Introduction
7.1
While the Pharmaceutical Benefits Advisory Committee (PBAC) was the element of Australia’s Health Technology Assessment (HTA) system that received the most attention from submitters, many discussed the Medical Services Advisory Committee (MSAC), and to a lesser extent the Prostheses List Advisory Committee (PLAC). Most of the major issues raised were similar to those discussed in the previous chapter in the context of the PBAC and the HTA in general, although there were some important differences. Indeed, the extent to which the same principles can be applied to the HTA of medicines and that of devices was itself a controversial issue.
7.2
As outlined in Chapter 3, there are some major differences between the PBAC and MSAC in terms of structure, process, and even authority, with the PBAC being legislated while the MSAC is non-statutory. Importantly, while the MSAC’s primary role is to assess services for inclusion in the Medicare Benefits Schedule (MBS), it serves as a fall-back option for HTA of technologies that do not otherwise have a clear pathway through the system.
7.3
It should be noted that a new version of the Guidelines for Preparing Assessments for the Medical Services Advisory Committee (MSAC Guidelines) were published in May 2021, after submissions to the inquiry had closed and most public hearings had been concluded. This means that some of the evidence provided to the Committee may have been superseded, and given the highly technical nature of the MSAC Guidelines it has not been possible for the Committee to compare them comprehensively against that evidence. A brief discussion of the new MSAC Guidelines is included at the end of this chapter.
Length of review
7.4
The general view of submitters on the MSAC was that it has various features that require improvement. As was the case for other elements of the regulatory and reimbursement system, there was a common view among submitters that the current MSAC processes take too long to be completed and need to be accelerated. The Medical Technology Association of Australia (MTAA) stated that ‘industry’s experience is that the entire process for undergoing MSAC review and getting access following this review is very lengthy, frequently two years or more.’ BioMarin Pharmacetical Australia was critical:
Similarly, the…MSAC representatives recently stated that the length of the process was about 12 months and that typically, applications were not successful, and that it is not humanly possible to have a faster process. This accepted paradigm results in significant stakeholder frustration, long delays for patients, and significant resource burden for the Department of Health and sponsors. This may even make it less viable for many smaller companies to bring new treatments for rare diseases to Australia in a timely manner.
Resourcing
Funding
7.5
Unlike the Therapeutic Goods Administration (TGA) and the PBAC, the MSAC does not currently operate on a cost recovery model. Specialised Therapeutics Australia (STA) acknowledged that the extra resourcing that would be involved in the implementation of its recommendations (discussed below) ‘may require consideration of cost-recovery.’ Better Access Australia (Better Access) similarly recommended that the Committee ‘consider expanding fees to other parts of the system [beyond PBAC] to support more robust timeframes and transparency of processes in all subsidy assessment committees.’
Expertise
7.6
There was some commentary on the expertise currently available to the MSAC. STA suggested there is ‘a potential lack of expertise in assessing novel personalised/genomic medicine and technologies.’ The MTAA was much stronger in its criticism, stating:
MSAC consists of many high-quality experts from a range of fields, including health economics. However, it must cover a wide spectrum of technologies and disease states….the types of medical devices that will need to be evaluated in the future will be diverse. Of particular note is the central role of information and digital technology in many of these future devices. MSAC appointees already have limited knowledge of bioengineering in comparison to genetics or immunology for example. The growth of digital health will likely require the addition of expertise in this area as well. Heavy reliance on TGA will be important in the future but this should be augmented with other expertise within MSAC and, potentially, the secretariat, in order for medical devices to be properly assessed.
Even with the spread of expertise within MSAC, specialised knowledge in a particular procedure or device can be lacking. For instance, an interventional cardiologist may not be experienced as an electrophysiologist and have no direct experience in the use of technologies for these purposes, even though broadly they are in the same specialty. This direct experience is even more important with medical devices than biopharmaceuticals, because the clinician is often physically manipulating the device in question and the interrelationship between device and user is much closer.
7.7
It expressed concern with the ‘variable’ quality of assessments performed by external contractors, which it suggested could be due to the fact that most expertise in health economics is in pharmaceuticals, rather than devices.
7.8
AusBiotech noted the challenges novel technologies will pose to the MSAC and the system in general, and called for:
Broad education of regulatory and reimbursement health workforces to build understanding of the benefits, limitations and risks as well as the ethical, legal and societal impacts of emerging areas. Better connection within these workforces to expedite approvals for therapeutic products that cut across a number of disciplinary practices.
International cooperation and harmonisation
7.9
The need for alignment with international processes was a theme that ran throughout the inquiry, and while most submitters spoke in general terms or focused on PBAC, as discussed in Chapter 6, there was clearly much that was applicable to MSAC. The University of Melbourne, for example, commented that:
Australia’s approval process for new drugs and medical technologies should continue to look to international best practices and innovations with a view to ensuring all Australians can access new therapies wherever an available, high-quality evidence base can support it.
7.10
STA stated that ‘MSAC is “out-of-step” with equivalent global decision-makers.’ It argued that ‘taking into account the decisions of internationally equivalent decision makers would alleviate the burden’ on MSAC, as well as providing a ‘level playing field’ for patients. Dr Sue O’Malley claimed that the MSAC ‘is “out of step” with clinical evidence requirements in the rest of the world.’
7.11
Medicines Australia likewise argued that ‘MSAC decision-making does not show the same flexibility towards newer technologies when compared with other countries with similar national health systems, for example the United Kingdom (UK), Canada, and France.’ Myriad Genetics made a similar case:
We propose that MSAC recognise validity of international guidelines and more cost-effective methods of clinical validation that provide sufficient evidence of safety and efficacy. At present, Australia will continue to be left behind in the implementation of novel, personalised diagnostics as the costs to meet the criteria expected is beyond most IVD [in vitro diagnostics] companies.
