Between Leadership and Dependence: Australia's HTA System Under Pressure

[Music] Welcome to Cognizzo, the podcast of Life Sciences Australia. I'm your host Tim Boyle, Australia sits in an unusual position in the global medicine system. We are widely regarded as a leader in health technology assessment with a rigorous approach to clinical and cost effectiveness that other countries study closely. We are also, at the same time, a small market that benefits from innovation funded very largely somewhere else. Those two things sit in tension, and that tension is now sharper than it has been for years. With pricing pressure building internationally and a domestic reform process still working through its recommendations. For our sector, this is not an abstract policy argument. It shapes which products get submitted, which get launched, how long patients wait, and whether a global portfolio decision includes Australia at all. The single biggest one there was the viewpoint of Australia's kind of launched tier. So, government very much still saw Australia as a tier one launched market. They believe that the PBC gives a guaranteed market, and also the YouTube and clinical trials in Australia is helpful to keep Australian in that tier one mindset for global. Farmer, however, had a different perspective on this, and they really felt that the launch attractiveness of Australia had fallen dramatically in the last couple of months. That is the fault line running through this entire discussion. Government stakeholders and pharmaceutical sector leaders looking at exactly the same system and reaching opposite conclusions about how attractive Australia now is as a place to launch a medicine. This episode sets out the findings of an independent research study into Australia's health technology assessment process, and what that process is doing to patient access and to innovation. Our presenter is Ella O'Neillane, who is currently working at New South Wales Health. The research she presents here was carried out entirely independently of that role. At the time she wrote it, she was employed as a strategy consultant at Monitor Deloitte, working across the life sciences sector and the broader health sector. And she completed the study as the dissertation for a master's degree in health economics and policy at the London School of Economics, from which she has recently graduated. Over the next half hour, you will hear how the study was designed, what 10 senior leaders across government and industry actually said when asked about the feedback process, where those two groups agree, where they diverge sharply, and what Ella recommends for policymakers, for government, and for the pharmaceutical sector. You will also hear the room push back on one of her findings. Before we get into the discussion, Cognitio is made possible with the support of our partners, whose backing allows us to bring this kind of conversation to the sector. I want to acknowledge the organizations that make our work possible. Our Platinum partners, Sincora Farmer Lex, CryoSight, Commercial Eyes, and Novotech. Thank you for supporting our community and our strategic partners, whose support helps us deliver webinars, podcasts, and events for you, CPS Insurance, CIO Farmer, Copyright Agency, Pack Air, Meksek, Akisa, HPG, Spruceon and Ferguson, the Kinghorn Cancer Centre, Medwise Consulting, Global Data, Nucleus Network, Linear Clinical Research, My Medical Department, Southern Star Research, Mills Oakley, On-Q Recruitment, Alithia Life Sciences, Central Pharmacy Logistics, Viva, Southern Clinical, HL Farmer, ResNet, and Data Farm Australia. Please support those that support your association, Life Sciences Australia. Back to the discussion and to the research itself. Ella opens by explaining where the work came from and what she set out to answer. Two things are worth holding in mind as you listen. The first is that this study focuses on the pharmaceutical benefits advisory committee pathway, rather than the medical services pathway, with the exception of highly-specialised therapies. The second is timing. The dissertation was completed in November of last year, which places it after the Health Technology Assessment Review reported, and while the Implementation Advisory Group was still working through its recommendations. She also sets out the International backdrop, including the lobbying pressure applied to the United States Administration, over the pricing policies of countries like Australia, Canada and the United Kingdom, and the prospect of most favored nation pricing. She then explains her method. Semisructured interviews with 10 senior leaders, three from government and seven from the pharmaceutical sector. Triangulated against literature. So, really, between leadership and dependence is a title of my thesis or dissertation, and that was really lucky at Australia's position in the Life Sciences sector, which I think is really interesting. Because Australia has this role as a cost-effectiveness leader, policy leader in that space, but there are also a beneficiary of the global innovation that goes on, and there's a dual dependency on both. And I really wanted to understand what were the impact of that kind of role, sitting in between of both of those on patient access and on innovation and new medications that might be available. To do that, I had a series of interviews, and I'll go through the kind of method and approach in just a moment. But before I do, I just wanted to make sure to display my matter. These reads, which was very much carried out independently of my current job at NSW Health, and I was employed by a monitored deloitte at a time of writing. So, working as a strategy consultant there, across the Life Sciences sector, and also at broader health sector as well. I did the dissertation as part of a Master's in Health Economics and Policy with the London School of Economics, which I recently graduated from. So, that's just a disclaimer. It's independent, my own research, independent kind of view on the problem at hand that we're discussing today. So, I'll get into just the context a little bit first. And I'm assuming this group has a pretty good