Access to cancer drugs in Australia
Australia is often described as the cancer capital of the world with the
highest age-standardised incidence of cancer. Half of all Australians will
develop cancer in their lifetime and one in five will die from it.
Australia also has cancer survival outcomes that are equivalent to the best in
the world. Australia's one year survival rate for all cancers combined is 81
per cent and overall five year relative cancer survival rates are more than 66
Together with investment in cancer detection and screening, investments in
medical research have led to dramatic advances in the way cancer is treated and
will be treated in the future.
At the same time, there is widespread concern that Australian cancer
patients continue to face significant delays and expense in accessing new
cancer drugs, or existing drugs that are not available under the Pharmaceutical
Benefits Scheme (PBS) for their form of cancer.
On 3 December 2014, on the motion of Senator Nick Xenophon, the Senate
referred the following matter to the Senate Community Affairs References
Committee (committee) for inquiry and report by 26 March 2015:
The availability of new, innovative and specialist cancer
drugs in Australia, with particular reference to:
- the timing and affordability of access for patients;
- the operation of the Pharmaceutical Benefits Advisory
Committee and the Pharmaceutical Benefits Scheme in relation to such drugs,
including the impact of delays in the approvals process for Australian
- the impact on the quality of care available to cancer
- any related matters.
On 9 February 2015, the Senate extended the reporting date to 22 May
The reporting date was subsequently extended to 17 September 2015.
Conduct of the inquiry
The committee advertised the inquiry in The Australian on 15
January 2015. Details of the inquiry were placed on the committee's website and
the committee wrote to 54 organisations, inviting submissions by 27 February
2015. Submissions continued to be accepted after that date. The committee
received 205 submissions. A list of the individuals and organisations who made
submissions to the inquiry is provided at Appendix 1.
A public hearing was held in Canberra on 20 April 2015. A transcript of
the hearing is available on the committee's website,
and a list of the witnesses who gave evidence at the hearing is provided at
Appendix 2. The committee thanks those individuals and organisations who contributed
to the inquiry.
The structure of the report
Chapter 1 sets out the context of the inquiry. It provides an overview
of the incidence of cancer in Australia and describes the regulatory pathway
for the approval of medicines for marketing in Australia and reimbursement of
the cost of some of those medicines through the PBS.
Chapter 2 examines the factors that affect the timing and affordability
of access to new cancer medicines. It considers the operation of the TGA, the
PBAC and the PBS.
Chapter 3 considers the PBAC's approach to the assessment of the cost
and effectiveness of new cancer medicines as a prerequisite for listing on the
PBS. It also considers the role that consumers and clinicians can play in this
Chapter 4 considers the impact of delays in the approvals process for
Australian cancer patients. It examines the available pathways for access to
cancer drugs not available through the PBS together with the need for timely
and accurate information about new cancer medicines.
Chapter 5 examines some alternate models for facilitating access to new
and innovative cancer drugs together with the need for improved data collection
to support such models.
Chapter 6 presents the committee's conclusions and recommendations.
The incidence of cancer in Australia
It is estimated that 45 780 people will die from cancer in 2015, an
average of 125 deaths every day.
This figure represents approximately three out of every 10 deaths
registered in Australia
and is 84 per cent higher than the number of deaths reported in 1982 (24 922
The Australian Institute of Health and Welfare (AIHW) has estimated the
risk of being diagnosed with cancer before the age of 85 is 1 in 2 for males
and 1 in 3 for females.
The number of expected diagnoses has increased 2.6 times compared to the
number of new cancer cases reported in 1982 (47 417 cases). This corresponds to
467 cases per 100 000 people, compared to 383 cases per 100 000 people in 1982
(an increase of 22 per cent).
The most common diagnoses for new cancer cases in 2014 was estimated to
prostate cancer (17 050 cases);
colorectal cancer (16 640 cases);
breast cancer (15 410 cases);
melanoma of the skin (12 640 cases); and
lung cancer (11 580 cases).
Together, these forms of cancer comprise approximately 60 per cent
of all expected diagnosed cancers.
Figure 1.1: Estimated 10 most common diagnoses of cancer,
Australian Institute of
Health and Welfare, Cancer in Australia, An overview 2014, Cancer Series
No.90, Cat. No. CAN 88, Canberra: AIHW, p. 17.C
The AIHW predicted the diagnosis of 150 000 new cases by 2020, an
increase of almost 40 per cent from 2007. The AIHW attributes this increase
primarily to an ageing and increasing population, and has reported:
Which cancers will
present the biggest burden in 2020?