The application process
Consistency and transparency of processes
7.12
In the opinion of some stakeholders the MSAC lags behind the PBAC in the consistency and transparency of its processes. Medicines Australia, for example, submitted that:
Through years of refining and feedbacks, the…PBAC processes are better established, where milestones and deadlines are clearly laid out for companies seeking PBAC consideration of a submission. This is not the case for the…MSAC.
….
As such, it is proposed that there is greater transparency and alignment of the MSAC and PBAC processes and guidelines, including (but not limited to) the publication of MSAC calendar, detailing milestones such as the availability of ratified MSAC Minutes and timing of Public Summary Documents, publication of MSAC agenda and outcomes at specified times (comparable to the long-standing practice of the PBAC).
7.13
Better Access similarly argued that:
…timing and access points [for PBAC] are standardised and clear and provide for detailed analysis of their recommendations and processes albeit not reporting statistically on them themselves.
Conversely, the processes of MSAC including referrals from other bodies such as the [National Blood Authority] represent considerable uncertainty and vaguery [sic] in process and timeframes for access and subsidy.
7.14
Other submitters simply focused on the MSAC’s own processes. Novo Nordisk Oceania called for ‘MSAC processes and timeframes [to] be standardised and expedited.’ Bayer Australia and New Zealand recommended:
Greater transparency and consistency of MSAC processes, such as:
Publication of MSAC calendar which details key milestones such as ratified MSAC minutes and timing of Public Summary Documents
Publication of MSAC agenda and outcomes at specified time
7.15
AstraZeneca Australia (AstraZeneca) similarly proposed:
…greater transparency and consistency of MSAC processes, including (but not limited to):
Publication of MSAC calendar (comparable to the long-standing practice of the PBAC agenda), detailing milestones such as availability of ratified MSAC Minutes and timing of Public Summary Documents
Publication of MSAC agenda and outcomes at specified times (as with PBAC)
7.16
STA criticised the transparency of the MSAC’s decision-making. It suggested:
That the MSAC processes and timeframes be standardised and expedited, including significant improvement in transparency of external data and contributions and time to provision of minutes from the meeting to allow sponsors to re-submit as quickly as possible and improve patient access.
7.17
It proposed ‘that an independent review process for MSAC decisions be introduced similar to that of the PBAC.’ BXTAccelyon similarly indicated that when it requested the MSAC to review a decision ‘after several months we received a one line response refusing any reconsideration without addressing any of the concerns raised in the submission.’
7.18
The Australian Cardiovascular Alliance (ACvA) demanded ‘greater transparency and consistency in MSAC processes.’ It submitted that this should involve:
Publication of an MSAC calendar (comparable to the long-standing practice of the PBAC agenda), detailing milestones such as availability of ratified MSAC Minutes and timing of Public Summary Documents is strongly recommended, as is publication of an MSAC agenda and outcomes at specified times (as with PBAC).
7.19
Edwards Lifesciences had some general criticisms of the MSAC’s ‘accountability and transparency.’ Its solutions to these issues included having the MSAC (and PLAC) appear before a Parliamentary Committee once a year, and for each body to publish ‘the number of applications submitted, approved and refused’ annually.
Engagement with sponsors
7.20
Some submitters were unhappy with how the MSAC engages with sponsors, in line with many of the concerns just discussed, as well as those raised in relation to other elements of the regulatory and reimbursement system. Myriad Genetics stated that:
We believe all interested parties would be better served through a more collaborative and consultative approach. This would improve the evidence collected and needed to satisfy MSAC’s requirement, as well as decrease the repeat submissions received and evaluated. Japan’s MHLW is an example of this collaborative approach. Consultation happens prior to a submission, before extensive evaluation implemented. Delivering novel personalised diagnostics to its population is significantly more efficient than in Australia.
7.21
The MTAA noted some deficiencies in this area compared with the PBAC’s processes:
Pre-submission meetings for MSAC are possible but not openly advertised on the MSAC website as they are for the…PBAC process. In fact, a number of our members were not even aware that they were possible when MTAA raised this. This opportunity should be clearly spelled out including the ability to bring subject matter experts into the discussion.
Furthermore, unlike major submissions for the PBAC, there is no opportunity for sponsors or their invited experts to address the MSAC meeting, which is needed to enable good decision making.
The importance of pre-submission meetings was stressed by Pathology Technology Australia (PTA).
7.22
Dr O’Malley was more concerned with the feedback process for unsuccessful submissions:
The current approval process, especially that for novel medical technologies, is not constructive, that is, it does not encourage the development and implementation of novel medical technologies in Australia. A quick read of any of the Public Summaries of ‘failed’ MSAC Applications will inform you of what was lacking, usually clinical evidence, but will not tend to have any positive, practical suggestions of how to overcome this lack of clinical evidence. It is not really helpful to say that the application lacked level I or II clinical evidence.
Interaction with the Therapeutic Goods Administration
7.23
There was considerable support for better coordination between the TGA and the MSAC. Abbott Diabetes Care noted that parallel processing is not available for TGA and MSAC submissions as it is for the PBAC. It recommended that this be introduced, which it said ‘will increase efficiencies and reduce the time to reimburse critical technologies.’ This idea was put forward by Stryker South Pacific (Stryker), the ACvA, Edwards Lifesciences and Better Access.
7.24
The MTAA commented that:
One additional point of relevance is that MSAC and HTA committees generally need to avoid repeating evaluations already undertaken by the TGA. While the comparative safety of a device is relevant to HTA, whether the product is sufficiently safe has already been established by the TGA. Nonetheless, this question can sometimes be revisited at MSAC.