knowledge of this, but I'll just make sure we're all kind of level-sash. So, obviously, access to pharmaceuticals is increasingly challenged in Australia, and I think that is a theme that's continued since I wrote this back in, I think it was November and last year, by complete of my dissertation. And that's due to the difficulties around the peer-back process, so I'm sorry, I'll also clarify, I'm largely focused on the peer-back as part of this study, so not MSAC focused on peer-back with the exception of highly specialized therapies. So, the kind of the peer-back processes are long, they often require multiple submissions. There's not really that kind of engagement within. It happens after the fact, which just makes the process a little bit difficult. And we've also got in Australia these relatively stringent pricing policies, where Australia really thinks about kind of clinical effectiveness, cost effectiveness, and then cost utility analysis, which isn't done to the same level of robustness in other countries around the world. So, the two of those together made that access piece pretty lengthy. The second piece there is that it has been picked up as a reform priority of government. I think prior to writing, it already been picked up and through the HTA review, which came out, I think, the year before, so September 2024. And obviously, there's an implementation advisory group who is looking at those recommendations that came out of that, and that reporter is due to come out soon, I believe. So, they are in looking at that reform roadmap, and the ideas that these findings would support that I'm helped to navigate around it as well. The third one that's really particularly interesting and really kicked off, I guess, while I was writing, is the pressure that Trump put on the global farmer market particularly last year. So, the pharmaceutical and medical research association of America did a bit of a lobbying effort to the Trump administration about the kind of stringent cost effectiveness policies in Australia. They also elected other countries, so Australia wasn't the only one. It was also looking at Canada, the UK. This is a broader piece of lobbying efforts that they're doing with putting pressure on numerous numerous countries, but Australia's PBS was really targeted within NUSH. The government has responded and is really clear on keeping the PBS kind of protected within kind of tricky agreements. But I think that the increasing complexity now is around the most favorite nation pricing. So, that's where Trump is looking at potentially bringing in a pricing policy where the U.S., who currently pay the most for medications, that they would actually look at anchoring themselves to comparable countries. So, Canada, Australia, the UK, who all pay significantly less for those drugs. And with that, it obviously just is the U.S. So, to pay less, it just means we've less money for innovation. And they're going to worry about what might happen there if that kind of disinvestment in research and innovation occurs. That's just the context. Then, why did I start to think about this? And I guess, just before actually the Trump administration started putting pressure on the PBS, I was working as a strategy consultant in Deloitte, Australia. I was working with some of the life sciences companies across the country. And I was noticing this kind of this investment in Australia pull back of global funds. And it was before it had really hit too much of the headlines, I guess, in terms of the risk-seeing kind of drugs not launching or being pulled in Australia and other countries. But there was almost a signal of what will happen if this continues that I was starting to see. And I thought it would be really interesting, if I. And luxury, the strategy consultant is to solve an independent problem and come with that a new ones for you, looking at both sides. And I had that opportunity through this dissertation. And I thought it might be something that will be relevant to this sector and relevant to Australia and the Australian population as well. So with that, I had a research question of what would the impact of Australia's HTA process be on patient access and innovation? And I really wanted to understand what the knock on impact of the process as it is was on both of those things. But really, I'll kind of the population outcomes and using patient access and innovation as a kind of lever to understand that. Due to, again, my position as a strategy consultant, I was fortunate to have connections in the sector. So that allowed me to really use my sector connections to conduct a bit of a semi-structured interview. So I was really pulling together the decision makers, the viewpoints of some of the decision makers in the pharmaceutical sector in Australia. So both on government side and on the sector side to pharmaceutical sector leadership. With that, I had 10 senior media interviews and three of those were government and including both PBS and PBAC representation. And then there was seven on the pharmaceutical side. So it was a little bit disproportionate in the balance. But that was attributed to kind of the finding by making sure I was just using percentages rather than a number of people. The benefit of doing it in this kind of using that senior leadership was really to make sure because we're kind of there's not a clear view in policy or in it's not very evidence-based. It was an opportunity to really understand what was happening at the cold front of us given there was so much change. And I used kind of that kind of reflex of thematic analysis approach, leveraging the broad and I forget the second name of the other gentleman but their framework on how to do that making sure that I was acknowledging the interpretations I was making as I went. I then triangulated my findings from the interviews with existing literature, also the HTA review outcomes and then also there had been an interim IAD report which I also looked at and I also looked to the sector responses to that. So I came up with recommendations and rising out of both the interviews but then also moderating that with some of the existing literature. Let's get to