. The timeframe is 175 working days.
3.17
Use of CORs is standard for medical devices, with more than 90 per cent of devices approved this way (Class 1 devices, which are the most basic, excepted). Much as in the case of medicines, there are two options: the TGA will either accept the COR’s certification as conformity, or will use the COR’s assessment in conducting its own abridged conformity assessment. The list of CORs is similar to the list for medicines, although there are some differences.
3.18
The Access Consortium is a coalition of international regulators, which the Committee heard was driven by the TGA. Its other members are Canada, Singapore, Switzerland and, since 1 January 2021, the UK. The Consortium has aligned regulatory approaches and technical requirements. New medicines that are submitted to multiple members of the Consortium are evaluated jointly, such as one member evaluating the clinical aspect of the application and another evaluating the manufacturing aspect. This saves time and effort for the regulators, and simplifies applications for sponsor companies.
3.19
Project Orbis is a project of the US Food and Drug Administration (FDA) for new, clinically significant oncology medicines. As well as Australia and the US countries involved include Canada, Singapore, Switzerland and Brazil. The Project aims for medicines to be submitted, reviewed and approved at the same time in the participating countries. In the words of Adjunct Professor John Skerritt, Deputy Secretary, Health Products Regulation, Department of Health,:
…we don't split the work up. We actually independently evaluate it, but, because the US FDA has so many more resources than everyone else, our doctors are able to engage in conversations, say, with the oncologists at the FDA who have been evaluating the drug.
3.20
Nine medicines were approved through the Project between its launch in mid-2019 and September 2020.
Off-label use of therapeutic goods
3.21
When a therapeutic good is entered on the ARTG, one or more indications, meaning specific therapeutic uses, are included in the entry. The good cannot be marketed for any indication that has not been so included. However a prescriber is permitted to issue prescriptions for any indication her or she sees fit, provided he or she has the patient’s informed consent to do so. The use of a therapy for an indication that is not included in its ARTG entry is known as ‘off-label’ use. Such use is particularly common in the treatment of rare and paediatric diseases.
Access to unapproved therapeutic goods
3.22
There are also a number of ways in which patients can access a therapeutic good that is not on the ARTG. These are:
Authorised Prescriber Scheme: this scheme allows authorised medical practitioners to supply unapproved therapeutic goods for a particular medical condition to a particular class of patients
Special Access Scheme (SAS): this scheme allows registered health practitioners to access unapproved therapeutic goods for a single patient. There are three SAS pathways:
Category A: for a seriously ill patient, a prescribing medical practitioner (or a health practitioner on behalf of a prescribing medical practitioner) can supply the good, then notify the TGA
Category B: for a patient who does not meet the Category A definition of ‘seriously ill’, and who requires a good that does not have an ‘established history of use’ under Category C, a health practitioner can apply to the TGA for permission to supply the good, providing a clinical justification
Category C: certain types of health practitioners can supply specified goods that have an established history of use, then notify the TGA
Clinical trials: these are trials to determine the safety and/or efficacy of a therapeutic good
Personal Importation Scheme: subject to certain conditions, an individual may import an unapproved therapeutic good for his or her personal use or that of his or her immediate family, in a quantity not exceeding three months’ supply at any one time
Medicine shortages: special arrangements can be put in place if there is a national shortage of a particular medicine, as indicated by the TGA’s medicine shortage reports database
Reimbursement
3.23
The Australian Government has a number of reimbursement programs through which it provides Australians access to reimbursed or subsidised therapeutic goods/and or services. These reimbursement programs include:
the Pharmaceutical Benefits Scheme (PBS)
Repatriation Pharmaceutical Benefits Scheme (RPBS), and
Life Saving Drugs Program (LSDP).
the National Immunisation Program (NIP)
the Medicare Benefits Schedule (MBS)
National Diabetes Supply Scheme (NDSS)
the national blood arrangements (in partnership with state and territory governments).
the Prostheses List (PL), which stipulates the prostheses that private health insurers must completely cover and the amount of the benefit to be paid.
3.24
The Government determines which therapeutic goods to reimburse through a process known as health technology assessment (HTA). One definition of HTA describes it as:
The systematic evaluation of properties, effects, and/or impacts of health technology. It is a multidisciplinary process to evaluate the social, economic, organisational and ethical issues of a health intervention or health technology. The main purpose of conducting an assessment is to inform policy decision-making.
3.25
Other countries that conduct HTA in some way include England and Wales, Scotland, Canada, Ireland, France, Belgium, the Netherlands, Sweden, Poland, South Korea and the US. The Australian Government has a number of bodies that conduct HTA, which are discussed below.
Pharmaceutical Benefits Advisory Committee
Role and composition
3.26
The PBAC is established by the National Health Act 1953 (Cth). It recommends drugs to the Minister for Health (the Minister) for listing on the PBS and vaccines for inclusion in the NIP. The PBS subsidised 208.5 million prescriptions in 2019-20, highlighting the key role it plays in healthcare. In the 2021-22 Federal Budget, $43 billion was budgeted for the PBS over four years.
