Journal of the New Zealand Medical Association, 25-November-2011, Vol 124 No 1346
Access to new medicines in New Zealand compared to Australia
Michael Wonder, Richard Milne
Access to new medicines is an ongoing public health issue in most developed countries. Many new medicines are costly and unaffordable for many patients; therefore public access is very limited. Governments are under continual pressure to provide timely access to new medicines, many of which are costly.
In New Zealand (NZ) the governmental Pharmaceutical Management Agency (PHARMAC) manages purchasing of pharmaceuticals on behalf of District Health Boards (DHBs) following their registration by Medsafe. PHARMAC develops and maintains the NZ Pharmaceutical Schedule (the ‘NZ Schedule’) of pharmaceuticals available in the community on prescription by a medical doctor, dentist, registered midwife, designated nurse practitioner or optometrist, and partly or fully subsidised from a national pharmaceutical budget. It also includes some pharmaceuticals purchased by DHBs for use in their hospitals, for which national prices have been negotiated by PHARMAC.1
In Australia, pharmaceuticals that are subsidised by the Federal Government are listed in the Schedule of Pharmaceutical Benefits (the ‘Australian Schedule’) and funded by the Pharmaceuticals Benefits Scheme (PBS) following their registration by the Therapeutic Goods Administration (TGA). A PBS prescription must be written by a doctor, a dentist, an optometrist, a midwife or a nurse practitioner. There are separate arrangements for PBS prescriptions in certain public hospitals in most States.2
New prescription-only medicines become available after the results of their Phase 3 clinical trials become known and pharmaceutical suppliers make submissions to the NZ and Australian governments for public funding. In NZ, decisions on listing, indication, subsidy levels, prescribing guidelines and conditions are made by the Board of PHARMAC with input from its Pharmacology and Therapeutics Advisory Committee (PTAC), its specialist sub-committees, the Hospital Pharmaceutical Advisory Committee (HPAC) and PHARMAC staff.
In Australia, a statutory body called the Pharmaceutical Benefits Advisory Committee (PBAC) reviews all submissions by pharmaceutical suppliers. The PBAC then makes recommendations to the Minister for Health and Ageing on the listing and subsidisation of medicines in the Australian Schedule. Restrictions may be applied to limit the use of medicines to certain registered indications.
The aim of this study was to compare access to new prescription-only medicines in NZ with Australia in the period January 2000 to December 2009. For the purposes of this analysis we define ‘access’ to a new medicine in NZ or Australia as listing in the respective Pharmaceutical Schedule.3,4
A ‘new medicine’ was defined as:
This definition includes a medicine that was registered some time ago, only to be deregistered and subsequently reregistered (ostensibly for use by a different patient population).
The analysis excluded any existing medicine in the same presentation that was subsequently reimbursed for use by a different patient population (i.e. a new indication). It also excluded any existing medicine that was given access to a wider patient group, but in the same indication (e.g. moved from second-line to first-line use).
The following were also excluded from the analysis:
For Australia, we examined serial editions of Section 2 (Ready-Prepared Medicines) of the Australian Schedule issued during the study period to identify new medicines and their respective dates of reimbursement. Medicines listed only in Section 4 (Extemporaneously-Prepared Medicines) or the Repatriation Schedule of Pharmaceutical Benefits were excluded. New combination products were also excluded from the sample as we assumed that patients should be able to access the respective components separately. Vaccines and medicinal products, such as test strips and infant formulae, were also excluded.
A medicine was considered to be ‘new’ if its first listing in the Australian Schedule occurred no more than 10 years after its initial registration by the TGA. This was done to exclude medicines that were likely to be out of patent in Australia when they were first listed in the Schedule.
TGA registration dates are not readily available. When the initial registration date for a medicine could not be determined, the on-line version of the Australian Register of Therapeutic Goods (ARTG) was used to determine the date a medicine was first entered into the register; this date was used as a proxy for the TGA registration date. Medicines are generally entered in the ARTG within days of registration.5 The core data set for Australia comprised new prescription-only medicines that were first listed in the Schedule in the study period.