the step where the study earns its keep. So a word on what the audience could see and you cannot. Ella dissects through each finding in turn. What you are listening for is the strength of each theme and which side of the table it came from. - So let's get into it. The three most common findings were and I'll start with the top when there's single most important one was this move to a single source of funding. So every stakeholder found that the differing funding buckets, so that's bringing in when we think about NSAC and all of that, but having where medications and HTSTs particularly have to go through additional chat and review chat, mechanisms or recommendation processes and then get funded to a different bucket just adds complexity to the system and having that single source of funding all stakeholders agreed will be really useful. That will however require legislative change and it wasn't something that came through in the latest NHRA Dendom. So it's not something that has progressed but it's again an area that's worth considering into the future. The second one then in the middle again. So that engagement with the PBAC free decision it was came up again and again across both groups as really important to reduce that kind of multiple submission in the UK. They have like a interim discussion so they can make sure they're interpreting the evidence properly and that they can talk they can go back to the pharmaceutical submitter as such and make sure that they're understanding and informing what is coming into their kind of evaluation process. So while the timeline might be longer overall it actually is reduced because it's reducing that kind of need to resubmit post decision. The third one that came up in all pharma interviews it didn't arrive at all in the government interviews that it came up in every single pharma interview was that need to improve the submission to listing time. So the difficulty in getting through submission through the evaluation and then needing to renegotiate once it's got a recommendation or a recommended or not recommended if it's recommended by the PBAC. It then needs to go through that extra kind of I guess correspondence with the government to negotiate the price and that can be where some of the products also drop out of the process and where it kind of challenges arise. So that kind of full timeline is really labour intensive as well and it puts pressure from a global perspective on Australian pharmaceutical companies and trying to go through this process. They were the biggest three. Then if we think about wash came out in areas of divergence across government and pharma. So government very much still saw Australia as a tier one launch market. They believe that the PBAC gives a guaranteed market and also the use of the clinical trials in Australia is helpful to keep Australian in that tier one mindset for global. Pharma however had a different perspective on this and they really felt that the launch attractiveness of Australia had fallen dramatically in the last couple of months and that's due really to those viability concerns. So it's due to the timeline but also the viability of actually getting it through to listing given the kind of cost effectiveness, cost utility analysis and other mechanisms that are really putting a bit of a ceiling on the price and just make it really difficult to launch in Australia and are reducing the attractiveness given that. The next finding that in the World Talk About is around kind of the cost effectiveness and how that kind of how the pharmaceutical product gets evaluated. So for government, they were almost fan that there was a need to further kind of evidence cost effect and they really wanted to see kind of pricing that was submissions that were in line with the evidence at time of submission. So giving them kind of more certainty of course as I think many of you have already found that on the call will know that the uncertainty is the biggest kind of the triggers area for the farm at the moment. But also some of that is how do we actually improve how it's measured? So how did cost effectiveness get measured? So there was a couple of suggestions there. And I think both of the ones that have been called out as key have been picked up by the ministers as kind of things we will do. I don't believe they actually have come into effect yet. So essentially pending the IAG report but have been committed to publicly at least. So that's around the low cost comparator so making sure that we are measuring any pharmaceutical product more like standard of care rather than the lowest cost comparator because some of those drugs have been put in place maybe 20 years ago and might have gone through multiple discounts which makes it really difficult. And the other and maybe not even used much in practice which is the big thing. So making sure we're comparing to what's more relevant. And then the second one is the discount rate. So moving that to 3.5% to thinking out how some of these medications will have a longer term kind of impact as well. They were the two that came out around how do we increase that kind of incremental cost effectiveness ratio for a farmer. And then also I guess government we're looking for that better cost effectiveness. So both thinking about a little bit differently and potentially some options to meet in the middle. Then if we think about what was in the middle. So I'll go through these top two bottom. But the first one was around kind of that as I'm sure many of you again will know that they asked for an increased funding envelope. So this one was really a need to increase the envelope. It's declining in proportion with GDP over time. What the fibresuit of what the PBS and what farmer is proportion as part of the federal budget. So looking at how do we increase that. And I think there was commitment across both groups certainly in pockets that we needed to look at that. The second one is an interest in ones. I know this one arises has a lot of debate. And the debate is also seen in the literature. But the need to consider a second order costs and benefits in the economic modeling was considered in some. So looking at it's