3.27
Under the Act, the PBAC must to consist of a Chair and between 11 and 20 other members, including at least one representative from each of the following categories:
Practising community pharmacists
3.28
As of August 2021 the PBAC was at its full complement of 21 members. The Chair, Professor Andrew Wilson (Prof Wilson), is an epidemiologist and the Deputy Chair, Ms Jo Watson, is a consumer advocate. The other members consist of a psychiatrist, an industry nominee, a nephrologist, a geriatrician and clinical pharmacologist, three medical oncologists, an endocrinologist, a rheumatologist, two haematologists, a health economist, clinical epidemiologist and cognitive neurologist, another consumer advocate, two general practitioners, a community pharmacist, a cardiologist and an infectious diseases expert. The Chair and Deputy Chair gave evidence before the Committee for this inquiry.
3.29
The PBAC also has two subcommittees, the Drug Utilisation Subcommittee and the Economics Subcommittee. Each subcommittee is chaired by a PBAC member and includes the Chair and Deputy Chair of the PBAC, but most of the rest of their members are not members of the full PBAC. The Drug Utilisation Subcommittee assesses projected usage and financial cost for drugs submitted for reimbursement, and collects and analyses data on actual usage of listed drugs, including in comparison to overseas. The Economics Subcommittee assesses clinical and economic evaluations of medicines submitted for reimbursement, and provides technical advice to the PBAC.
3.30
The PBAC has also developed a non-statutory body called the ‘Executive’, which consists of the Chair, Deputy Chair and the Chairs of the two subcommittees. Prof Wilson described the purpose of this body as to ‘to try and take some of the stuff that could be dealt with, that doesn't require detailed discussion, out of the committee meetings to be dealt with in the executive.’
Process
3.31
The PBAC Guidelines provide comprehensive guidance to sponsors on how to submit a product for listing on the PBS or inclusion in the NIP. As of September 2021 these had last been updated in September 2016.
3.32
The full PBAC meets three times per year, usually in March, July and October. A calendar for its meetings is published on its website. The process differs for different types of application, but includes opportunities for pre-submission meetings between the sponsor and the PBAC secretariat, publication of the meeting agenda online and opportunity for consumers to comment on that agenda, the subcommittee meetings and opportunities for the sponsor to provide additional information and to comment on the consumer comments and advice of the subcommittees (and the Australian Technical Advisory Group on Vaccines (ATAGI), in the case of vaccine products). Post-meeting, the meeting minutes are provided to the sponsors, there are opportunities for a meeting with the PBAC and Independent Review of PBAC’s decision, and draft Public Summary Documents are provided to the sponsors before being eventually published online.
3.33
There are six categories of submissions for listing on the PBS or NIP. The most complex are Category 1, which involve a first in class medicine or vaccine, a medicine or vaccine for a new population, a drug with a co-dependent technology that requires an integrated co-dependent submission to PBAC and the Medical Services Advisory Committee (MSAC), or a drug or vaccine with a TGA provisional determination. These submissions were the primary focus of this Inquiry, but the other categories range in simplicity all the way up to ‘Applications for a new brand of an existing pharmaceutical item’, which go straight to the Department of Health and have no PBAC involvement.
3.34
Two important submission pathways for the purposes of this inquiry are:
The parallel process with the TGA
The integrated co-dependent submission process.
3.35
The parallel process involves consideration of a medicine or vaccine by the PBAC at the same time as the TGA. As discussed above, the TGA’s decision effectively trumps PBAC’s in the sense that the latter depends on and must accord with the former.
3.36
The integrated co-dependent submission process is available for co-dependent technologies, where one technology must be considered by the PBAC and another by the MSAC. A joint evaluation document is prepared and considered at a joint meeting of the PBAC’s Economic Subcommittee and the MSAC’s Evaluation Subcommittee. The full PBAC meets three weeks before the full MSAC, ‘which gives enough time for the PBAC to raise any questions if needed for MSAC consideration, for the applicant to comment on the questions and for the MSAC to consider its advice.’
Life Saving Drug Expert Panel
Role and composition
3.37
The Life Saving Drug (LSDP) Expert Panel considers applications for medicines to be listed on the LSDP. It advises the Commonwealth Chief Medical Officer on such applications, who t advises the Minister. The LSDP has been in operation for over 20 years.
3.38
Members are appointed by the Minister. As of August 2021, the LSDP Expert Panel was chaired by Professor Andrew Roberts, a researcher and clinical haematologist, and former member of the PBAC. Its five other members consist of two clinical experts, a nephrologist and paediatrician, one of whom is also a member of the PBAC and the MSAC, a health economist, industry nominee and consumer nominee.
