If the industry and sponsors do not enforce their legal rights under PBS cost-recovery regulations, the door will be opened to permanently adopting PBAC submission prioritisation.
The PBS cost-recovery regulations strongly favour sponsors by embedding significant rights in the submission, evaluation, pricing, and listing processes.
The regulations impose significant obligations on the health department.
The explicit purpose of the notice of intent is to "ensure that the Department is able to resource and prepare to assess the application effectively once the application itself is provided."
Its claim that it does not have the resources required to evaluate the submissions belies its legal obligations.
In other words, bad luck.
It has to find the resources. Alternatively, it could truncate the evaluation process.
In the regulations, it cannot unilaterally decide to defer the evaluation and consideration of submissions, where the sponsor meets their legal obligations. The only basis for refusing to accept a submission is when a sponsor does not pay the relevant invoice or where the submission "is incomplete and does not contain the information required for PBAC consideration."
Yesterday, the health department started issuing invoices to sponsors impacted by the attempt to defer submissions. The invoices were issued less than 24 hours after the health department wrote to the sponsors attempting to defer PBAC consideration of their submissions.
The invoices clearly state that the fees, which in some cases exceed $200,000, relate to submissions to the March 2025 meeting. The payments are due in 28 days. The health department is attempting to defer the consideration of these submissions to an unspecified future PBAC meeting.
The invoices cite the cost-recovery regulations.
The regulations require the health department to issue these invoices now because the sponsors have not withdrawn their notices of intent to lodge a submission.
If a sponsor lodges a notice of intent to submit to a meeting, pays the relevant invoice, and lodges the submission by the cut-off date, the regulations require that it be evaluated and considered at the PBAC meeting specified in the notice of intent.
Sponsors with submissions the health department wants to defer should submit by the early November cut-off. In lodging their submission, they must assert their expectation it will be evaluated and considered at the March PBAC meeting, consistent with the cost-recovery regulations.
This assertion is critical.
The health department's letter to sponsors attempting to defer the consideration of their submissions is very carefully worded.
The department's letter is a not so subtle attempt to navigate its legal obligations while convincing sponsors not to submit their submissions to the March 2025 meeting before the November cut-off date.
Put simply, the department is relying on sponsors falling for the language and not submitting by the November cut-off. The language is a trap.
Some might argue that the industry and sponsors should adopt a conciliatory approach on this issue.
Why?
Where was the health department's conciliatory approach? They identified this issue, constructed a plan without consulting impacted stakeholders, and then deployed its preferred approach that basically relies on the credulity of sponsors. Their letter, which is an intentional trap, reveals how little respect they have for sponsors.
The fact remains that this is a regulated cost-recovered process that imposes significant obligations on the health department, which they are now seeking to avoid using very disingenuous language.
The department's claim that the 'independent expert' PBAC can set its own agenda is false. The committee can defer an outcome on an evaluated and considered submission. It does not have the legal power to override the obligations established in the cost-recovery regulations. The department is just attempting to hide behind the PBAC on this deferral issue, risibly using it as a fig-leaf of defensibility.
If sponsors do not formally enforce their legal right by lodging their submissions before the cut-off date with the proper language, it could become virtually redundant going forward, opening the door for the permanent adoption of submission deferrals in the PBS evaluation and listing process.
The department says the PBAC will consider 32 submissions at its March meeting, with 45 held over. How will it consider these 45 plus the dozens of new submissions in July? Sponsors planning submissions for July and November should be alarmed.
If this power is not enforced, the next iteration of cost-recovery regulations will look very different and could fundamentally and permanently alter access to medicines.
The risk is that a submission deferrals process is just an updated and more effective version of the short-lived post-PBAC deferrals processes adopted by a former Labor Government.
The industry, sponsors and patients need to contemplate the wider implications of this issue.
Much talk exists around the average 460-day timeline between regulatory approval and reimbursement. Would 460 days between a PBAC submission and its evaluation work for you? This is precisely the timeline confronting sponsors of most submissions to the March 2025 PBAC meeting.