7.25
STA likewise argued that ‘the role of the TGA in determining safety and efficacy should be given higher weighting by the MSAC.’ It recommended that the TGA and MSAC work together to create a ‘national list of novel health technologies recently approved…to allow for transparent reporting on their assessment and adoption.’
7.26
Adjunct Professor John Skerritt, Deputy Secretary, Health Products Regulation, Department of Health, told the Committee that:
Finally, a number of submissions said MSAC and TGA should work more closely together. I think that's worthy of exploration, although it's important to realise that MSAC looks at services. Sometimes the product is only part of that service, and often the product is not one particular company's product but a class of products. Of course, as a regulator, we look at individual commercial products; we don't register products by class. There's often an issue of differences in timing of submissions. A product may go onto the register and after a few years of use it seems that it will have a valuable and potentially cost-effective role as part of a service. So while I think alignment between TGA and MSAC is something that we need to do a bit more work on, it is not as straightforward as, for example, parallel processing in medicine applications.
Novel technologies
7.27
Several submissions specifically addressed issues relating to the MSAC’s assessment of novel technologies in general, or to specific types of technologies. Medtronic Australasia (Medtronic) that:
Reimbursement arrangements can create perverse incentives not to adopt newer technology, despite the benefits to patient outcomes and total healthcare costs. Funding policies that dictate where technology has to be delivered can also create additional inefficiencies across the healthcare system.
7.28
The MTAA recommended that the TGA and MSAC work together to create ‘national list of novel health technologies recently approved…to allow for transparent reporting on their assessment and adoption.’
7.29
AstraZeneca called for increased flexibility in the MSAC’s processes ‘to fast-track urgent…devices.’ This was echoed by the ACvA, which described it as a matter of ‘urgency.’ Medtronic argued that ‘establishing a process for breakthrough, high cost or highly specialised technologies would enable a more strategic national approach to patient access.’
7.30
Roche Australia (Roche) raised concerns with how the MSAC’s service-based funding model might work for some novel technologies. It noted that:
…there is no subsidy or reimbursement scheme for patients for many medical devices including software or artificial intelligence technologies. While technically, the MBS can be used to fund a number of technologies, it is not set up to reimburse patients for the use of a technology, only medical service providers. The only specific schemes providing support to patients for the purchase of medical devices and aids are in disease-specific conditions such as the National Diabetes Supply Scheme, the Continence Aids Payment Scheme, the Stoma Appliance Scheme and the National Disability Insurance Scheme.
7.31
PTA addressed the challenges and opportunities posed by digital pathology. It argued that:
It is likely that some measure of value to patient outcomes and the healthcare economy will be delivered by data mining, correlating genomic data with clinical syndromes and with known therapies. Consideration needs to be given to how such data analysis is structured, regulated and funded.
7.32
It submitted that ‘Australia is falling well behind the developed world in our deployment of Point of Care Testing (POCT)’ (that testing conducted where care is delivered, as opposed to the samples being sent to a laboratory). It suggested that ‘mostly because there is no framework or funding for POCT.’
Post-recommendation process
7.33
There was criticism of how positive recommendations from the MSAC are treated. The MTAA explained that:
…after a positive recommendation the time for the Government to act on the decision is indefinite. Unlike Pharmaceutical Benefits Scheme (PBS) listings which, as of this [2020] October Budget, now have their own allocated funding in the Budget and can be announced at any time, MBS listings can disappear into the Budget process for a long period, are only announced at the Budget or MYEFO and still require a financial offset from within the Health portfolio.
7.34
It asked for ‘Government to commit to funding MSAC recommendations in a timely way, similar to PBAC.’
7.35
AusBiotech similarly submitted that:
…unlike PBAC, MSAC does not have specified timeframes and the Health Minister does not have authority to sign off recommendations under $20M without cabinet approval. MSAC recommendations are also tied into the budgetary cycle.
Provisional access
7.36
The idea of allowing provisional or interim access to devices while further evidence is collected on their efficacy and potentially safety received strong support, just as it did for medicines. Unlike for medicines, there is no scope for this to occur under the current system, as was explained by Medtronic:
Managed Entry Agreements (MEAs), which are routinely used for early access or interim funding of medicines whose clinical evidence or cost-effectiveness is uncertain at the time of application/market entry, could also have potential to be utilised for non-drug technologies.
MEAs including Coverage with Evidence Development (CED) or risk-sharing agreements are suitable for devices and diagnostics where there is less ‘traditional’ Clinical Trial evidence at launch but potentially an increased ability to collect real-time data that could be used to help answer these uncertainties through a remote patient monitoring platform.
Coverage with Evidence Development (CED) has been utilised across a number of jurisdictions since its introduction by the US Centers for Medicare and Medicaid Services (CMS) in 2005.
Australia has experimented with CED for devices in some forms in the past, but an established model has not been embedded in our HTA processes for non-drug technologies. Formal CED acceptance would enable earlier patient access to innovative technologies.
7.37
Dr O’Malley provided a table of 17 past MSAC applications that were granted interim funding, with the first listed in 1997 and the last in 2007. She argued that:
Arising out of the uncertainty in decision making in any healthcare sector, decision makers are faced with the dilemma of determining which has the greater risk: making available medical procedures that are ineffective or even harmful (Type I error) or denying access to medical procedures that are beneficial and efficient (Type II error).
In almost all cases, a Type I error is self-correcting since practitioners will cease to perform the medical procedure if it proves to be ineffective or unsafe. The Type II error is by far the more serious since it is not self-correcting. If a procedure is refused MBS funding it is extremely unlikely that the procedure will ever be performed in Australia.