Process
3.39
To be eligible for listing on the LSDP a medicine must met the following criteria:
It has been approved by the TGA to treat a disease with a prevalence of 1 in 50,000 people or less (about 500 people or less Australia-wide)
The disease can be identified ‘with reasonable diagnostic precision’ and has been shown to reduce life expectancy
Evidence predicts that use of the medicine will extend the patient’s life
The PBAC has accepted the clinical effectiveness of the medicine but rejected listing it on the PBS for cost effectiveness reasons
There is no other medicine listed on the PBS or available for public hospital inpatients for life-extending treatment of the disease (there can be such a medicine already listed on the LSDP)
There is no suitable and cost-effective non-medicine treatment for the condition (such as surgery or radiotherapy)
The cost of the medicine would be an unreasonable financial burden for the patient or his or her guardian.
3.40
The starting point for a LSDP application is the release of the PBAC minutes, advising that the PBAC accepts the clinical effectiveness of the medicine but has rejected it for cost effectiveness reasons. The sponsor must make the LSDP application within four weeks of the publication of those minutes. The LSDP Expert Panel secretariat then takes two weeks to prepare an overview, and publishes an agenda for the Expert Panel meeting four weeks before that meeting. Interested parties such as patients, families and clinicians can then provide their comments on the agenda prior to the hearing. The Expert Panel meet to consider the medicine and hold a stakeholder forum. Two weeks later the Panel sends its advice and a ‘consumer summary’ to the sponsor. The sponsor has a week to respond.
3.41
Finally, the Chief Medical Officer provides a recommendation to the Minister two to six weeks after the sponsor response, at which point a notification is published online that the recommendation is with the Minister. From the publication of the PBAC minutes to the Minister receiving the recommendation is therefore a total time of 15-19 weeks.
3.42
The Department of Health provided the Committee with a flowchart summarising the LSDP application process.
Jurisdictional Blood Committee
Role and composition
3.43
The Jurisdictional Blood Committee (JBC) ‘is responsible for all jurisdictional issues relating to the national blood supply’. It is chaired by a Deputy Secretary of the Commonwealth Department of Health and has nine other members — one other official from that Department and a representative from each state and territory. The national blood arrangements supply ‘…fresh blood components, plasma-derived and recombinant products and diagnostic reagents (blood-related)’, administered by the National Blood Authority (NBA), a statutory Commonwealth agency. The products funded are those listed on the National Product Price List, which are two thirds funded by the Commonwealth and one third by the states and territories.
Process
3.44
The sponsor can submit a ’National Blood Supply Change Proposal’ to the NBA at any time for a Cycle 1 evaluation, which considers the submission at a high level to determine whether it should be referred to the JBC. There is no timeframe within which it must be evaluated. If more evidence or analysis is required, the product undergoes a Cycle 2 evaluation, which can consider the product’s safety, efficacy or cost effectiveness, according to terms of reference developed by the JBC. If still further analysis is required, the product may then be referred to the MSAC - discussed below - for a full evaluation. The MSAC’s advice is then considered by the JBC. If the JBC agrees to fund the product, the NBA may then run a competitive tender process for its supply.
Medical Services Advisory Committee
Role and composition
3.45
The MSAC is a non-statutory committee appointed by the Minister that was formed in 1998. It recommends medical services to the Minister for public reimbursement, principally through listing on the Medicare Benefits Schedule (MBS).
3.46
The MSAC uses a 24 week process and meets three times a year. It also has two subcommittees:
The ESC (Evaluation Subcommittee) considers the clinical evidence and economic assessment presented in an assessment report in detail, provide advice on the quality, validity and relevance of the assessment, and identify any issues that MSAC will consider, for example, where evidence may be weak
The PICO (Population, Intervention, Comparator and Outcome) Advisory Subcommittee (PASC) is a 22 week pre-assessment process that is non-compulsory and occurs before a submission is put to the MSAC. It captures any current clinical practice and identifies any impacted healthcare resources.
3.47
As of August 2021, the MSAC consisted of 23 members. It is chaired by Professor Robyn Ward, a medical oncologist, and has two Co-Deputy Chairs, Professor Kwun Fung, a thoracic and sleep physician, and Professor Tim Davis, an endocrinologist. Its remaining members consist of two cardiologists, an academic pharmacist, a rheumatologist, two general practitioners, a nephrologist, a general surgeon, a geneticist and genetic pathologist, two consumer representatives, a pathologist, two health economists, a diagnostic radiographer and nuclear medicine technologist turned health economist, a cardiac anaesthetist, a nuclear medicine specialist and a cardiothoracic surgeon.
3.48
It is through MBS services that many medical devices are reimbursed — that is, the cost of a device is included in the cost of a service — but the Medical Technology Association of Australia (MTAA) noted that ‘MBS items frequently incorporate the cost of diagnostic devices but not therapeutic devices’ and that there are a variety of other mechanisms through which devices are funded. One of these mechanisms, the Prostheses List, is discussed further below.
3.49
In addition to performing HTA for the MBS, the MSAC also provides advice in relation to other forms of funding. Instances of this include assessment of blood products for the national blood arrangements, described above, and the assessment of Highly Specialised Therapeutics jointly funded by the Commonwealth, state and territory governments and delivered in public hospitals. The most discussed example of the latter in this inquiry was CAR-T cell therapy.
