Cut-price medicine put at risk
By MARIAN WILKINSON, National Affairs Editor
The Federal Health Minister, Dr Wooldridge, is examining a proposal for
a major overhaul of the Pharmaceutical Benefits Scheme following an
intense lobbying campaign by companies trying to break Australia's
system of low-priced drugs.
The scheme, the PBS, a key pillar of Medicare, provides cheap subsidised
drugs to all.
A spokesperson for Dr Wooldridge admitted last night that draft terms of
reference for a review have been discussed by the minister after being
drawn up by officials from the departments of health and industry.
However, Dr Wooldridge has yet to approve them.
The pharmaceutical industry has been lobbying both the Minister for
Industry, Senator Minchin, and Dr Wooldridge for the review. The
industry wants to break down the PBS, which it believes forces them to
sell drugs to the Government much more cheaply than in America and
Europe. The scheme also requires higher scrutiny for new drugs before
they can be eligible for government subsidies.
Health officials told the Herald they believe the industry would use the
overhaul to press for the end of the PBS as it currently exists, forcing
drug prices to rise for both consumers and the Government.
The proposed review comes as the giant drug company Pfizer prepares to
launch a legal challenge to the scheme in the Federal Court next week.
Pfizer wants to overturn a decision by Dr Wooldridge's Pharmaceutical
Benefits Advisory Committee (PBAC) not to subsidise its anti-impotence
drug Viagra under the scheme.
The committee advised in June against subsidising Viagra, arguing that
there was a cheaper alternative and raising fears that Viagra could be
widely misused, blowing out costs for the scheme.
The Health Department is negotiating with the PBAC and its legal
advisers over whether to back down over the Viagra decision and review
the case or whether to fight Pfizer in court.
The decision not to subsidise Viagra is believed to have saved the
Government $50 million, but it stung Pfizer, which has been lobbying
aggressively for a review of the PBS.
Last night neither Dr Wooldridge nor the Health Department would comment
on the Viagra case, but Dr Wooldridge's office said he had not discussed
it with his department or the PBAC.
However the head of the PBAC, Professor Don Burkett, admitted yesterday
he still did not know whether the Government would agree to fight Pfizer
in court. Dr Burkett is the Government's key figure in the case.
The decisions of the advisory committee are independent of the Health
Minister, but both Dr Wooldridge and his department can decide whether
to fund any legal challenge to them.
When asked if the Viagra case would fold before next week, Professor
Burkett said: ''I don't know.'' When asked if the committee had Dr
Wooldridge's backing to fight the case, he said: ''No comment. I can't
comment because it's before the courts.''
However, according to health officials, the department is seriously
considering not defending the case. Instead, it could inform the company
next week that Dr Burkett's committee will rescind its decision not to
subsidise Viagra and reconsider the case in the near future.
The Health Department and the advisory committee agreed this week to a
similar review in the face of another legal challenge from a drug
company. The case was over naltrexone, used for treatment of heroin addiction.
Health officials say there is much more at stake in the Pfizer case.
Papers filed by Pfizer in the Federal Court indicate it plans to use the
Viagra case to launch the most comprehensive legal challenge to the PBS
in its history, which if successful could undermine the scheme's legal basis.
While declining to comment on the case or the review, Professor Burkett
warned that ''one thing we would have in mind in all this is to preserve
the PBS as part of Medicare as a valuable system that allows access to
drugs in an equitable way''.
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