7.38
After providing the list of past instances of interim funding she stated:
I believe that the reasons for the discontinuation of this interim funding pathway can be overcome and are far outweighed by the advantages. A quick check of this list shows that virtually all of these procedures are still MBS listed.
She did not detail what the reasons for the discontinuation were.
7.39
The ACvA pointed to the US example, suggesting:
… a market entry scheme for devices, along the model of the US Centres for Medicare and Medicaid Service (CMS), which has introduced a Medicare Coverage of Innovative Technology (MCIT) and Early Feasibility Studies in the framework of the new EU Medical Devices Regulations.
7.40
The US approach was noted by the Australian Clinical Trials Alliance (ACTA), along with the UK Cancer Drugs Fund. It suggested that neither of these approaches could simply be copied for use in Australia, but they both offer useful lessons. It stated its belief that:
…the approval pathway for certain new services/technologies that are likely to be significant to patients and represent a high-cost to the MBS should be expanded to incorporate the conditional listing of the new item subject to the collection and analysis of robust clinical and patient-centred outcome data through either a randomised clinical trial or a clinical quality registry.
7.41
It argued that this approach would provide support for investigator-led clinical trials and clinical quality registries.
7.42
The Rare Disease Industry Working Group (RDIWG) noted that many ‘novel technologies…will provide significant long-term health benefits for patients,’ but ‘may have limited data at the time of assessment.’ It therefore argued that
‘there should be a focus on the development of innovative access mechanisms to ensure patients have the advantage of being able to access treatment in parallel to the long-term collection of real-world evidence (RWE).
7.43
The issue of the collection and use of RWE is discussed in more depth below.
7.44
The introduction of interim access for devices was supported by Stryker, Johnson & Johnson and Edwards Lifesciences. The latter suggested that this could be ‘along similar lines’ to the Managed Access Programs used for medicines and ‘could include the use of registries and dedicated multidisciplinary centres of excellence which have experience with these high-value medical devices offering treatment to patients living with conditions where there is a recognised high unmet need.’
7.45
Sleepfit Solutions focused on the specific issue of approval of digital therapeutics (DTx) and championed the German approach, which features a specific pathway for digital products introduced in 2020, known as the Fast-Track Process for Digital Health Applications (DiGA). It submitted that
The key features of the German process are:
Clearly articulated with maximum transparency as a key focus…
Initial assessment of the DTx by the German government is completed within 3 months, after which time the DTx can be provisionally listed and prescribed by clinicians or requested by patients. At this point the DTx is reimbursable by insurers
Provisional listing allows the ‘manufacturer’ to gather enough evidence of positive healthcare effect to allow for full admission to the DiGA Directory. The evidence requirements are again, clearly outlined, and guided by recognised international standards.
Approaches to evidence
Real World Evidence
7.46
As noted by the RDIWG, a closely related issue to the possibility of providing provisional access to devices is the collection of RWE. In the medical devices context, Stryker explained the role that RWE should play in provisional access as follows:
In relation to the introduction of innovative technology (without adequate clinical evidence or potentially without an adequate comparator) the ability to commit to an ongoing post-market clinical follow-up in lieu of excessive pre-market evidence generation is also important to enable access in both the public and private sectors. This should include maintaining reporting requirements and the ability to halt access should early issues be identified.
7.47
Edwards Lifesciences took a broader view, emphasising the need for RWE to be considered an important part of the evidence for device approval in general:
The draft MSAC guidelines which are currently being reviewed need to adopt a more flexible approach to the levels of data and evidence it will accept. MSAC should look at the broader lifecycle approach to HTAs thus a greater need for incorporating observational and real-world-data into the assessment process. Further, unlike our pharmaceutical counterparts, device companies are dependent on issues outside our control including the surgeon’s skills implanting the device.
7.48
It recommended ‘giving greater weight to other forms of evidence beyond clinical trials, including real-world evidence.’
7.49
Ms Susan Martland, Member, PTA, told the Committee:
Certainly at Pathology Technology Australia we believe that the MSAC guidelines really need to accommodate the realities of evidence generation and look carefully at some real-world evidence not only that can be generated in local jurisdictions but that has already been generated in international jurisdictions. Things like point-of-care testing, for example, are used widely in Europe. Looking at this real-world evidence can then be considered as an efficient, cost-effective way to assess new and existing healthcare technologies.
7.50
Novartis Australia and New Zealand (Novartis) meanwhile called for ‘a consistent approach, supported by Government, for the generation of [RWE] via registries to address evidence gaps in economic evaluations.’ Medtronic stated that:
Real world data (RWD) sources can include routinely collected healthcare data from a variety of sources including electronic health records, government agencies, medical societies, product and disease registries and patients. The main issue for generating RWE studies from these sources in Australia is our inability to access this data. In Australia, RWD sources are characteristically fragmented and there is a complex data privacy and governance landscape operating at different state and local levels that further impact the access and use of RWD.
7.51
Takeda Pharmaceuticals Australia (Takeda) noted the potential for collection of thorough RWE for technologies which will require patients to undergo long-term monitoring for safety reasons, such as cell and gene therapies. AstraZeneca addressed a more specific issue, asking for ‘better clarity on how…MSAC …treat real world evidence (RWE) and secondary tiered data sources when addressing off-label and/or pan-cancer treatments.’
7.52
The ACTA recommended:
Conduct a review of potential reforms to the…MBS, aimed at facilitating the better generation of real-world evidence to improve outcomes and deliver value gains. The review should consider ways to use savings generated through investigator-initiated trials and [Clinical Quality Registries] as a means of funding these activities.