Process
3.50
The MSAC encourages engagement between the sponsor and its secretariat prior to the making of an application, which can include a meeting. Once an application is received and accepted as suitable to proceed, the MSAC begins targeted and public consultation. If the application is new it will then proceed to the PASC, which involves the formulation with input from the sponsor of a draft PICO Confirmation, typically by a ‘HTA Group’ contracted by the Department. Once ratified by the PASC the PICO Confirmation is published online for further public consultation.
3.51
The sponsor can then develop its own assessment report, or the Department can contract an ‘HTA Group’ to prepare one. If the former option is chosen the Department then contracts an HTA Group to critique the assessment report, with the sponsor being able to see and comment on the critique prior to consideration of the application by the ESC. If the latter option is chosen the sponsor has input into the development of the report, and then can comment on the report prior to consideration of the application by the ESC. The ESC considers the assessment report and prepares the ‘ESC report’, a copy of which is provided to the sponsor. Some resubmitted applications can skip the PASC and ESC stages.
3.52
The full MSAC considers the ESC report, the sponsor’s comments on it, feedback received by MSAC’s consultations and other documents. In certain circumstances the sponsor may request or be requested to present orally at the MSAC meeting. The MSAC itself does not make a final decision on the application, but rather provides advice to the Minister. A Public Summary Document explaining the rationale for its advice is published on its website sometime after the meeting.
3.53
Like the PBAC, the MSAC has detailed guidelines for applicants, which were updated in May 2021.
Prostheses List Advisory Committee
Role and composition
3.54
The Prostheses List Advisory Committee (PLAC) makes recommendations to the Minister on the listing of devices on the PL and related matters. The PL specifies devices private health insurers must cover (given the fulfilment of certain conditions) and the minimum benefit that must be paid. The regulations specify that the device must be surgically implanted. Therefore, external prostheses such as prosthetic limbs are ineligible for listing, as are certain surgically implanted devices such as diagnostic devices and some cosmetic implants.
3.55
The PL is updated at least three times a year. As of August 2021 the current List was contained in Schedule 1 of the Private Health Insurance (Prostheses) Rules (No. 2) 2021 (Cth). Rule 12 of those Rules makes clear that the Minister can take advice from the PLAC, but is not bound to follow it.
3.56
PLAC members are appointed by the Minister. As of August 2021 the PLAC consisted of its Chair, Professor Terry Campbell AM, a cardiologist, a consumer representative, nine expert members being experts in orthopaedic surgery, spinal surgery, epidemiology, cardiology, thoracic medicine, bioengineering, vascular medicine, health economics and a representative of the MSAC, five advisory members being representatives of private hospitals, not-for-profit insurers and the device suppliers, and two invited attendees representing device suppliers and private insurers. Its meetings are also attended by representatives of the Department of Health (including the TGA) and Department of Veterans’ Affairs.
Process
3.57
The PLAC meets at least three times a year. It has Clinician Advisory Groups (CAGs) for cardiac, cardiothoracic , knee, hip, ophthalmic, spinal, specialist orthopaedic and vascular products, each of which includes a patient representative in addition to expert clinicians, which advise it on the clinical effectiveness of the products it considers. It also has a Panel of Clinical Experts, which assesses products outside the categories for which CAGs have been established. Sponsors are able to comment of the assessment by the CAG or Panel, which is then provided to the PLAC for its final decision. Certain complex applications, such as for devices used in services that are not listed on the MBS, are referred to the MSAC.
Ad hoc
3.58
The Committee also heard that occasionally the Government conducts ‘ad hoc’ HTA outside the structures described above, for example for a glucose monitoring system for people with type 1 diabetes in partnership with the supplier.
Participants’ understanding of the current system
3.59
One of the major themes to emerge from the evidence received by the Committee was that many of those who rely upon or interact with Australia’s current regulatory and reimbursement system struggle to understand it.
3.60
Cystic Fibrosis Australia, the Australian Patient Advocacy Alliance and Lymphoma Australia all submitted that clinicians lack knowledge of the TGA and access options for treatments, and that they should receive education on these issues and the broader HTA process. The two former organisations also wanted to see more ‘support, education and updates’ for patients with an interest in a product undergoing HTA.
3.61
The grandfather of a girl with cystic fibrosis stated that ‘very specific information on the development and assessment of new drugs’ is available in the US, but not in Australia, and that patients and carers should be supported and educated through the HTA process. The Patient Voice Initiative likewise suggested that it is difficult for patients to find about what treatments are available and how the system for providing access to new treatments works.
3.62
MS Australia described one of the relevant government websites as ‘impenetrable’ and recommended that the Government:
…provide those directly affected – patients and clinicians – with appropriate, clear, accessible publically available information on HTA processes plus updates and feedback throughout the process.