Serial issues of the NZ Schedule were then searched for medicines in the core data set. A medicine listed in the NZ Schedule was considered to be the same medicine as that listed in the Australian Schedule if its registered form was the same chemical entity in the same or similar registered form. Tablets and capsules were considered to be sufficiently similar, and differences in registered dosage were ignored. A medicine listed in NZ was deemed to be different from that listed in Australia if it was available in a different presentation for use by a different patient population.
A new medicine was considered to be ‘accessible’ in New Zealand if it was listed in Section B (Community Pharmaceuticals) and/or in Part II (Pharmaceuticals Under National Contract) of Section H. Accessible medicines also include oncology products included in Part V (Pharmaceutical Cancer Treatments) of Section H (Hospital Pharmaceuticals) in the period January 1, 2000 to June 30, 2008 or into Section B or H after June 30, 2008. It was considered to be ‘accessible’ in Australia if it was listed in the Australian Schedule. A medicine listed in the NZ Pharmaceutical Schedule only under ‘Special Access’ provisions (i.e. reimbursed despite not yet being registered) was not considered to be ‘accessible’ as there are no such provisions in Australia.
The New Zealand Gazette and Data Sheets (Consumer Medicine Information) were examined to determine the registration status of all medicines in the core data set. Data Sheets were also used to determine which medicines in the core data set were prescription-only in New Zealand.6
The date that a medicine first appeared in the New Zealand Gazette was considered to be its registration date. Medicines in the core data set that have been reimbursed in NZ comprised the common data set.
The following descriptive analyses were performed on the medicines on the common data set.
The medicines in the core data set that were reimbursed only in Australia in the study period (unique data set) were then analysed by their ATC main group and therapeutic area (reimbursed use).
Finally, listings of all the new, prescription-only medicines that were reimbursed in NZ were compared with listings in Australia in the study period.
Single sample t-tests of differences were used for between-country comparisons of registration dates, reimbursement dates and the time from registration to listing. Analyses were conducted as two sided tests with an α of 0.05, using GraphPad.8
Breadth of access—136 new, prescription-only medicines (core data set) were listed in the Australian Schedule in the study period (Table 1).
Table 1. New medicines listed in the Australian Schedule of Pharmaceutical Benefits in the period 2000–2009
a WHO ATC classification system.
Another medicine (troglitazone) was listed in the 1 May 2000 issue of the Schedule but it was deregistered before the listing took effect.
Timeliness of access—Table 2 shows all 59 medicines that were listed in both NZ and Australia in the period 2000-2009 (common data set; Table 2).
((view Table 2 and Table 3 here))
Registration occurred on average sooner in Australia than in NZ (mean difference 9.0 months; 95% CI 3.6 to 14.4 months; p=0.0012). 43 (73%) of the 59 medicines in the common data set were registered in Australia before NZ and 53 (90%) of the 59 medicines in the common data set were reimbursed in Australia before NZ (mean difference 32.7 months; 95% CI 24.2 to 41.2 months; p<0.0001).
Importantly, the lag between registration and listing was almost 2 years longer in NZ than in Australia (mean difference 23.7 months; 95% CI 14.9 to 32.4 months; p<0.0001).
Earlier registration of ursodeoxycholic acid, dorzolamide and ezetimibe in NZ was followed by earlier reimbursement. In the case of four medicines in the common data set (pravastatin, meloxicam, donepezil and levetiracetam), their listing in the NZ Pharmaceutical Schedule was so delayed that the first entrant was a generic brand.
77 medicines of the core data set were reimbursed only in Australia in the study period (unique data set; Table 3). They encompass most therapeutic areas; the largest group is WHO ATC Main Group L (anti-neoplastic and immunomodulating agents) with 15 (20%).
Limited access to new medicines in NZ cannot be attributed to non-registration because 64 (84%) of the new medicines registered in Australia are currently registered in NZ. The medicines in the unique data set that are not registered in NZ have not been reimbursed by way of ‘Special Access’ provisions.
Other new medicines listed in NZ—In total, 80 new prescription-only medicines were listed in the NZ Pharmaceutical Schedule in the period 2000–2009. Excluding the 59 new medicines listed in both countries during this period (see Table 2 above), most of the remainder were registered in Australia prior to the study period and two (rizatriptan and mirtazipine) were registered in Australia subsequent to the study period. Five new medicines were reimbursed in NZ but not in Australia (Table 4).