Post-market surveillance
7.53
As discussed in previous chapters, an essential requirement for use of provisional access schemes and RWE is effective post-market surveillance. The University of Melbourne submitted that:
Post market surveillance mechanisms such as prosthetic registries are often unreliable, requiring years of data collection which is often insufficient in its granularity to provide meaningful interpretation of causes for success or failure. A more pro-active, in-depth interrogation of efficacy, safety and health economic outcomes during the early implementation phase could be undertaken by relevant discipline experts at nationally accredited centres. This would provide a strong evidence base to support broader dissemination (or not) of a new technology. Devices/prostheses are examples of where this is most pertinent as controlled implantation under rigorous scrutiny and subsequent interrogation in specifically credentialed centres is required to truly evaluate cost and clinical effectiveness. Recommendations that support broad adoption of a new treatment should also include recommendations to restrict or prevent existing, less-effective treatment practices where there is strong evidence available. Further discussion is required on the source of such recommendations, which should be independent of funders, driven by the science and healthcare needs, and enabled by a body of experts in clinical care, health economists, and clinical triallists.
7.54
Stryker meanwhile suggested ‘utilising the early adoption of medical technology in Australia’s private health sector to collect post-market surveillance and performance data to inform policy, regulatory and funding decisions.’
Evidentiary requirements for different technologies
7.55
One particular challenge for the MSAC is the wide variety of different technologies it is responsible for assessing. Roche commented that there is insufficient guidance available for many of these technologies presently. It submitted:
There are many technologies where guidance on the HTA requirements is absent, or has been insufficiently developed for sponsors to provide consistent evidence that meets assessment expectations. There is currently no existing guidance for digital health technologies and artificial intelligence, creating uncertainty for sponsors. Similarly for gene and cell therapies, a greater level of granularity in HTA requirements in the MSAC guidelines would assist sponsors prepare submissions and reduce assessment churn. Roche notes that the current review of MSAC guidelines did not provide further guidance on this.
Digital technology and Artificial Intelligence
7.56
TALi Health outlined its work in digital therapeutics and called for ‘alignment of the reimbursement processes so that real-life data collected on patients can be a more prominent factor in fast-tracking reimbursement.’ Sleepfit Solutions explained some of the difficulties with regulation of digital therapeutics. It noted that many of these difficulties apply to reimbursement, and summed up its argument by saying ‘products are continually changing and improving, despite the ongoing need to prove clinical efficacy and health economic value (which typically requires a rigorous and lengthy clinical trial process).’
7.57
The MTAA commented on digital technology:
…digital technology undergoes constant upgrading. It will be very difficult to generate new clinical data for every innovation cycle. Under the MSAC approach of ‘beyond reasonable doubt’ evidence levels, this technology will simply be blocked from patient access on the grounds that it is not ‘cost-effective.’
7.58
Varian Medical Systems Australasia provided a more specific example of the challenges technology involving artificial intelligence (AI) can face. It described its adaptive radiotherapy technology, which uses AI to assist a clinician to update a patient’s radiotherapy treatment plan on a daily basis based on the patient’s response to the treatment, as opposed to the traditional approach of developing the plan at the start of the treatment and sticking to it. It explained that this benefits the patient, but the current approach to reimbursement does not account for the extra time involved for the clinician or the use of the AI technology itself.
Diagnostic technology
7.59
Myriad Genetics explained that the MSAC has rejected 10 of its applications for a diagnostic test for a type of breast cancer. It argued that the MSAC is demanding a level of evidence that is unreasonable for such a test, including a randomised controlled trial which it said would be unethical to perform (because some participants would have to miss out on chemotherapy) and would take 15 years to complete. It argued that overseas authorities are do require the same level of evidence, and will accept ‘well-designed retrospective trials (e.g. retrospective analyses of prospective data).’ STA made similar comments about its experience, apparently for the same test.
Radiopharmaceuticals
7.60
BXTAccelyon made a submission regarding the MSAC’s decision not to recommend a radiotherapy for prostate cancer. It submitted that ‘MSAC is making decisions that are not reasonably assessing the clinical evidence available,’ that it ‘is demanding a level of evidence that is not reasonable,’ that ‘the current approval process does not appear to measure all treatment options equally’ and that it does not pay sufficient attention to clinicians’ views.
Alignment with the Pharmaceutical Benefits Advisory Committee
7.61
Some submitters questioned the division of HTA into separate PBAC and MSAC processes. However many in the medical devices sector were adamant that the MSAC is in fact too closely aligned with the PBAC, particularly in its evidentiary requirements, which in the PBAC’s case were designed for assessing pharmaceuticals rather than devices. Edwards Lifesciences submitted that:
Part of the problem lies with MSAC aligning too closely with PBAC. That may work well for the process of pharmaceuticals assessment, which tends to rely on evidence from randomised controlled trials, but it does not suit the medical device sector that need to be measured using a wider range of evidence.
7.62
Similarly, Dr O’Malley commented that:
The approval process for novel medical technologies…applications to the…MSAC has been modelled on that for new drugs, applications to the…PBAC. This is despite the crucial differences between medical technologies and pharmaceuticals.
7.63
Medtronic noted that ‘there are challenges with evidence collection with devices. For instance, it is not possible to generate the same level of evidence through a randomised controlled trial (RCT) with implantable devices.’ Abbott Diabetes Care stated that:
The guidelines for regulatory and reimbursement consideration are focussed and heavily weighted on randomised controlled trials (RCT) with double-blind groups (i.e. participants are blinded to the traditional drug treatment). However, it’s impossible to run double-blind groups with [many devices]. Also, the data generated from devices is different given the product cycles and, therefore, may be more practical to run real-world evidence (RWE) to assess healthcare efficiencies. Ethics issues in device trials, sample sizes, all militate against direct comparison between pharmaceuticals and device therapies.