3.63
On a broader level, XLH Australia suggested that ‘additional support and education for advocacy groups would be beneficial to ensure meaningful consultation and collaboration with policymakers.’
3.64
The Metabolic Dietary Disorders Association (MDDA) drew the Committee’s attention to action 2.4.3.1 of the National Strategic Action Plan for Rare Diseases:
Ensure the HTA Consumer Evidence and Engagement Unit provides education and support to people living with a rare disease and their families and carers, and/or rare disease organisations to support them to take a more active role in HTA processes
3.65
Rare Voices Australia (RVA) commended the new Consumer Evidence and Engagement Unit, which sits within the Department, as ‘a great initiative’, but added that ‘more clarity around [HTA] decision-making is vital’ and that there is still a major problem with lack of transparency in that regard. Concerns about transparency were also raised by a number of submitters from industry, including Specialised Therapeutics Australia for the PBAC and MSAC and Edwards Lifesciences for the MSAC and PLAC.
3.66
A number of patient organisations went so far as to call for direct financial support from the Government for their work in assisting patients to navigate and participate in the system.
3.67
SCN2A Australia stated that ‘funding of rare organisations to offer peer support and education is required so each [organisation] is not reinventing the wheel;’ ausEE Inc recommended that the Government recognise and strengthen the role played by rare disease patient organisations by ‘providing resources and funding opportunities;’ and the CF Pipeline Patient Interest Group proposed ‘investment in capacity building for patient groups’ to enable them to contribute better to HTA processes.
3.68
The Committee heard calls for more education for industry, typically focusing on specific features of the system. The PFIC Network, for example, asked the Government to ‘raise awareness among industry and rare disease organisations as to the availability of the HTA Access Point’. The Centre for Law and Genetics, University of Tasmania and Sydney Health Law and Sydney Health Ethics, University of Sydney called for ‘education of those involved in health technology innovation’ in relation to combination products, which are discussed below. Finally, the MTAA recommended education and training for Australian medical technology companies on the TGA’s recently introduced priority review option for medical devices.
3.69
The clearest evidence that many participants struggle to understand Australia’s regulatory and reimbursement system were the number of submissions and statements in public hearings that proposed changes that the Department has already made. This was highlighted by Adjunct Prof Skerritt of the TGA, who told the Committee in his second appearance:
Actually, if I could be self-critical, it means that we hadn’t reached out enough. We have actually written to all those people, not saying ‘Hey, you’re wrong,’ but saying clearly: ‘We haven’t communicated enough. Here’s some information, and we’re happy to meet. Indeed, some of them have already put appointments in the diary to meet in the coming weeks, which is really good.
Gaps in the current system
Combination products
3.70
A combination product is a product ‘composed of any combination of a device, medicine and biologic.’ A number of terms were used in the evidence to refer to a similar concept, including co-dependent technology, which was described as ‘a medical technology or service that relies on another technology to achieve its intended purpose or enhance its effect. ‘
3.71
One submitter commented that under Australia’s current regulatory scheme ‘combination products are not clearly defined…increased clarity around terminology and regulatory pathways…would be immensely beneficial.’
3.72
Several submitters raised the regulation and reimbursement of combination products as a particular problem for Australia’s current system. The Myeloma and Related Diseases Registry noted that the current ‘drug reimbursement model was adopted prior to the advent of…the concept of multi-agent or combinatorial treatments.’ Medicines Australia explained that use of such combination treatments is increasing and that they are not adequately valued by current HTA processes, but ‘recent attempts to examine and resolve this ongoing concern have made little progress.’
3.73
Johnson & Johnson echoed this view, noting that while the PBS currently includes some combination therapies, which were recommended by the PBAC, there are difficulties in listing many others, including its unsuccessful attempt to list daratumumab as a treatment for multiple myeloma in combination with another medicine. UCB Australia gave the example of a combination therapy it has developed for epilepsy, which combines the off-patent drug alprazolam with ‘an innovative delivery system’, explaining it is concerned that the PBAC will not ‘adequately take into account the cost of the ancillary equipment used to deliver the medication. ‘ It urged that ‘the value of the device’ in a combination therapy should be seen as ‘a critical part of the overall effectiveness of the therapy’.
3.74
Amgen Australia submitted that combination therapies pose two major problems, which it described as:
Value attribution problem: the problem of appropriately attributing value between the multiple sponsors of the components of the combination
Incentive problem: the problem of the listing of a medicine in combination indication lowering the price of existing indications of that medicine, disincentivising combination listings.
3.75
It recommended that the Government ‘develop and implement a transparent framework and guidance on the assessment of high cost combination regimens that will solve the key problems limiting patient access.’
3.76
Neuroendocrine Cancer Australia likewise encouraged the development of a ‘combined governance framework’ for the approval and funding of ‘holistic treatments’. It focused particularly on theranostics, a specific category of combination product which consist of two radioactive substances, one diagnostic and one therapeutic, suggesting that the TGA, PBAC and MSAC must ‘work together’ on the approval of such products.