Table 4. New medicines listed in NZ during the study period, and their reimbursement status in Australiaa
a Excluding those listed in both countries during 2000-2009 (Table 2); b Intra-uterine device (Mirena) listed for heavy menstrual bleeding but not contraception in NZ; c Unregistered medicine
Inclusion of levonorgestrel in the form of an intrauterine device to prevent heavy menstrual bleeding (Mirena) is perhaps controversial, as levonorgestrel (in tablet form) was already listed in the NZ Schedule as a contraceptive (Microlut). Nonetheless, the tablet form is listed for systemic use as a contraceptive whereas the IUD is listed for localised slow release of levonorgestrel to prevent heavy menstrual bleeding. Levonorgestrel (as Mirena) was first listed in the Australian Schedule for use as a contraceptive device on 1 February 2003. It was not considered to be a new medicine, as the tablets were already listed in the Australian Schedule for use as a contraceptive.
The PBAC recommended the listing of ropinirole for the treatment of Parkinson’s disease at its December 1997 meeting; however, it remains unreimbursed because its sponsor decided not to proceed with the listing. An application to list ropinirole for the treatment of patients suffering with severe primary restless legs syndrome was rejected by the PBAC in March 2006.9
Anagrelide was first registered in Australia on 23 November 1999.5 At least 2 applications seeking its listing on the PBS have been rejected by the PBAC, the last in June 2003.10 Finasteride was first registered in Australia on 26 October 1993 but it has never been listed in the Schedule of Pharmaceutical Benefits.5 No application has been made since June 2003.9
Although pentostatin was designated as an orphan drug by the TGA on 15 May 2009, it remained unregistered as at December 2010.5,11
Over the previous 10 years, the NZ public has been given access through Government funding to less than half of the new medicines that have been reimbursed in Australia. The remaining 77 new medicines that are reimbursed in Australia but not in NZ cover a wide range of therapeutic areas, including some diseases for which there are no reimbursed medicines in NZ. For the new medicines that were listed in both countries, registration occurred on average 9.0 months later in NZ and listing occurred 32.7 months later, giving a 23.7 month difference in the interval between registration and listing (95% CI 14.9 to 32.4 months; p<0.0001). Sixteen of the new medicines listed in both countries (27%) were registered first in NZ but only three of these (ursodeoxycholic acid, dorzolamide and ezetimibe) were listed first in NZ.
Differences in access are probably due to both the financial constraints on the reimbursement agencies and the methods of assessment used. Both PHARMAC and the PBS aim to provide ‘value for money’; however, PHARMAC is legislated to operate on a capped budget1 whereas the Australian Government allows the expansion of the PBS budget in order to accommodate as many new medicines as can demonstrate clinical importance, clear evidence of effectiveness, affordability, cost-effectiveness and other qualities.12
PHARMAC assesses and prioritises new medicines against each other and against widened access to older medicines annually, and declines or defers listing of new medicines in the NZ Schedule in order to stay within its budget.1 The result for the NZ public is delays in listing of new medicines, an expanding list of new medicines that are acceptable but deferred, and more predictable pharmaceutical expenditures. In contrast, the PBAC judges each new medicine on merit, regardless of other medicines that are competing for the same budget.2 The result for Australia is better access to new medicines along with an expanding pharmaceuticals budget.
