The industry should be concerned about the proposed streamlined pathway for cost-minimised submissions to Australia's health technology processes.
The process, which would apply to around 80 per cent of all therapies navigating the process, potentially represents the single biggest destruction in the value of therapeutics in PBS history.
The HTA Review report recommends a streamlined process for cost-minimised therapies. One option is to avoid a full evaluation and go straight to price negotiation.
Be under no illusion. There is no world in which the government adopts this process without savings. Savings are the point.
The report establishes this as the trade-off for other changes, including the bridging fund and new approaches for medicines of high therapeutic value for conditions with high unmet clinical needs.
In other words, it is fantasy to think the industry can progress its priorities without accepting the savings pathway for cost-minimisation listings. Assistant Health Minister Ged Kearney made that abundantly clear in her address to Pharmaus.
Companies need to consider the implications.
Listing these medicines would be accelerated in return for price reductions and related savings. As a condition of listing, they would become the lowest-cost comparator, with the related savings to the government maximised by the impact of reference pricing.
It is the formal adoption of buying your way onto the PBS.
The policy would establish a shuddering cascade of regular price reductions through the PBS. Companies would confront an environment that is impossible to predict, and that could make the current regime of statutory price reductions a sidebar.
Patients and clinicians should not think they will be immune from the implications.
The direct and indirect consequences for dozens of medicines yearly will be companies opting out of the listing process, withdrawing, refusing outcomes, and delisting medicines.
Imagine a scenario where a company with a cancer medicine, in a class where all are administered intravenously, seeks the listing of a subcutaneous form. Would the company pursue listing this form, which has clear advantages for patients, if it was forced into the streamlined cost-minimisation pathway?
Of course, in the words of Assistant Minister Kearney, this is the point. In her own words, this form's marginal benefit would undermine the government's ability to fund life-changing medicines.