essentially a bit of a how do we incorporate social value judgments. Things like return to work. Things like carers thinking about all of those different things as well. And thinking about where we're trading off of for spending this much money on a medication versus on workforce. Like what does that look like? So bringing that into the economic model to have that robust consideration. The I'll just mention it because I think it is important. The literature does mention the potential by including these second order costs and benefits to favor working age populations. So that is something we do need to face into as a society and it comes to that social value judgment perspective if we were to pick that one up. The next one then is around joined country assessment. So again, in some of the interviews this one came up as as a helpful one. So we can think about and maybe not right down to the cost of effectiveness level, or say the affordability envelope level but from a kind of clinical effectiveness and some of the back to this impulse working with counterparts in Canada and the UK, for example. Findings are one thing. What to do about them is another. In this final section, Ella sets out the recommendations that came out of the interviews once she had tested them against the literature and against the HTA review material. She groups them into four areas, improving the incremental cost effectiveness ratio, reforming risk-sharing agreements, making better use of real-world data, and reducing administrative burden. She is careful about the status of H1. Some have already been accepted by government, some are HTA review recommendations, still under consideration. And two are her own additions, offered as an independent researcher, rather than a decision maker. After that, she looks ahead to what the sector should be watching, and then the room gets its turn. One participant takes direct aim at the finding you heard at the top of this episode. So, nothing at improving that cost effectiveness, so the eyes are the incremental cost effectiveness ratio and by doing so, bringing in that, moving from, sorry, from low-cost comparator to a standard of care or common therapeutic option, most often therapeutic option comparison. The second was reducing that discount rate to make sure that we are appropriately valuing those novel technologies that might have a longer term benefit, which we know is really hard when it comes to economic modeling. It's often that the models just don't really, they depreciate so much over time what they're valuing at the medication as, but it makes it really difficult to show that the long term benefit. And that's a typical issue we think about how do we invest in who that into the care and how it comes up in the models. The last one then is around including second-order costs and benefits. The IAG is looking at a value framework, so I think this will be a really interesting incorporation into that lens, because I think it talks to that social judgment perspective. As I mentioned before, it does have debate in the literature there are some real risks around it. There are also some kind of proposals on how to make this effective and I think making sure the costs are equally considered is really important, but then still considering the equity lens on top of it is really important to make sure that decision-making is robust and isn't overindexing one kind of cost effectiveness piece. The next column is the risk sharing agreement, so a couple of things in here that I've potentially useful from interviews and the literature review. So the use of managed entry agreements that I talked about earlier, so allowing that interim funded access until and certainly can be addressed to kind of help to understand the cost effectiveness analysis and allow better modeling and also utilization as well, so it will inform both of those kind of modeling pieces so that we can make sure that we can reprise drugs at a price that's suitable and that actually is a win-win to birth groups. The next one then is around real-world data, so it was talked about in allowing this real-world data and it was probably talked about more in the literature than it was in the interviews, but it did come up as well in pockets, but really helping using that to inform the modeling again so that we can really understand what the difference between expected use and then prescribing practices in real terms are going to be so that we just make sure that those volume caps are suitable and against it comes under the risk sharing agreement work that the medicines Australia and the government are working on. The last one then is around reducing the administrative burden, so we talked about the very beginning in terms of the context, who are understanding and the difficulty with the kind of timeline and the PBAC kind of evaluation process, so really there's three key things in there, the first one is around giving us some streamlined evaluation pathways and giving greater transparency, so it came up again in pockets in interviews, but also in the literature quite strongly, so having that kind of streamlined evaluation rather than multiple different channels, and I think that will came up quite strongly in the IAG interim report as well. The next one then is around flexibility in the PBAC process, so that's allowing that kind of engagement, pre-decision rather than just post-submission, so that it just makes sure that what's going in is really being understood by both, and that we're putting the right components into the models so that it can be evaluated effectively, and that should reduce the kind of need to resubmit if there's a do not recommend, and then also it will love to accelerate the timeline overall. And then the last one there is around cooling funding buckets, so again having a single funding and the PBAC was recommended in particularly in interviews, as the funds that all drugs should go through, but especially hate disease and combination drugs, and I know this was being, I think, advocated for as part of the hate rate and hate rate addendum, which didn't come through, but it could be locked out there, and the HTA review did come