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A review group (including PBAC representatives), convened by the Parliamentary Secretary for Health to review aspects of the Committee's operations, had recommended that PBAC members should come from a broader range of constituencies, and that membership tenure should be limited. To ensure the continued effectiveness of the Committee, they also recommended a transitional phase for implementing the changes. Thus, the legislative amendment appeared innocuous and the principles had been agreed to.

So what is going on? Why would a government move against its own advisory committee in this way? Had the committees not been performing their legislated functions satisfactorily?

No one has claimed that the committees did not perform adequately. The PBAC received a supportive review by the Australian National Audit Office, and international commentaries have been generally favourable.^3-5 A recent independent review, part-funded by the pharmaceutical industry, commented positively on the general approach to the operation of the Pharmaceutical Benefits Scheme (PBS).⁶

A striking feature of the relationship between the present Government and the PBAC has been the Government's ambiguity. The committee chairs have been informed that the Government is concerned about the rising costs of the PBS ($3.2 billion in the 1999-2000 financial year, a 14% rise over the previous year⁷), but, at the same time, wishes to support the pharmaceutical industry.

The roles of the PBAC are spelled out in the National Health Act 1953 (Cwlth) (amended 1987).⁸ The principal task of the committee is to make recommendations regarding the listing of new drugs on the PBS. The PBAC is required by law to consider both "the effectiveness and cost of therapy involving the use of the drug"; the committee can not list a pharmaceutical product that is substantially more costly than alternatives unless it provides "a significant improvement in efficacy or reduction of toxicity over the alternative therapy". The current interpretation of the Act by the Federal Court allows a role for the PBAC in considering total costs to the community, including the financial impact of "leakage" (wide prescribing for patients not covered by the listed indications).⁹ The Act does not provide a mechanism for companies to appeal the substance of PBAC decisions, but they may seek a judicial review of the decision (as in the case brought by Pfizer Pty Ltd when sildenafil [Viagra] was not listed).⁹ Importantly, the PBAC places no limits on the number of resubmissions that it will consider. The evaluation methodology developed by the committees, with the strong support of the Department of Health and Aged Care, is rigorous in its evidentiary demands, and has withstood both administrative scrutiny and legal challenge.^3,9

Why has the Government sent mixed messages to the PBAC? A possible explanation is that it was under pressure from the international pharmaceutical manufacturers lobbying to have their products listed at higher prices on the PBS.¹⁰ Perhaps the PBAC is viewed as being too demanding, making recommendations that result in prices that set "undesirable" international precedents? It is difficult to get accurate information on the level of contact between the present Government and the pharmaceutical industry. However, in 1998, a Pharmaceutical Industry Working Group was formed, comprising the ministers of Health and Aged Care, and Industry, Science and Resources, and senior staff from the Australian Pharmaceutical Manufacturers' Association. This group has met regularly and been responsible for initiating reviews of PBAC activities.

Worldwide, the pharmaceutical industry has enjoyed a period of unparalleled profitability and influence. It has been among the best performers in the share market. Unlike other products of technology-based industries (eg, computers), the medicinal drug market has become a "sellers' market", with some new products offering only marginal clinical benefits at much higher prices than the agents they replace.

It may be difficult for the industry to sustain recent levels of growth in the face of increasingly critical purchasers around the world. Pharmaceutical benefits schemes like the one in Australia are being considered, or have been adopted, in other countries, including Canada, United Kingdom, Netherlands, Italy, Portugal, Sweden, Norway and Finland.^12,13 In response, some sections of the pharmaceutical industry have aggressively defended their positions, with tactics that have been widely criticised.^14-17 These have included legal challenges and threats to governments, advisory bodies and individuals in Canada, United States, United Kingdom and Australia.^9,18-23 In developing countries, the relentless pursuit of intellectual property rights has denied the rights of local manufacturers to produce much-needed drugs.^{11,15-17,24,25} The health needs of these countries receive scant attention, as companies prefer the more secure business of developing "me too" drugs, fixed combinations of existing agents, or drugs for the "problems" of affluent societies, such as hair loss or obesity.^11,14,24,25 It is significant that criticism has come, not from radical sources, but from conservative journals, such as The Wall Street Journal and the New England Journal of Medicine.^11,14 These are not judgements on the morals of the individuals who work for the companies, but rather the corporate culture that develops when there is widespread market failure and weak intervention by governments.²⁶

When faced with the lobbying powers of pharmaceutical companies with market values of hundreds of billions of dollars, advisory bodies such as the PBAC need the strong and unambiguous support of government, and a guarantee of independence. The Department of Industry, Science and Resources has a degree of responsibility to support the pharmaceutical industry, but many would consider that the Department of Health and Aged Care does not. The members of the PBAC deserve and need the Health Minister's support, even though their recommendations may sometimes be unpopular with the pharmaceutical industry.