3.77
Like Amgen Australia, Novartis Australia and New Zealand (Novartis) identified the uncertainty of value determination as a major challenge for reimbursement of combination products, as it deters the sponsor of a therapy that is already listed from cooperating in the combination listing. It proposed three solutions:
‘A framework for attributing value within the combination’
‘A means of facilitating…intercompany agreement’ without breaching the Competition and Consumer Act 2010 (Cth) (that is, anti-cartel law)
‘The ability of companies to have different prices for a therapy within the same indication’.
3.78
Roche Australia stated that ‘there are some methodological issues associated with the HTA for co-dependent technologies that make the process unworkable’, and suggested that this is a particular problem for genomic panel tests, which test for many genetic mutations simultaneously. This is because of the difficulty of assessing the cost effectiveness of such tests, amongst other challenges. It recommended that the Government ‘review how economic evaluations for co-dependent technologies are conducted to ensure they are feasible and identify a pragmatic solution to valuing test costs for rare genetic mutation.’
3.79
The Western Australian Department of Health submitted that ‘for areas of innovation where there is an interface between drugs and novel therapies such as CAR-T therapy, current assessment pathways…may need to be clarified.’ It proposed that this issue be referred to the interjurisdictional working group on HTA elements of the National Health Reform Agreement, or alternatively that there be created ‘an adjunct, or expert advisory committee…to advise on these kinds of therapies into the future.’
3.80
Bayer Australia and New Zealand identified a more concrete challenge for the assessment of many combination products, namely that the MSAC outcome of a submission of a diagnostic combination component is not available in time for the PBAC’s consideration of the therapeutic component, requiring an ‘automatic’ resubmission of the latter. It recommended ‘a revised schedule for co-dependent submissions in which the MSAC advice on the test is finalised before the PBAC meeting.’
3.81
Pathology Technology Australia (PTA) stated that the MSAC is encountering more difficulties than PBAC in assessing companion products, commenting that ‘so much so we now see at least two cases where a companion diagnostics product is up before PBAC for a reimbursement rather than MSAC.’
3.82
In contrast to the submissions just discussed, Omico: the Australian Genomic Cancer Medicine Centre, suggested a very different approach to solving the combination product challenge. It submitted that:
Provision of comprehensive genomic profiling for all Australians with advanced cancers essentially nullifies the majority of co-dependent screening test evaluation, since the population will automatically have access to a test which will identify the subpopulation who will benefit.
Cell and gene therapies
Funding and pathways
3.83
Many submitters were of the view that current funding and approval pathways for cell and gene therapies are inadequate. AusBiotech focused its concerns on how the TGA approaches such therapies, noting that:
The current TGA expedited pathways to registration…are available for prescription medicines (which include gene therapies) but not for biologicals (cell and gene-modified cell therapies).
The classification of biologicals, and drug substance versus drug product when it comes to cell and gene therapies, is not clear across international jurisdictions. The definitions affect the compilation of the Common Technical Document (CTD) for registration of a cell-based therapy.
3.84
AusBiotech recommended the creation of ‘a dedicated pathway for cell and gene therapies’.
3.85
Medicines Australia noted that biologicals are ineligible for the TGA’s priority review and provisional registration, and suggested that this should be changed.
3.86
Better Access Australia noted that ‘different evaluation processes and approaches to decision-making are determined by their funding mechanism and treatment setting.’ It commented that at the time of making its submission Novartis had two different gene therapies navigating the HTA system, one through the PBAC and one through the MSAC. In its submission Novartis stated that it had ‘experienced significant confusion in advice from the Department over the choice of evaluation committee’ for one of the therapies.
3.87
RVA highlighted the ‘lack of clarity and transparency around approval pathways for gene therapy’, citing the consideration of a therapy (apparently the one sponsored by Novartis) by the PBAC, despite it being under the impression from the Department that all such therapies would be evaluated by the MSAC. It explained that it was concerned that the MSAC is ‘likely to have no experience with assessing comparative current therapies, or knowledge of the particular patient cohort.’
3.88
As discussed above PTA also raised concerns about the MSAC’s capacity in assessing ‘personalised medicine and companion diagnostics’.
3.89
Ms Julia Burlison and the Save Our Sons Duchenne Foundation both endorsed a recommendation from a recent report on Duchenne Muscular Dystrophy and Becker Muscular Dystrophy calling for ’clear funding mechanisms for gene therapies’. PTA argued that funding for genomic testing in particular is ‘inadequate and inconsistent’; it added that there is no clear pathway for in vitro diagnostic devices (a category that includes genomic tests).
3.90
The New South Wales Government stated that ‘the diversity of advances in diagnostics, gene and cell therapies and gene editing to date require a simplified and clearly defined approval process’ and ‘the current regulatory pathways… are not sufficiently flexible to address the range of novel agents and methods of manufacture and delivery that may be involved in novel and personalised therapies.’ It recommended ‘implementation of alternative regulatory pathways better suited to the bespoke nature of personalised medicine.’