For males, prostate
cancer is expected to remain the most common cancer diagnosed in 2020 (25,300
cases), followed by bowel cancer and melanoma of the skin (about 10,800 cases
each) and lung cancer (7,500 cases). For females, breast cancer is
projected to continue to be the most common cancer diagnosed in 2020 (17,200
cases), followed by bowel cancer (9,200), melanoma (6,800) and lung cancer
Which cancers are
on the rise?
rates for liver cancer are projected to increase by 38% from 2007 to 2020 in
males and 78% in females, while thyroid cancer rates are projected to increase
by 33% in males and 62% in females. Increases are also expected in rates
for melanoma (30% males; 18% females), testicular cancer (25%) and lung cancer
in females (16%).
The most common causes of death resulting from cancer do not precisely
correlate with the top five cancer diagnoses. Instead, lung cancer will be the
most common cause of death (8 630 people), followed by colorectal cancer (4 120
people), prostate cancer (3 390 people), breast cancer (3 030 people) and
pancreatic cancer (2 640 people). These five cancers represent just under half
(48 per cent) of the total mortality from cancer, with lung cancer alone
accounting for nearly one in five deaths (19 per cent).
Figure 1.2: Estimated 10 most common causes of death from
cancer, Australia, 2014
Australian Institute of
Health and Welfare (2014), Cancer in Australia, An overview 2014, Cancer
Series No. 90, Cat. no. CAN 88, Canberra: AIHW, p. 49.
The AIHW estimated that the risk of dying from cancer before the age of
75 years is one in nine for males and one in 13 for females. By the age of 85
years the risk increases to one in four for males and one in six for
The International Agency for Research on Cancer (IARC) (part of the
World Health Organisation) maintains the GLOBOCAN database, which provides
contemporary estimates on the incidence, mortality and prevalence of major
cancer types at a national level for 184 countries.
According to the most recent GLOBOCAN estimates, the number of new
cancer cases diagnosed worldwide in 2012 was 14.1 million. In that same year,
122,031 new cases were diagnosed in Australia, representing less than one per
cent (0.87) of the global diagnoses. However, the incidence rate for cancer in
Australia (323 per 100,000) was higher than the rate for other regions.
In terms of mortality, the IARC estimated the number of deaths from
cancer worldwide was 8.2 million in 2012. For Australia, 43,400 people were
expected to die from cancer, a mortality rate of 96 per 100 000 people.
Cancer as a national health priority
Cancer poses a complex challenge for the Australian healthcare system.
Cancer is not one disease. It is many hundreds of diseases, each of which can
manifest differently in each cancer patient. As the prevalence of cancer trends
upwards, the health and economic impacts on individuals and the health system can
be expected to continue to increase. At the same time, the costs of new cancer
medicines are increasing at a faster rate than other new medicines.
Cancer is one of nine National Health Priority Areas (NHPA) and accounts
for 19 per cent of the total disease-related burden, making it the highest
disease-related burden on society.
The annual cost of cancer to government has been placed between $4
billion and $5 billion per annum. This funding supports a range of measures
along a continuum of care including: research, prevention programs and national
screening programs as well as 'timely access to cost-effective, clinically
indicated treatments through the Medicare Benefits Schedule (MBS) and the
Pharmaceutical Benefits Scheme (PBS).' The Department of Health (DOH) states
that the mix of funding must be balanced to deliver the best health outcome for
the most cancer patients.
Expenditure on cancer medicines accounts for one third of current cancer
funding. As Figure 1.3 illustrates, in 2013-14, $1.5 billion was spent on
subsidising the cost of PBS-listed cancer medicines.
This represents 16 per cent of the total PBS expenditure of $9.2 billion.
Figure 1.3: Cost
of PBS cancer medicines
PBS expenditure for cancer medicines
Benefits paid ($ billions)
PBS and RPBS benefits paid
Total PBS benefits paid – all medicines
Department of Health,
Submission 197, p. 22.
An additional $50 million is used to fund the Herceptin Program each
Figure 1.4: Cost
Expenditure for Herceptin Program (non-PBS)
Benefits paid ($ millions)
Total benefits paid
Department of Health, Submission
197, p. 22.
DOH advised that cancer medicines are some of the most expensive
medicines on the PBS:
Despite reaching one sixth of total expenditure,
cancer-related scripts (2.6 million) supplied in 2013-14 represent only around
1% of all PBS scripts (213.7 million). The funding benefited approximately 3%
(over 337,250 patients) of the total 9.8 million patients supported through the
PBS in that year.
Cancer medicines are generally more expensive than non-cancer medicines
and, as Figure 1.5 below illustrates, new cancer medicines make up an
increasing proportion of total PBS expenditure on cancer medicines. DOH advised
PBS benefits paid for newer cancer medicines increased at a
rate of 33% per year over the last five financial years, compared to a growth
rate of only 5% per year in benefits paid for established cancer medicines.
Figure 1.5: Cost of established versus newer PBS cancer
Department of Health, Submission
197, p. 23.
