Interview - AMA President, Dr Bill Glasson, with Richard Glover, ABC 702 'Drive' - Pharmaceuticals under the FTA
GLOVER: It might be the medicines you use become more expensive because of this free trade deal with the US. To explore that I'm joined by the President of the AMA, the Australian Medical Association, Doctor Bill Glasson. Good afternoon.
GLASSON: Good afternoon, Richard.
GLOVER: Bill, can we start right from the beginning, can you give us a bit of an idiot's guide as to how the drug system works in this country and how different it is from how it works in other countries?
GLASSON: Essentially in Australia - which has a unique system I suppose, which a lot of countries are trying to emulate, the reason being is it delivers drugs at a much more reduced price or competitive price as opposed to the rest of the world. So simply if you want to list a drug a drug company goes to this organisation called PBAC, which is the Pharmaceutical Benefits Advisory Committee. They look at the drug, they look at how effective that drug is, they look at what other drugs are on the market that are equivalent, I suppose, in its treatment, and also look, obviously, at the price, what it's going to cost to the community.
GLOVER: OK, and they will only let it in the door if it ticks all those boxes.
GLASSON: Exactly, exactly. If it's a good drug and obviously if it's a drug that's outstanding and there's no other drug comes near it then obviously the price might be not - will be the sort of second issue. But obviously if there's two drugs the same, they have much the same effect but one is half the price of the other then obviously they will fund the drug that's somewhat cheaper.
GLOVER: And the result of that is in other countries people are producing a new asthma cure which is not much different from the other asthma cure but charging twice as much for it they can't do that here.
GLASSON: Exactly. We've got the sort of reference pricing system in Australia that tends to keep drugs at a pretty - in a more acceptable price I suppose.
GLOVER: Of course you can still buy the drugs outside the scheme, can't you, but you won't get any- -
GLASSON: You can, exactly. Essentially if you want to buy outside the government's supported scheme then you can, as you say, pay the open market price for them.
GLOVER: OK. Some people say the scheme means drugs are a bit slower to come to this country and some, of course, don't get supported when people feel they should be supported.
GLASSON: I think that's right, Richard. I think at the end of the day we've got to look at the process that currently operates, and it is a little bit slow. Often drugs that we know are effective and are in need can be sort of six to twelve months behind - you know, availability behind what's available, say, in the States for instance.
GLOVER: Obviously the big pharmaceutical companies don't like the PBS scheme because it means that they have to negotiate on price instead of just putting it up to the market.
GLASSON: That's exactly right and so I think that's where this whole issue is arising as to what is the best mechanism that we should have in place to ensure that the public of Australia get the best drugs available but at the same time they get them at appropriate timing and at an appropriate price.
GLOVER: At an appropriate price. Now the fear right from the beginning - well, one of the fears about the free trade deal with the US is that it might impact upon this scheme, that it might give the big pharmaceutical companies some right to challenge this rather anti-competitive process, I suppose.
GLASSON: That's exactly right and I think that was one of the thrusts. Certainly an initiative of this free trade agreement was that the major drug companies around the world wanted to break this nexus, I suppose, happening where the government actually sort of sets a floor price for these drugs, and you could argue it's a competitive world, why not get out there and deal competitively.
But in reality you're talking about people's health here, you're talking about making sure that the mums and dads and all the kids out there can access drugs at an affordable price, so as you're not talking about selling oranges or apples, you're talking about people's lives here and I think that's the reality.
GLOVER: OK. Let's come to the nub of it. You've now had a chance for the first time to look at the detail of the text of the free trade agreement, do you think it will impact upon the PBS?
GLASSON: It's like a thesis, Richard, to be honest with you, and interpretation, interpretation, what it actually means. I mean to put it very simply from what we can read there will be an independent review panel. In other words what will happen is this pharmaceutical advisory group will advise a drug that's on or off. If it's off- -
GLOVER: In other words that's the current system.
GLASSON: Yes, but now there's going to be another panel yet again, so from the Pharmaceutical Advisory Committee if it's rejected then it can go to this independent body. Now, who makes up this independent body? We don't know.
GLOVER: Is it an Australian dominated body?