The methodologies for achieving value for money also differ. PHARMAC relies heavily on a wide range of relatively blunt commercial tools including reference pricing, expenditure caps, tendering for sole supply, multi product agreements, confidential rebates to suppliers and Special Authority provisions to restrict access.1 Whilst reference pricing and prior authorisation provisions are also used in Australia, deeds of agreement containing risk sharing arrangements are increasingly being used by the Government to manage financial risk and to contain PBS costs.13
Both the PBAC and PHARMAC take into account the cost-effectiveness of new medicines as one of several listing criteria. The PBAC Guidelines require suppliers to provide a detailed cost-effectiveness and budget impact analysis of each new medicine compared with the treatment most likely to be replaced in practice. These analyses are scrutinised by PBAC’s Economics Sub-Committee (ESC) comprised of academics and clinicians. Economic models are evaluated by the Pharmaceutical Evaluation Section (PES) in detail, including all clinical and economic data used to populate the model, its construction and the auditing of any formulae. Suppliers are given the opportunity to comment on the PES report before this goes to the ESC, as well as the opportunity to comment on the ESC report before it goes to the PBAC.14
In contrast, PHARMAC encourages suppliers of new medicines to provide detailed cost-effectiveness and budget impact analyses of their products, then undertakes (generally) rapid economic analyses in-house, comparing new medicines with submissions for other new medicines and widened access to older medicines.15,16 In short, while the PBAC evaluates each new medicine against current medical practice in a given therapeutic area, PHARMAC evaluates each new medicine against the range of funding options that are currently available to it across all medicines (old and new) and all therapeutic areas. Budget impact plays an important role in the listing decision in both countries.12,15
Since mid 2005, the PBAC has published all its decisions relating to submissions to list new medicines on the PBS in the form of public summary documents.17 PHARMAC has defended some of its decisions to list or decline to list certain new medicines (or classes of medicines) in the NZ Schedule, including some that are now listed in both NZ and Australia 18-29 and others that are listed only in Australia.30-36 However, most of PHARMAC’s listing decisions have not been open to public scrutiny except for a limited number of unpublished health technology assessments.
Restrictions in access to new medicines have an opportunity cost for patients in terms of preventable mortality and morbidity and potential quality-adjusted life year (QALY) gains forgone. PHARMAC has estimated QALY gains achieved by listing or declining to list selected new medicines29,37 but information is not available concerning the overall QALY gains and losses across all major funding decisions. Restricting access to new medicines also limits the opportunity to improve the overall efficiency of healthcare delivery through reducing hospital admissions and length of stay.38
On the other hand, expanded access to new medicines has a monetary opportunity cost. The cost of the PBS has increased steadily over the last decade39 whereas PHARMAC has been successful in containing growth in the community pharmaceuticals budget in the face of volume growth, by driving down prices and limiting access.40 Funds within PHARMAC’s budget that are preserved by limiting access to new medicines are used to widen access to other medicines, and funds that might have been allocated to pharmaceuticals can potentially be used for non pharmaceutical healthcare delivery.30
A secondary benefit to PHARMAC of deferring the listing of new medicines is that prices inevitably decline with time and they can fall precipitously when a generic ultimately becomes available.10 However, most of the medicines that are reimbursed in Australia but not NZ (Table 3) are unlikely to cause undue stress on PHARMAC’s budget. Only 4 medicines that were listed in Australia but not NZ (ranibizumab, rosuvastatin, rabeprazole and celecoxib) were in the top 50 highest PBS cost items for the year ended 30 June 2010.13
The results from our study have some limitations. We chose new prescription-only medicines as our study sample because they are a major focus of current public discourse on access to healthcare in both countries. We may well have obtained different results had we chosen a broader sample of medicines and medicinal preparations. We defined access as being listed in the respective national pharmaceutical schedules; we did not attempt to study the quality of access such as indications and patient groups. While the initial listing of most of the medicines in our study came with restrictions, we did not compare restrictions or examine whether restrictions were changed over time (within and/or across indications). These are all worthy areas of future research.
Our definition of access did not consider prescription costs because we were more interested in studying whether (and when) new medicines were listed than whether patients could afford the requisite prescription co-payment. When they are reimbursed, medicines are more affordable to the NZ patient because patient contributions are lower and 3 months’ supply may be dispensed for some medicines.3,4
We chose 2000-2009 as our study period rather than any single point in time. This strategy improved the size of our study sample and also showed that access to new medicines in NZ compared to Australia has been restricted and delayed over the recent decade.
Whilst others have also compared access to medicines in NZ and Australia (as well as in other selected countries), none have been as comprehensive as ours in terms of study sample and study period.
Danzon and colleagues recently published the results of their study on the impact of price regulation on the timing of the launch of new medicines in 25 major countries, including NZ and Australia. The study was conducted on 85 new chemical entities (NCEs). The outcome of interest was the launch date (i.e. the first possible date of supply), which could well be more of a registration issue than a reimbursement issue. Unfortunately, data limitations did not enable the analysts to distinguish between a delay due to market authorisation versus price/reimbursement approval.