Assessment of cancer medicines in Australia
The Australian Government employs a range of processes and mechanisms to
assess the quality, safety, efficacy, effectiveness and cost effectiveness of
health technologies and procedures. Collectively, these processes and mechanisms
are referred to as Health Technology Assessment (HTA).
The DOH advises that '[a] well-performing HTA system will:
facilitate patient access to cost-effective health technologies
that improve health outcomes;
minimise the use of technologies that are ineffective or harmful;
contribute to value for money investments in health technology in
the context of limited health care resources;
keep pace with evolving technologies, clinical practices and HTA
provide clear information on processes, rules and outcomes to
ensure the system is designed to achieve these outcomes in the
most timely, effective, efficient and targeted way'.
Concerns have been raised at the ability of the system to meet the above
criteria and the vast majority of submissions have called for a fundamental
review of the system.
Through its HTA system, the Australian Government seeks to ensure the
sustainability of the Australian Government's health financing arrangements. As
Figure 1.6 illustrates, in order to gain approval and reimbursement of
medicines in Australia sponsors are required to demonstrate the merit of the
medicine against five critical requirements:
quality, safety and efficacy, as assessed by the TGA;
clinical and cost effectiveness, as assessed by the PBAC; and
financial feasibility/acceptability as assessed by the Minister
for Health and the Cabinet.
Figure 1.6: Map of current Australian Government HTA
processes for market entry and for reimbursement processes
Department of Health, Australian
Government HTA Process, Health Technology Assessment website.
The following section provides an overview of the pathways through which
cancer medicines are assessed, approved and reimbursed for use in Australia.
Therapeutic Goods Administration
Before a medicine can be made available to patients in Australia, it
must first receive regulatory approval from the TGA. The TGA administers a
uniform, national system of regulatory controls to ensure the quality, safety,
efficacy and timely availability of therapeutic goods for human use. The TGA
regulates therapeutic goods through:
post-market monitoring and enforcement of standards; and
licensing of Australian manufacturers and verifying overseas
manufacturers' compliance with the same standards as their Australian
The TGA approves and regulates products based on an assessment of risks
against benefits, considering factors such as side effects, potential harm
through prolonged use, toxicity and the seriousness of the medical condition
for which the product is intended to be used.
While most therapeutic goods are required to undergo an evaluation by the TGA
before they can be supplied in Australia, there are a number of ways that
patients can gain access to products that have not been approved for use in
Authorised prescribers: a medical practitioner may be granted
authority to become an authorised prescriber of a specified unapproved
therapeutic good to specific patients with a particular medical condition.
Special access scheme: arrangements which provide for the import
and/or supply of an unapproved therapeutic good for a single patient, on a case
by case basis.
Medicines that have not received TGA approval may be accessed
only under specific circumstances.
Only medicines registered on the Australian Register of Therapeutic Goods
can be included on the Schedule of Pharmaceutical Benefits (PBS Schedule).
The Pharmaceutical Benefits Scheme
Under the PBS the Commonwealth subsidises the cost of a wide range of
prescription medications to all Australian residents who hold a medicare card.
Patients pay a contribution depending on their status as a general or
concessional patient and the PBS provides safety nets, primarily through
reimbursements paid to community or hospital pharmacies, to protect high
medicine users from excessive medicine costs.
The overarching framework for the operation of the PBS is provided in
the National Medicines Policy (NMP). Among other things, the NMP provides for
'timely access to the medicines that Australians need, at a cost individuals
and the community can afford'.
The PBS Schedule lists all medicines available to be dispensed to patients at a
On 27 May 2015, the Minister for Health, the Hon Sussan Ley MP,
announced a package of reforms to the PBS. In introducing the Pharmaceutical
Benefits Scheme Access and Sustainability Package (reforms), the Minister
This reform package is designed to be a sensible start that
focuses on longer-term structural reform to enable ongoing investment in new
medicines while ensuring they remain affordable for patients and taxpayers.
The reforms include:
...a five per cent reduction in the price taxpayers pay for
on-patent medicines that have been listed for five years or more on the PBS.
This is expected to deliver efficiencies of about $1 billion to ensure new F1
medicines can be listed for patients as well.
The committee notes that the potential for this measure to impact on
research and development of new medicines was raised during consideration of
the National Health Amendment (Pharmaceutical Benefits) Bill 2015.
The Pharmaceutical Benefits
The PBAC is an independent expert body comprised of doctors, health
professionals and consumer representatives appointed by the Australian
Government. The PBAC meets three times a year to consider new medicines for
listing on the PBS. No new medicine can be listed unless the PBAC makes a positive
When recommending a medicine for listing, the PBAC takes into account
the medical conditions for which the medicine was registered for use in
Australia, its clinical effectiveness, safety and cost-effectiveness. The PBAC
is assisted in its analysis and advice by the Drug Utilisation Sub Committee
and the Economics Sub Committee.