GLASSON: That's the point, we don't know. There is yet another committee called the Inter-Governmental Medicines Working Group, which is made up of both American and Australian personnel, and I presume that they will be the ones appointing this independent review group. If that being the case what I want to know is once this review panel has made a decision where does it go from there? Does it go back to PBAC, or does it go to the Minister, or where does it go?
GLOVER: That sounds as if we'll have American people deciding what the Australian taxpayers pay for.
GLASSON: Well, that's one of our concerns obviously. Our concern is that this process is not taken out of our hands. The concern is obviously that some overseas country, such as the US in this situation, doesn't actually start to interfere with the health system and certainly the PBS system that we cherish and will support.
GLOVER: But as you read it at the moment, and it is early days and they are complicated documents, but as you read it at the moment the Americans will be able to at least fill some of the seats on this appeal body.
GLASSON: Richard, we don't know. The reality is when you read the document it doesn't tell you that and nobody will actually tell us at this stage. So what we're asking is what have they actually truly agreed upon, if they have, and that we'd like some input as to say then: Listen, this is how we think it should operate. If you start getting overseas or other people outside the system on these various committees then I'm afraid that we'll start to lose control.
GLOVER: Exactly, and someone can come along and say: Look, this hard drug even though it costs $1,000 a go is two per cent better than the one currently on the market, we're going to approve it. And the Australian taxpayer is left with the bill.
GLASSON: Exactly, that's exactly right. And what will happen when we're left with the bill some other drug that we desire we won't be able to afford, and so the reality is there's a trade-off here and you've got to try and determine what is the most effective drug for the most effective price.
GLOVER: OK. It seems incredible that we can't quite work out what's in the document though.
GLASSON: No. The trouble is it's in sort of political speak - you know how they write these documents - and the interpretation is probably yet to be determined as far as who actually makes up these committees, who actually appoints these people, who are they are responsible - you know, who they report to.
GLOVER: I guess the idea of having an appeal body isn't in itself a bad idea.
GLASSON: No, certainly not. The appeal body I think we would support and obviously I would have thought there'd be some mechanism in place now, and obviously we'd like to have that determination taken back to the pharmaceutical advisory group because that is made up of experts - they're Australian experts, they're very skilled and very qualified - and if they're going to have yet another panel who's actually going to make - you know, what makes up this panel?
GLOVER: Yes. Just hang on for a second, Bill. Janine has rung. Good afternoon, Janine.
CALLER: Hi. This greatly concerns me, Richard, because I have MS, multiple sclerosis, and I'm on a drug that if it wasn't on the PBS it would cost be about $12,000 a year.
GLOVER: And you're worried, I guess, that if costs on the PBS blow out then the government and the public will lose interest in it.
CALLER: Yes. I had to wait for the drug to put on the PBS to be able to afford to go on it and if I don't stay on the drug my MS could get worse, I could end up in a wheelchair or further.
GLOVER: Yes, and that same drug do you know what it costs overseas, does it cost more?
CALLER: I don't know what it costs in America but it costs the government $12,000 a year and they subsidise it so it only costs me $23 a month.
GLOVER: That's interesting. Bill, a lot of these drugs do cost more in other countries, don't they?
GLASSON: They do and Janine is right. I mean if we don't have this scheme and preserve this scheme patients like Janine in her situation with MS obviously that is a lifesaving drug for her.
GLOVER: But the crucial thing, it seems to me, is at the moment we are getting a bargain out of these foreign drug companies which other countries aren't getting. Hooray for us.
GLASSON: That's true, we probably are and that's why the drug companies don't like it. The drug companies don't like it because, as you know, they do make billions of dollars worth of profits and I think they foresee that the Australian market could even be more lucrative if they're given sort of open access to it.
But look at what happens in the States. The reality is that the health system over there if you've got plenty of money you can afford it, but 40% of the population get what I'd describe as rather second rate health care.
We've got the best system in the world. We've got the best medical system and pharmaceutical system in the sense it supports people who really need the treatment in this country and at an affordable price.
GLOVER: Well, we'll see as they go over the fine print in coming days what we reckon the system is. Bill, thank you very much for your time.
GLASSON: Richard, my pleasure, and good afternoon to you.
Ends