In practice Health Technology Assessment (HTA) Agencies such as MSAC can have a substantial focus on internal validity with RCTs from Australian HTA bodies that include both Government and academia bodies. It is quite likely that a perfect package of evidence cannot be generated to meet the needs of all decision makers, given the ethical, time and budget constraints for pivotal studies. The power of RWE with large sample sizes after market entry can be greater than the power of small RCTs but RWE is undervalued. Further, effectiveness of a technology in a more generalisable population should be considered equally as high as any available RCT’s, particularly when there is substantial RWE demonstrating the effectiveness on a broad population.
7.64
Johnson & Johnson similarly argued:
The current MSAC technical guidelines for therapeutic services and technologies – including the approach to evaluation, evidence quality appraisal and economic evaluation – are historically based on the evidentiary standard for pharmaceuticals included in the PBAC guidelines. The guidelines assume that…HTA methods, including the classical evidence hierarchy, suitable for drugs are suitable for therapeutic services, medical devices and other technology- enabled innovative technologies.
However, classical evidence hierarchy cannot always be applied for medical devices and some new medicines technologies, as…RCTs are difficult (and sometimes impossible) to conduct in a format acceptable to HTA bodies. RCT evidence is not always available and appropriate, especially for devices that have very short product life cycles before a new iteration is available.
7.65
The MTAA submitted that:
The biggest challenge is the expected evidence levels that are applied to new technologies. HTA methodology was essentially developed for the pharmaceutical industry. However, pharmaceuticals typically lend themselves to the development of much more data than do medical devices.
7.66
The MTAA went on to provide a list of some of the relevant differences between medicines and devices, some of which have already been discussed. It then list further challenges that many devices face:
Device performance is dependent on operator skill
Blinded trials often not practicable
Short life cycles/incremental improvements narrow evidence window
Low volume in some cases reduces quantity of evidence
The valuation process
A broader concept of value
7.67
As was the case for the PBAC, many submitters felt that too narrow a range of factors is currently considered by the MSAC during its valuation process, and a broader concept of value should be used. The ACvA provided an example:
…novel devices such as wearables are often fitted in the hospital on the day of discharge and worn by the patient in the community. This could be regarded as a service to the hospital (freeing up beds), the patient (allowing them to recover at home) and the physician (giving them flexibility in patient treatment).
7.68
It claimed that ‘widespread adoption of digital health technologies is inhibited by the lack of a coordinated framework for assessing the value of digital technologies and incorporating such value assessments into reimbursement mechanisms.’
7.69
Edwards Lifesciences argued that:
Assessment processes need to consider and reliably measure the breath of ways that medical technology can create value beyond the traditional clinical and safety outcomes of a product. This includes but is not limited to a broad array of patient-centric values.
7.70
It encouraged the Government ‘to adopt a holistic philosophy that incorporates both cost-effectiveness and the wider considerations at the heart of [value-based healthcare] and HTA.’
7.71
Stryker likewise emphasised that ‘evidence-based studies with a focus on clinical outcomes are vital, as is cost-benefit analysis, but this must be enhanced with data on patient outcomes and experiences in order to fully assess the value of the investment.’ Medtronic encouraged ‘adoption of more value-based considerations in health technology reimbursement, where outcomes that matter to the patient contribute to the value being defined.’
7.72
Roche noted that although consideration of ‘the value of societal outcomes’ is provided for in the MSAC Guidelines:
…they do not do so in a quantitative manner - i.e societal outcomes are not included in the cost-effectiveness calculation. It would be valuable for the Government to provide transparency and clarity around how opportunities for more formal inclusion of societal benefits in cost effectiveness calculations can be undertaken. This would assist industry in understanding whether an application may be feasible.
7.73
Johnson & Johnson commented on the MSAC Guidelines that:
There is less focus or acceptance of societal value (e.g. carers, patient productivity etc.), improvements in patient experience in using product (e.g. compliance, ease of use), other savings to Government (e.g. savings to education, housing or justice), or economic productivity impacts.
7.74
Novartis stated that ‘based on the current evaluation framework, it is not possible for…MSAC to consistently consider benefits beyond patient outcomes and health system costs.’ Its recommendation to remedy this problem was:
Expand technical guidelines to incorporate additional attributes such as impact on the lives of carers, productivity, participation in workforce and education and an “innovation factor” potentially adjudicated by an independent agency that evaluates against attributes defining ‘real innovation.’
7.75
Merck Sharp & Dohme Australia argued that ‘the current HTA framework does not fully account for, or appropriately value, the full range of benefits offered by diagnostic technologies, potentially resulting in inequitable access and forgone benefits for the healthcare system.’
Future benefits
7.76
The discussion of the MSAC’s approach to valuing future benefits was less technical than that for the PBAC, with no exploration of the issue of discount rates, but the general sense was the same. The RDIWG did argue that:
…novel technologies are likely to be associated with high upfront costs whereas the benefits may occur over a prolonged period of time. The uncertainty about long-term outcomes will require a sustainable framework for risk-sharing arrangements between manufacturers and the Government.
7.77
Takeda similarly suggested that ‘new funding models between manufacturers and reimbursement authorities will be critical to manage the uncertainty over future long-term outcomes.’
7.78
Johnson & Johnson stated that:
new innovative technologies…require a recognition of the potential curative benefits to patients and subsequently require consideration of the most appropriate model structure to reflect such benefits. This includes identification of appropriate extrapolation assumptions where long-term outcome data may not be available.
7.79
Likewise Novartis encouraged the MSAC and the Department to:
…work with healthcare professionals, academics and industry to outline an evaluation framework that addresses the limitations associated with one-time innovative therapies with life time benefits that can substantially improve life expectancy and quality of life for patients and carers.