Following a positive recommendation from the PBAC, the sponsor of the
medicine is required to negotiate pricing and any applicable prescribing
restrictions with the DOH.
If the cost is more than $20 million in any one year of the Forward Estimates,
the recommendation must then be approved by the Minister for Health or Cabinet.
Medical Services Advisory Committee
A separate but similar process applies for the assessment of medical
services or technology. The MSAC is an independent expert committee that
provides advice to the Minister for Health on the strength of evidence relating
to the comparative safety, clinical effectiveness and cost-effectiveness of any
new or existing medical service or technology, and the circumstances under
which public funding should be supported through listing the service and
technology on the MBS. The MSAC meets up to four times a year.
Co-dependent and hybrid pharmaceuticals are currently considered
separately by the PBAC and the MSAC using different approaches to assessing
evidence against the HTA criteria. This is because listing needs to occur under
two separate funding programs.
Alternate access schemes
Life Saving Drugs Programme (LSDP)
The Australian Government provides subsidies for a limited range of
medicines not eligible for funding under the PBS through the LSDP. Through the
LSDP, eligible patients are able to gain access to expensive lifesaving drugs
for very rare life-threatening conditions. The LSDP currently subsidises ten
medicines for eligible patients with one of seven rare and life threatening
Submissions for a drug to be considered for inclusion in the LSDP must
be lodged in conjunction with submissions to the PBAC for PBS listing.
Submissions are received in March, July and November each year by DOH. If the
PBAC accepts that a drug is clinically effective for the proposed indication
but rejects it for listing on the PBS on the grounds that it is not cost
effective, the sponsor of the drug may request the application be considered
for inclusion in the LSDP.
In April 2014, the then Minister for Health, the Hon Peter Dutton MP,
announced a post-market review of the LSDP to examine issues such as access and
equity, value for money and the future administration of the program.
Orphan Drugs Program (ODP)
The ODP, administered by the TGA, was established to encourage drug
manufacturers to develop and market medicines affecting small populations. An
orphan drug is a medicine that is intended to treat, prevent or diagnose a rare
disease, or is not commercially viable to supply to treat, prevent or diagnose
another disease or condition.
Before an application to register an orphan drug is made, a sponsor must
seek orphan drug designation. The quality, efficacy and safety of orphan drugs
are assessed at the same standard as other registered medicines. Orphan drug
designation by the TGA does not mean that the drug will be automatically
considered for inclusion in the LSDP.
Comparable international models
A number of submissions highlighted models introduced overseas to
improve access to new cancer drugs, and involve patients in the evaluation
In 2010, the United Kingdom established the Cancer Drugs Fund to assist
patients to access certain drugs before they receive National Institute for
Health and Care Excellence (NICE) approval.
According to a 2013 report by Deloitte Access Economics, the fund subsidises
drug treatments, including radiopharmaceuticals, for patients who have been
unable to access a drug recommended by their oncologist.
The Cancer Drugs Alliance noted in its submission that the fund:
continues to cover approximately 59 cancer drugs and during
the 5 years it has been in existence has allowed more than 60 000 cancer
patients to receive treatment they would have not have otherwise had access to.
Patients in the UK can also be involved in setting decision-making
criteria for the approval of new drugs and can participate in the Health
Technology Assessment (HTA) committee.
In Canada, the pan-Canadian Oncology Drug Review (pCODR) was established
in 2007 separate to the Common Drug Review (CDR) to assess cancer drugs and
make recommendations to provincial cancer agencies/governments to guide drug
funding decisions. In April 2014, pCODR was integrated into the Canadian Agency
for Drug Technologies and Health (CADTH).
As part of the pCODR, patients can provide input at the beginning of and
throughout the process for evaluating new cancer drugs.
Medicines Australia noted that the pCODR model 'reflected a deliberate decision
to adopt a stakeholder focussed approach with cancer and to overcome challenges
faced in HTA'.
United States of America
The United States (US) Food and Drug Administration (FDA) regulates the
use of prescription medications in the US. The FDA provides pharmaceutical
companies with four pathways that 'get important new drugs to the patient
earlier' to 'treat serious conditions and fill an unmet medical need'. These are
Expediting Product Development through:
Fast Track Designation
Breakthrough Therapy Designation
Expediting Registration through:
Fast Track Designation works by facilitating the development and
expediting the review of medications. A pharmaceutical company applies for fast
track consideration when there is no therapy available or if 'a therapy may be
potentially better than available therapy'.
Merck Sharp and Dohme describe the Breakthrough Therapy Designation as
'unique in that the FDA invests significant resources and time in numerous
discussions with the sponsor and close co-operation in the development of the
Depending on the type of application and the stage of development, an
application to one of the four pathways can result in a range of different
assistance options including access to rolling review, access between pathways
and increased access to FDA advice during the approvals process.
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