up with bridging funds as a proposal, but there were some kind of correspondence in review of that that kind of weren't so keen on that being an option. I'll then turn to what happens next. So I propose, again, I'm not a decision maker on this, but my kind of proposal coming out of this research work, is that we do need that legislative reform, so really making sure that we think he met how we can have a funding envelope that suitably manages the needs of our population and the innovation opportunities that are right there, and novel therapies, cooling funding buckets into the PBS so that the decisions can be made in one place and reducing administrative burdens. The roadmap then in the final IAD report would be really important to look at and to understand that he wanted issues, it addresses, see washed, issues that maybe hasn't that have risen out of this research, so potentially thinking about workarands for some of them that haven't been addressed, as I just spoke about, so focusing on unmet clinical needs, so making sure that we're actually focusing on the outcomes that government is most worried about in terms of driving for Australian populations and where they don't have so many leverage to pull, so making sure that we're getting in behind that. And then the last one really is with the global situation as it is, continuing to monitor what's happening there, and I guess on all ends both government and format, just being ready to respond to what might change relatively dramatically overnight, there are other efforts being left out by again the Trump administration and the pharmaceutical and medical amount of manufacturers of Australia, so it could change. The NHS has already started to pay a little bit more, I think they've increased their payment or their budget envelope by 25% I believe in the last couple of months, so they've responded to the pressure the Trump has put on them, I don't believe Canada have responded as much just yet, but it's a watching brief there, so continuing to just see what country countries are doing and making sure that we are positioned to respond in whatever way works best for Australia. Neil Deakin from Health Advanced Connect was on hand during this recording and his international experience went straight to the finding and what I think will surprise many in the sector. I guess the thing that most surprised me was the government thought that Australia was a tier one country, now it's been over a decade since I've been involved with global launch planning, Australia was never a tier one when I was the global launchers, it just seems to me that the government stakeholders she spoke to fundamentally have misassessed the launch attractiveness of Australia at present moment, and I was just wondering, have you played back the the pharmaceutical side of the data to almost weak people up? So I have shared my findings with all of the kind of participants of the survey, but I think it to your point it's like a broader conversation because it's going to hit broader than just the people I spoke to if that was all of their mindset and it was very clearly all of their mindset which was a really interesting find for me, but I think it's actually probably a continuing communication effort and also something for the sector to continue that conversation with their kind of government counterparts in lobbying or communication efforts, but certainly it is one of the key things out of this research and we'll be important to keep addressing. Yeah absolutely, it speaks to kind of the advocacy messages to actually accelerate the reforms that we need to see. So what should life sciences professionals take from that discussion? Three things stand out to me, the first is the value of the method itself. This was 10 interviews with senior people, three from government and seven from industry, most of them with more than 25 years in the sector, conducted at a moment when the system is actually in motion. Ella made the point that earlier studies in this space tended to be surveys and tended to be drawn from a less senior cohort. Access to that seniority is what allowed her to surface fuse that are not in the public domain. If you are building an advocacy case, that is a reminder that the quality of your evidence base is a strategic asset, not an administrative task. The second is the gap. On several reforms, there was genuine convergence. Both sides wanted a single source of funding, both sides saw value in engaging with the PBAC before a decision rather than after it. Both saw problems with how managed entry agreements currently work, but on the fundamental question of whether Australia remains an attractive place to launch a medicine, government and industry described two different countries. Government pointed to a guaranteed market and to clinical trial leadership, industry pointed to timelines and viability and said attractiveness has fallen. As one participant put it in the discussion, that is an advocacy problem before it is a policy problem. The third is that the practical levers are not all in camera. Ella's recommendations for the sector were about what can be done now while the reform process runs, the lining innovation effort with genuine unmet need in Australia, thinking about supply chain and medicine shortages and putting stronger clinical evidence forward with randomized trials and direct comparators where that is possible, so that decision makers are not forced to rule on immature evidence, a broader observation of my own and it is mine rather than the speakers. The two areas Ella flagged as requiring legislative change, pulling the funding buckets and expanding the funding envelope are also the two that would do the most structural good. Those are long campaigns, they are worth starting properly, my thanks to Ella for sharing her research and insights to Catherine for convening the session and to everyone who contributed to the discussion. You have been listening to Cognizio, the podcast of Life Sciences Australia. To learn more about Life Sciences Australia, our events, professional development programs and community, visit LifeSciences.au. I'm Tim Boyle, thank you for listening.