Choice of comparator
7.80
UCB Australia raised the issue of choice of comparator, commenting that the requirement for the MSAC to use the ‘lowest cost comparator’ means that it and the sponsor ‘are not able to use the most clinically appropriate comparator consistent with the standard of care for patients.’
The Prostheses List Advisory Committee
The scope of the Prostheses List
7.81
A number of submitters had comments to make on the PLAC. The PLAC sets the price of certain implantable devices on the Prostheses List (PL), which private health insurers must cover. Medistar criticised the fact that there is no equivalent to the PL for non-implantable devices as unfair to patients, and gave the example of one of its devices, a handheld nerve stimulator used to treat headaches and migraines. It recommended that the Government ‘establish a sustainable funding program for proven, cost effective, non-implanted medical devices.’ It noted that, in the case of devices that end up being listed on the PL, ‘public patients may have access to a medical device for one or more years before private patients.’
7.82
Medtronic suggested that the PL has successfully fulfilled its role for implantable technology, but likewise argued that ‘there needs to be a designated reimbursement pathway for diabetes technology and non-implantable devices.’ It commented that:
Any refinements to the current PL arrangements must encourage innovation that improves patient outcomes and must be pragmatic about evidence. Conversely, changes that slow innovation or create further hurdles, be they financial or time, for regulatory and/or reimbursement and that are not aligned with value for patients jeopardise government goals of effective healthcare delivery and sustainability.
7.83
The MTAA also voiced its support for providing coverage for non-implantable devices.
The functioning of the Prostheses List Advisory Committee
7.84
Edwards Lifesciences noted the delay the PLAC process can cause between public patients receiving access to a device and private patients. It was highly critical of the PLAC, focusing particularly on what it suggested was ‘inconsistency’ in decision-making. It submitted that:
We would question the purpose of the PLAC and its Clinical Advisory Groups (CAGs). From our perspective, the PLAC and CAGs operate as a second regulatory process. This duplicative process is already being performed by TGA and MSAC. In our experience, PLAC has been inconsistent, lacks transparency and accountability and constantly moves the goalposts. Reforms are needed, including clear metrics so sponsors know where they stand from the beginning. Further, members of CAGs should be limited to two four-year terms to ensure new input to the CAGs.
7.85
Stryker argued that there is some duplication between the PLAC’s role and the TGA’s, and claimed that it has had difficulties with ‘delays involved in including new technologies on the [PL], particularly when this involves creating a new product group.’ It suggested that the PLAC’s evidence criteria are too strict, particularly for devices containing 3D-printed components, and that the listing criteria in general have not kept up with advances in medical technology and are in need of updating.
7.86
The MTAA was critical of the PLAC. It submitted that ‘PLAC and MSAC processes do not synchronise well, and this can lead to unnecessary delays.’ It criticised the PLAC’s engagement with sponsors, which it suggested should be increased for ‘applications for higher benefits,’ where ‘a more detailed HTA is almost certain.’ It also suggested the PLAC and its CAGs require more expertise in certain areas, such as bioengineering and digital technology, as well as more involvement from patients of the specific conditions under consideration. Finally, it argued that the PLAC process is ‘more onerous than is warranted’, and in particular duplicates much of the safety work already performed by the TGA.
Current debate on reform of the Prostheses List
7.87
The Committee recognised that tension existed between the medical technology industry and private health insurers.
7.88
The MTAA discussed the Agreement it has between the Government and the MTAA that concludes on 31 January 2022:
Under the Agreement, medical device companies delivered $1.1 billion in savings to the Prostheses List. The Agreement included recognition of the need for further Prostheses List reform, something that MTAA has willingly engaged in.
7.89
The MTAA commented on proposals being made by private health insurers that:
…rather than facilitating access to the best technologies will likely dampen their uptake, or result in market failure in the form of out-of-pocket costs to consumers. The proposals include paying for devices through a DRG (activity-based funding) system rather than the Prostheses List. This would abolish the Prostheses List as a consumer protection for patients.
7.90
Private Healthcare Australia (PHA), the insurers’ industry body, reinforced its position to the Committee commenting that:
The medical device funding system in Australia is broken. Australian consumers (through their health insurance premiums) pay too much. The system is so complex that it is prone to mistakes and to manipulation...
Australians pay the highest prices for medical devices in the world. We pay 30-40 per cent more than New Zealand, France, South Africa and the United Kingdom. Some prices are just outrageous, twice and three times more than in other markets.
7.91
PHA concluded that the costs of doing nothing are huge, as private health insurance becomes less affordable for many Australian families.
7.92
PHA provided information about the blueprint for PL reform. It informed the Committee that with these achievable reforms it would provide:
Doctors and patients access to a full range of medical devices and there will be no co-payments, and
Where patients have need for more expensive devices than the average, doctors will be able to access more funding through a simple declaration form.
7.93
Biotronik Australia submitted that as a result of increased pressure for cost savings it:
…has suffered over a 30 per cent decline in returns for our technologies through significant reductions to the Commonwealth Prostheses List that is impacting on our abilities to maintain our engagement with the Australia market.
Reform announced in the 2021-22 Budget
7.94
As part of the 2021-22 Budget the Government announced that:
The Australian Government is investing $22 million over 4 years to reduce the cost of medical devices used in the private health sector and streamline access to new medical devices, which will improve the affordability and value of private health insurance for Australians.
This measure will modernise and improve the Prostheses List (PL). This will better align the price set for medical devices on the PL for private providers with those paid for in competitive markets such as those in the public hospital system.
This will be implemented by the Department of Health in conjunction with the Independent Hospital Pricing Authority, and in consultation with key stakeholders.