But the Government can do even more. The reasons for the PBAC's decisions (positive and negative) should be available to everyone. Information that is truly sensitive, such as manufacturing details, should be protected, but a summary of data forming the clinical and economic case for listing, or not listing, a drug (with the arguments and reasoning behind the PBAC's final recommendation) should be placed on the PBS website.²⁷ Interested parties should be free to criticise these decisions, and the PBAC should be able to respond publicly and, if justified, to modify its recommendations. Presently, such openness is prevented by secrecy provisions in the National Health Act and has been opposed by industry.

Where should the medical profession stand on these issues? The PBAC committees' roles and activities need to be better communicated to health professionals and consumers. Doctors should be well represented on the "new" PBAC through nominations from the Colleges, the Australian Medical Association and the Doctors' Reform Society. Doctors, particularly specialists, sometimes lobby the PBAC to have new drugs listed. When unsolicited and motivated by concern for patients such approaches are welcome, particularly if they contain arguments based on evidence and experience. However, some letters appear to have ghost authors; this is inappropriate, particularly if the issue is a dispute over pricing rather than interpretation of clinical data. Some doctors may perceive their responsibility to patients as consistent with a close relationship with industry, for instance through membership of "advisory panels". In reality these roles are often in conflict.

In the past decade the medical profession has become enmeshed to an unprecedented extent in the affairs of the drug manufacturers. This was exemplified by the difficulty experienced recently by the New England Journal of Medicine in locating an independent editorialist to comment on a therapeutic trial.²⁸ Perhaps the time has come for a searching review of the ethics of relationships between the medical profession and the health industry in Australia. Perhaps, if the profession develops a different view of its responsibilities to the community, we may read letters from doctors criticising the inordinate prices requested by drug companies, rather than complaining when the PBAC does not accede immediately to their demands for a drug's listing on the PBS. Considering the recent imbroglios accompanying the changes to the PBAC, the Government might wish to more fully inform the medical profession and the community on the reasons for these changes and whether it wants a fundamental change in the Committee's role.

David A Henry
Past Chair Economics Sub-Committee of the Pharmaceutical Benefits Advisory Committee
Professor of Clinical Pharmacology, University of Newcastle, NSW

Donald J Birkett
Past Chair, Pharmaceutical Benefits Advisory Committee
Professor of Clinical Pharmacology Flinders University of South Australia, SA

1. Meddling with drugs [editorial]. The Sydney Morning Herald 2000; 2 Dec.
2. Drugs scheme has its benefits [editorial]. Australian Financial Review 2000; 13 Dec.
3. The Auditor-General Audit Report No. 12, 1997-98: Peformance Audit -- Pharmaceutical Benefits Scheme, Department of Health and Family Services. <http://www.anao.gov.au> (accessed February 2001).
4. Cookson R. ASTEC non-EU case study on Australia. London: LSE Health, London School of Economics, 2000 <http://www.lse.ac.uk/Depts/lse_health/res_ projects/oz.pdf> (accessed February 2001)
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8. National Health Act (1953, amended 1987). <http://www.austlii.edu.au> (accessed February 2001).
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22. Rennie D. Thyroid storm. JAMA 1997; 277: 1238-1243.
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25. Silverstein K. Millions for Viagra. Pennies for the poor. The Toronto Star 1999; 13 Aug.
26. Mansfield P. Sickening sales pitch of the drug marketers. The Sydney Morning Herald 2000; 3 July.
27. Department of Health and Aged Care. Pharmaceutical Benefits Branch. <http://www.health.gov.au/haf/docs/pbacrec.htm> (accessed February 2001).
28. Angell M. Is academic medicine for sale? N Engl J Med 2000; 342: 1516-1518.

©MJA 2001