3.91
Pfizer Australia commented that ‘the breadth and complexity of [gene therapies] will bring challenges to regulatory and reimbursement processes’ and ‘the issue remains that there is currently no defined HTA pathway and no defined reimbursement or funding mechanism for some of these innovative treatments and technologies.’ It recommended that ‘fit-for-purpose…pathways and processes’ be established, ‘including novel funding sources and payment mechanisms where appropriate.’ It also drew attention to the problem that gene therapies often have long term benefits but there may be limited long term data available at the time of assessment, which it recommended solving by allowing patients access to treatment while simultaneously collected longer term real world evidence.
3.92
The mother of a young man with Duchenne Muscular Dystrophy submitted that ‘consideration must be given to the individuality of genetic therapy, that this technology be assessed differently to drug therapy, making the overall journey cheaper’. The Queensland Genomics Community Advisory Group and Duchenne Australia both emphasised the need for Australians to have faster access to gene therapies that become available overseas.
Genomic testing
3.93
Another argument made by many submitters was that there needs to be greater government-funded provision of genomic testing. Many suggested that this should be provided at a national level, which would mean the same tests in all states and territories. Support was particularly strong from patient groups such as the Australian Pompe Association, which submitted that ‘without neonatal testing in Victoria alone, three babies have been lost in the last 14 months to Pompe because the disease was not diagnosed fast enough for treatment to be initiated or was started far too late.’ Other patient groups that advocated for increased testing for their respective conditions included Myeloproliferative Neoplasms Alliance Australia, Spinal Muscular Atrophy Australia (for newborns), MND Australia, the Leukaemia Foundation, Rare Cancers Australia, Rare Ovarian Cancer and the FSHD Global Research Foundation (including prenatal testing).
3.94
MND Australia, Research Australia, the Australasian Society of Clinical Immunology and Allergy (ASCIA) and the FSHD Global Research Foundation all argued that expanded testing itself is insufficient, but must also be accompanied by adequate ‘genetic counselling’.
3.95
Research Australia, MDAA, the Prader-Willi Research Foundation Australia and the Foundation for Angelman Syndrome Therapeutics Australia all endorsed Action 2.4.1.2 of the National Strategic Action Plan for Rare Diseases:
Align with and build on the existing National Health Genomics Policy Framework for the systematic, equitable and timely delivery of genomic services such as genetic testing (diagnostics) and gene therapies (treatments) and genomic counselling to Australians with, suspected of having, or with an increased chance of a rare disease.
3.96
MND Australia and the ASCIA also supported increased provision of genomic counselling in more general terms.
Other issues
3.97
PTA did not mention the National Health Genomics Policy Framework, but submitted that Australia currently has ‘no comprehensive genomics policy’ and needs such a policy to guide ‘the end to end applications of genomics in healthcare, from screening to diagnostics, to therapeutics and monitoring.’ It also commented that Australia’s ‘framework for capture, storage and use of digital genomic data is fragmented across state-based and commercial databases’ and that consideration needs to be given to ‘establishing a secure service for storing and sharing genomic data’ and a ‘clear protocol for data interchange.’
3.98
Roche Australia put forward a proposal for a ‘national genomic service to bring research and clinical practice together within a quality framework and generate the evidence to support applications for repurposing medicines in rare diseases and cancers.’ It proposed that the service would provide testing and treatment (when possible) to patients, collecting ‘structured data’ for research purposes and to support regulatory and reimbursement applications for repurposed treatments. It argued that the service would also educate patients and the health workforce, and suggested it should initially focus on rare diseases and cancer. It noted that the National Health Service (NHS) England established such a service in 2018.
3.99
The Gene Therapy Advisory Steering Group, Sydney Children’s Hospital Network described the ‘Gene Therapy Assessment Tool’ it has developed to ‘provide a framework with which to assess the merits of a gene therapy for clinical testing.’ It urged that an ‘evidence-based and clearly defined set of criteria‘ such as its Tool be adopted for this purpose. It also recommended that more use be made of ‘state-based panels of experts’ such as the Steering Group in the approval processes for gene therapies, and that the Government ‘fund two or three state-based gene therapy trials with adjunct infrastructure to demonstrate a proof of principle approach to approve gene therapy.’
3.100
Medicines Australia submitted that:
…new types of medicines require specific expertise, infrastructure or aligned processes to achieve access. Examples include those in the cell and gene therapy space, where large overseas biotechnology companies without a presence in Australia experience barriers to entering this market, or delay filing registration due to uncertainty or factors related to the small size of the Australian market.
Blood products
3.101
A small number of submitters discussed the position of the national blood arrangements in the current system. Their views summed up by CSL Behring’s statement that ‘the current funding appraisal process for new blood and blood-related products can be characterised as complex, uncertain, and at times repetitive.’
3.102
Sanofi made two recommendations in this regard: introduce approval timelines and increase transparency; and review the current process.
