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Appendix 2: Processes Leading to PBAC Consideration – Annual report 2009-10

Introduction

This is the first annual report to the Parliament on the processes leading up to Pharmaceutical Benefits Advisory Committee (PBAC) consideration for the financial year 2009-10.

This annual report has been prepared pursuant to Subsection 99YBC(5) of the National Health Act 1953 (the Act), under which it is required that:

The Secretary must, as soon as practicable after June 30 each year, prepare an annual report on the processes leading up to Pharmaceutical Benefits Advisory Committee consideration, including:

The extent and timeliness with which responsible persons are provided copies of documents relevant to their submissions to the Pharmaceutical Benefits Advisory Committee;
The extent to which responsible persons exercise their right to comment on these documents, including appearing at hearings before the Pharmaceutical Benefits Advisory Committee; and
The number of responsible persons seeking a review of the Pharmaceutical Benefits Advisory Committee recommendation.

Cost recovery for processes leading to PBAC consideration commenced on 1 January 2010 and the July 2010 PBAC meeting was the first for which fees have been collected.

PBAC Cost Recovery Reform

Background

Cost recovery policy is administered by the Department of Finance and Deregulation and is outlined in the Australian Government Cost Recovery Guidelines, July 2005, along with Finance Circular 2005/09. Finance Circular 2008/08 further clarifies the governmental oversight of cost recovery policy. The underlying principle of the policy is that agencies should set charges to recover all the costs of products or services where it is efficient and effective to do so, where services will be provided to an identified group and where charging is consistent with Australian Government policy objectives.
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PBS Cost Recovery Regulations

Section 140 of the National Health Act 1953 (the Act) provides in part, that the:

Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by this Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.

Division 4C of Part VII the Act enables fees to be charged for certain services provided by the Australian Government in order to recover the cost to the Commonwealth of providing those services. Those services relate to the exercise of certain powers of the Minister for Health and Ageing (the Minister) under section 9B of the Act (which relates to the National Immunisation Program (NIP)) and under Part VII of the Act (which relates to the Pharmaceutical Benefits Scheme, or (PBS)). The services include the functions of PBAC and its sub-committees; the functions of the Pharmaceutical Benefits Pricing Authority; and related functions performed by officers and administrative staff of the Department of Health and Ageing (the Department), and by contractors and sub-contractors of the Department.

Section 99YBA of the Act provides for regulations to set out the fees that are payable for those services, as well as other matters relating to the payment of those fees and the provision of those services, including some consequences of failing to pay a fee.

The Regulations prescribe application categories, fees and application procedures to applicants seeking a new or amended inclusion in the PBS or NIP. The Regulations also provide for the exemption from fees, waiver of fees, and for review rights and procedures. The fees and procedures are administered by the Department.

PBAC

PBAC is established under section 100A of the Act and is an independent expert body appointed by the Australian Government. Members include doctors, health professionals, health economists and a consumer representative. Its primary role is to recommend new medicines for listing on the PBS. No new medicine can be listed unless the committee makes a positive recommendation. PBAC holds three scheduled meetings each year, usually in March, July and November.

When recommending a medicine for listing, PBAC takes into account the medical conditions for which the medicine was registered for use in Australia and its clinical effectiveness, safety and cost-effectiveness (‘value for money’) compared with other treatments.

PBAC has two sub-committees to assist with analysis and advice in these areas. They are the:

Economics Sub-Committee (ESC)
which assesses clinical and economic evaluations of medicines submitted to PBAC for listing, and advises PBAC on the technical aspects of these evaluations; and
Drug Utilisation Sub-Committee (DUSC)
assesses estimates on projected usage and financial cost for medicines. It also collects and analyses data on actual use (including in comparison with different countries), and provides advice to PBAC.

Roles of PBAC

PBAC performs the following roles:

recommends medicines and medicinal preparations to the Minister for Health for funding under the PBS;
recommends vaccines for funding under the National Immunisation Program (since 2006);
advises the Minister and the Pharmaceutical Benefits Pricing Authority about cost-effectiveness (‘value for money’);
recommends maximum quantities and repeats on the basis of community use, and any restrictions on the indications where PBS subsidy is available;
regularly reviews the list of PBS items; and
advises the Minister about any other matters relating to the PBS, including on any matter referred to it by the Minister.

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Requirements of Section 99YBC of the Act

a) Extent and timeliness of the provision of relevant documents to responsible persons

Section 99YBC(5)(a) of the Act requires that the Minister report to the Parliament on the extent and timeliness of the provision of relevant documents to responsible persons. PBAC provides responsible persons with documents relevant to their submissions in an orderly, timely and transparent fashion. This is achieved through the well established practice of providing responsible persons with documents relevant to their submissions six weeks before the applicable PBAC meeting. These documents are referred to as “commentaries”.