7.95
The Department informed the Committee that:
As part of the suite of reforms as announced in the 2021-22 Budget Measure, Modernising and Improving the Private Health Insurance Prostheses List, it is intended that the purpose and scope of the Prostheses List will be clarified. This may see some technologies become eligible for listing on the Prostheses List that are not currently eligible and, in particular, specific purpose, non-implanted devices. Currently only implanted devices are eligible for listing.
Medical Services Advisory Committee Guidelines Review
7.96
When asked by the Committee about its view of the criticisms of MSAC discussed above, the Department referred to the new Guidelines. It stated that:
New MSAC Guidelines recently published at: www.msac.gov.au/internet/msac/publishing.nsf/Content/MSAC-Guidelines, which better align MSAC assessment methods with best practice in HTA for therapeutic and investigative technologies, taking account of input from stakeholders.
The new Guidelines are forward-thinking and applicable to the range of technologies and services MSAC will likely consider into the future. The updated MSAC Guidelines provide guidance for newer technologies, including genetic testing for heritable diseases and other screening tests.
These aim to provide applicants with clarity and certainty about the assessment methods, which in turn will mean simpler and more successful applications. The Government is committed to continuing to improve MSAC processes, including in respect of stakeholder input, communication and transparency.
…
The expansion of the Health Products Portal, currently used for applications for PBS listing, will provide a single, easy to use place where applicants can apply and track their applications to MSAC and is an opportunity for further process improvements.
In addition, the Department is developing options for improvements to MSAC processes and the potential introduction of cost recovery arrangements to address stakeholder feedback on the need for improved clarity, transparency, and certainty of timeframes.
7.97
The Department has published an explanation of the differences between the old and new Guidelines on the MSAC website. Most relevantly for current purposes this includes:
There are options to present additional relevant information such as the Inclusion of the ‘Value of Knowing’ and ‘Other Relevant Considerations’
The revised Guidelines provide guidance for newer technologies, including genetic testing for heritable diseases and other screening tests, incorporating information that used to be in the Clinical Utility Card (CUC) Proforma
There is an exemplar/facilitated approach for investigative/diagnostic genetic tests
Committee Comment
7.98
In the Committee’s view the issues relating to the MSAC were some of the most difficult raised throughout the inquiry. The Committee believes that there are two main difficulties facing the MSAC: first and foremost, the wide variety of different technologies it is required to assess; and secondly, a less transparent and robust process in comparison to the PBAC.
7.99
It is clear to the Committee that the MSAC performs a flexible yet complex role, and it wishes to thank MSAC’s members and the staff from the Department of Health (the Department) who support it for their work.
7.100
The Committee notes the Department’s evidence that the Australian Government is considering the introduction of a cost recovery model for the MSAC. While this would clearly be a significant change to current arrangements, the Committee believes that it should be considered if the MSAC requires extra resources to fulfil its role, although only after consultation with the states and territories, industry, patients and clinicians to ensure that it will not interfere with patient access to devices. The Committee recommends the same submission fee waiver scheme for the MSAC, if implemented, as is recommended in this report for the PBAC. That being to include a scheme to include HECS-style fee waivers for Australian start-up companies, orphan drugs and companies with revenue of under $50 million per annum. Submission fees would only be payable for successful submissions once the drug has been listed and earned a specific amount of revenue in the Australian market to promote innovation. In addition, the Committee believes a sliding scale of fees should be considered for resubmissions, with fees being lower for resubmissions.
7.101
The Committee believes that, given the range of devices the MSAC must consider, expertise for assessments must depend in large part on effective consultation with clinicians, although the expertise of the MSAC’s members should reflect the applications it is assessing as much as possible. The Committee notes the shortage of health economics expertise in devices, and a shortage of health economics expertise in general, and believes that the Australian Government should take steps to attempt to remedy this. In the Committee’s view, the same considerations that were discussed in relation to the PBAC’s international cooperation and harmonisation apply to the MSAC, and this should be increased where possible.
7.102
The Committee appreciates that the MSAC is in a difficult position in regard to the consistency of its processes, since it needs to maintain a greater level of flexibility than the PBAC. The Committee considers that there is room for more consistency while maintaining that flexibility, particularly in publishing its calendar and meeting agendas. The Committee notes that both the MSAC and sponsors need to work on improving their understanding of the system and their engagement. Consideration should be given to allowing sponsors more opportunities to present at the MSAC and to an expansion of pre-submission meetings.
7.103
The Committee notes the TGA’s evidence that parallel processing of TGA and MSAC applications would be difficult however it suggests further consideration be given to this proposal. The Committee acknowledges that concerns were raised with the MSAC’s approach to assessing many diagnostic technologies, however there appears to have been a serious attempt to address many of these concerns in the new MSAC Guidelines. The Committee would like to see similar action taken to address the concerns that were raised about digital technologies.
7.104
The Committee notes that there were many similarities in the concerns raised with the MSAC’s approach to evidence and valuation of devices and those raised in relation to the PBAC, such as the need for more use of Real World Evidence (RWE) and the need to consider non-health benefits in valuation. The Committee accepts that there are important differences between assessment of medicines and devices, and in particular that randomised controlled trials must play a smaller role in the approval of devices. The Committee supports the MSAC giving more weight to evidence beyond traditional clinical trials and considering a broader range of costs and benefits in its valuation process.
7.105
The Committee is unclear if the MSAC will form part of the independent HTA Review and believes it is important to include the MSAC in this review.
7.106
The Committee appreciates that there are a number of difficult issues concerning the PL and PLAC, and welcomes the Australian Government’s recognition that reform is needed in its 2021-22 Budget. The details of those reforms were not publicly available but the Committee hopes that they will at minimum expand coverage to include non-implantable devices, and improve the coordination between the MSAC and PLAC to reduce delays in access for patients.