3.103
AusBiotech submitted that access to new blood products is inferior to access to new medicines and medical technologies. It based that claim on the fact that approval of new blood products for reimbursement takes ‘significantly longer’ than for medicines, and the fact that there is no Government commitment to funding new blood products, with funding instead being reliant on there being capacity within the National Blood Agreement budget.
3.104
It made two broad recommendations, which largely aligned with Sanofi’s: introduce statutory timelines, an appraisal cycle, assessment performance measures and parallel registration and reimbursement; and reform the blood products process in keeping with reform in approvals for other therapeutic products.
3.105
The Haemophilia Foundation Australia (HFA) made a comprehensive submission on this topic, supporting retention of the current system (with significant reforms) and discouraging any move to incorporate blood products into the PBS. Many of the issues it touched on such as patient involvement and assessment of cost effectiveness were equally applicable to other categories of therapeutic products, and accordingly are considered in later chapters of this report. Its recommendations that were uniquely relevant to blood products included expanding the objectives of the National Blood Agreement to recognise the importance of innovation, a review of the reimbursement process for new bleeding disorder therapies, inclusion of a haematologist on the MSAC’s PICO Subcommittee, setting timelines for assessment of blood products, and introduction of parallel TGA and MSAC processing of blood products.
3.106
CSL Behring’s submission focused on blood products. Like the HFA, it emphasised that ‘plasma-derived products are a unique category of specialised therapies that require a bespoke HTA approach’, and that they are mostly used in treating rare diseases which brings further challenges as discussed throughout this report.
3.107
CSL Behring made a number of recommendations for improvements to the system, including: governments committing to fund access to new blood products within six months of a sponsor accepting a positive recommendation; devolution of the JBC’s HTA role to an independent expert committee; provision of a ‘clearly documented process’, including publication of guidance documents and an ‘appraisal cycle calendar’; development and implementation of policies for rare disease treatments; allowing parallel registration and reimbursement processing; creation of ‘a web portal for consumer comments’; and development and application of Key Performance Indicators for the blood product HTA process.
Committee Comment
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Over the course of the inquiry it became apparent to the Committee just how complex Australia’s regulatory and reimbursement system is. The Committee appreciates that a high level of complexity is necessary given the broad range of medicines and technologies the system must cover and the difficult and complex nature of the many of the decisions it must make.
3.109
If the Committee recommended every change suggested over the course of the inquiry and those recommendations were adopted the system would become considerably more complex, and potentially unworkable. Therefore the Committee has endeavoured to keep simplicity of the system front of mind in all its recommendations in this report. The Committee is supportive of the key measure in the Strategic Agreement 2022-2027 between Medicines Australia and the Australian Government that proposes a full independent review of the HTA process starting in July 2022.
3.110
The Committee acknowledges the hard work of the Department of Health and its staff in making the system more comprehensible to patients and the general public, particularly in the case of the TGA in the face of the unprecedented pressure of the COVID-19 pandemic. Nonetheless, the Committee believes that the publically available information about the regulatory and reimbursement system, on the Department of Health’s website, is still largely targeted at experienced industry members and their consultants. The Committee believes improvements should be made to the Department of Health’s websites to explain the regulatory and reimbursement system.
3.111
The Committee sympathises with MS Australia when it describes the Department of Health’s website as ‘impenetrable.’ While it is necessary for the TGA and the Health Technology Assessment (HTA) websites to include detailed technical information for applicants, the Committee believes that the Department should also include plain English explanations of the TGA and HTA processes on their websites for the benefit of the patients and families, who depend on the medicines and medical devices.
3.112
The Committee believes that the creation of the Department’s HTA Consumer Evidence and Engagement Unit was a significant step in the right direction in terms of engaging with patients, and was impressed by the TGA’s efforts to reach out to submitters to this inquiry to educate them about its work. It is the Committee’s view that education and engagement is an area that needs continual enhancement from the Department of Health. The Committee emphasises that while the Department of Health should do all that it can to better educate and engage with industry and clinicians, these groups need to continue to keep informed of how the system works. The Committee believes more resourcing from the Australian Government either directly to patient groups or through education programs is required.
3.113
For combination products, the Committee believes that the current system is well adapted to assessing some products, particularly where both products have the same sponsor and are submitted at the same time. The system struggles with products from different sponsors submitted at different times. The Committee recognises that medical innovations in health care are progressing rapidly and Australia’s HTA systems must adapt quickly to provide an agile assessment system. Therefore the Committee recommends a review of the HTA system to streamline the assessment of combination products, particularly combination products with different sponsors.
3.114
The national blood arrangements appear to be something of an anomaly within the current system. The Committee believes that this added complexity of the reimbursement and HTA system should be reviewed as part of the independent review in July 2022, as proposed in the Strategic Agreement 2022-27. The Committee believes that all reforms made to the broader HTA system should be applied to the national blood arrangements, so that the patients who depend upon them are not disadvantaged compared to patients of other diseases.