The three countries that did not require price approval before launch had the highest number of launches. The USA led with 73 launches, followed by Germany (n=66) and the United Kingdom (n=64). At the other extreme, only 13 NCEs were launched in Japan, followed by Portugal (n=26) and NZ (n=28). Australia had 43 launches.41
A wide-ranging study (the Castalia Report) compared the number of new listings (new chemical entities, new products and new items) in Australia and NZ from June 1999 to June 2004.42 The results for NZ were poorer for all three categories. Whilst some aspects of the findings of the Castalia Report have been challenged, criticisms were not directed at the results on the access to new listings.43,44
Morgan and colleagues compared the centralised drug review processes in four Commonwealth countries, including Australia and NZ. They examined the outcomes of the listing decisions by comparing the subsidised access, cost and use of 17 of the world’s top-selling medicines in 2003 in each of the countries. They found that 15 of the 17 medicines were reimbursed in Australia whereas only 8 were reimbursed in NZ.45 One of these was a combination product and another was already available in both countries as a generic. These results have since been updated. All of the 17 medicines were reimbursed in Australia and 9 were reimbursed in NZ.46
Researchers from the Karolinska Institute in Sweden studied the market introduction and total sales of 67 oncology products in 25 countries including the USA, UK, Canada, Australia and NZ. Uptake was slower in NZ than in Australia and Canada, and comparable to or slower than the UK.47
Our results contrast with those from a media release by PHARMAC showing that as at March 2006, NZ had listed more unique therapeutic chemicals than Australia (267 versus 217). NZ also had more funded chemicals or formulations of the same chemical entity with distinctly different uses (e.g. ketoconazole tablets versus ketoconazole shampoo) [717 versus 655].48
The methods and definitions used by PHARMAC have not been published, however the differences in results between PHARMAC’s study and ours are not surprising given the differences in the questions being addressed and the study design. PHARMAC’s study: (a) considered access only at one time point; (b) included both new and old medicines; (c) included medicines and medicinal preparations, such as nutrients/special foods, vitamins, non-hormonal contraceptives, barrier creams, emollients, etc, (d) included multiple strengths of the same or similar presentations of the same medicine/medicinal preparation and (e) excluded hospital pharmaceuticals that were not listed in the community pharmaceutical schedule.
Finally, declining to list highly cost-effective pharmaceuticals because of a pharmaceuticals budget cap, as in NZ, implies that such pharmaceuticals are intrinsically less cost-effective than any non-pharmaceutical interventions that they might displace if they were funded. This implicit assumption is clearly unsupported because rigorous economic evaluation is not available for most non-pharmaceutical healthcare interventions. There is a case for the expansion of PHARMAC’s pharmaceuticals budget when highly cost-effective pharmaceutical interventions become available, rather than delaying listing indefinitely. PHARMAC would still benefit when the patent expires, and in the meantime patients would benefit.
Since 2000, the NZ public has been able to access fewer new medicines via its national medicines reimbursement programme than the Australian public. Access to new medicines in NZ is considerably slower than in Australia. The population health implications of the differences in access need further research.
Disclaimer: Any views expressed in this paper are those of the authors and do not necessarily represent the views or practices of Novartis and its affiliates.
Source of funding: Funding for RM was provided by Novartis New Zealand Ltd. Novartis took no part in the design, analysis or interpretation of results.
Disclosures of interest: MW was employed until recently by Novartis Pharmaceuticals Australia Pty Ltd., a pharmaceutical company that made numerous applications to the PBAC during the study period. RM has acted as a consultant to the Ministry of Health and PHARMAC and to various New Zealand companies that made submissions to these agencies.
Author information: Michael Wonder, Consultant Health Economist, Sydney, Australia; Richard Milne, Honorary Associate Professor, School of Population Health, University of Auckland; Managing Director, Health Outcomes Associates Ltd, Auckland, New Zealand
Correspondence: Michael Wonder, PO Box 470, Cronulla, NSW 2230, Australia. Fax: +61 (0)2 95015855; email: firstname.lastname@example.org
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