The applicant is then provided by the PBAC Secretariat with the pre-sub-committee response five weeks before the relevant PBAC meeting. Following the meeting of PBAC sub-committees the PBAC Secretariat provides relevant sub-committee papers to responsible persons two weeks before the relevant PBAC meeting. Sponsors then provide their responses to the PBAC Secretariat one week before the relevant PBAC meeting. Following the PBAC meeting the PBAC Secretariat provides verbal advice on the outcomes of PBAC consideration to the relevant sponsor half a week after the meeting, with written advice provided to sponsors three weeks after the relevant PBAC meeting.

Where requested, the PBAC Secretariat, PBAC and its sub-committees provide informal access to its officers and formal access to PBAC and its sub-committees, including appearing before PBAC in person, for responsible persons or their representatives.

b) Extent to which responsible persons comment on their commentaries

Section 99YBC(5)(b) of the Act requires that the Minister report to the Parliament on the “…extent to which responsible persons exercise their right to comment on these documents, including appearing at hearings before the Pharmaceutical Benefits Advisory Committee;”

As is usual practice, during 2009-10 PBAC held three meetings with a total of 73 major submissions. For the:

July 2009 PBAC meeting all 22 responsible persons who lodged major submissions responded to their commentaries;
November 2009 PBAC meeting all 28 responsible persons who lodged major submissions responded to their commentaries; and
March 2010 PBAC meeting all 23 responsible persons who lodged major submissions responded to their commentaries.

Consequently, of the 73 major submissions considered by PBAC in 2009-10, all responsible persons exercised their right to respond to their commentaries.

Number of Responsible Persons Seeking a Review of PBAC Recommendations

Section 99YBC(5)(c) of the Act requires that the Minister report to the Parliament on the “… number of responsible persons seeking a review of the Pharmaceutical Benefits Advisory Committee recommendation.”

During the 2009-10 financial year, there were no requests to PBAC for an Independent Review.

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Number and category of applications for each PBAC meeting in 2009-10

Table A2.1: July 2009 PBAC Meeting

Category	Number	Comments
Major	22
Minor	48	Included 9 secretariat listings¹
Generic	0

Table A2.2: August 2009 Special PBAC Meeting

Category	Number	Comments
Major	0
Minor	3

Table A2.3: September 2009 Extraordinary PBAC Meeting

Category	Number	Comments
Major	0
Minor	1

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Table A2.4: November 2009 PBAC Meeting

Category	Number	Comments
Major	28
Minor	45	Included 13 secretariat listings¹

Table A2.5: March 2010 PBAC Meeting

Category	Number	Comments
Major	23
Minor	46	Included 11 secretariat listings¹

Table A2.6: April 2010 Special PBAC Meeting

Category	Number	Comments
Major	0
Minor	1

Withdrawn applications for each PBAC meeting in 2009-10 by category and reasons for withdrawal of applications for each meeting

Table A2.7: July 2009 PBAC Meeting

Category	Number	Reasons for withdrawal
Major	2	Decision by applicant – no reason provided
Minor	1	Decision by applicant – no reason provided

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Table A2.8: November 2009 PBAC Meeting

Category	Number	Reasons for withdrawal
Major	2	One submission failed to gain a positive TGA Delegate’s overview One submission was withdrawn by applicant – no reason provided
Minor	1	Sponsor reached agreement on pricing based on an earlier recommendation

Table A2.9: March 2010 PBAC Meeting

Category	Number	Reasons for withdrawal
Major	0	n/a
Minor	0	n/a

Number of responsible persons that responded to their commentaries, including appearing before PBAC meetings

Each responsible person who submitted a major submission to PBAC during 2009-10 responded to their commentary.

Table A2.10: July 2009 PBAC Meeting

Number of major submissions	Number of Responsible persons that responded to their commentaries	Number of responsible persons that appeared before PBAC
22	22	12

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Table A2.11: November 2009 PBAC Meeting

Number of major submissions	Number of Responsible persons that responded to their commentaries	Number of responsible persons that appeared before PBAC
28	28	9

Table A2.12: March 2010 PBAC Meeting

Number of major submissions March 2010 PBAC Meeting	Number of Responsible persons that responded to their commentaries	Number of responsible persons that appeared before PBAC
23	23	7

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Number of pre-submission meetings held in 2009-10

Table A2.13: Number of meetings held in 2009-10

Pre-submission Meetings per Month	Meetings Held
2009
July	3
August	12
September	3
October	2
November	1
December	2
2010
January	2
February	3
March	3
April	12
May	6
June	3
Total	52

¹Secretariat listings are not considered as a separate agenda item at a meeting of the Committee as they are very minor amendments to existing listings. However, all secretariat listings are still decided by the Committee on the merit of each application.

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