The Guardian February 7, 2001

Pharmaceutical benefits at risk

by Peter Mac

In a move equivalent to putting the vampires in charge of the blood bank, 
the Howard Government intends to nominate a former drug industry lobbyist 
to the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC gives 
independent advice to the government on which pharmaceutical drugs should 
be subsidised for the public benefit by going onto the list of the 
Pharmaceutical Benefits Scheme (PBS).

The government cannot itself subsidise a drug without the approval of the 
Committee, although it may reject a committee recommendation for a subsidy.

The recommendations of the PBAC are used by a number of other countries as 
a benchmark for pharmaceutical use and prices. They have a huge influence 
on the profits of the multi-billion dollar pharmaceutical industry in 

As a consequence, a government report last year warned against the 
inclusion of drug industry representatives on the Committee, because of 
possible conflict of interest.

"The pharmaceutical companies are happy to destroy the PBS because it is an 
effective price control, not only in Australia, but internationally", said 
Dr Sian Hughes, who has been the Doctor's Reform Society (DRS) 
representative on the PBAC for the past three years.

"And the Government appears happy to destroy it because they want to push 
the whole issue of funding drugs into the private health insurance arena."

The government, which has strenuously argued for the inclusion of Drug 
industry representatives, apparently sought to sidestep the issue of 
conflict of interest by appointing Pat Clear who was head of the Australian 
Pharmaceutical Manufacturers' Association  a drug industry lobby group  
for five years until he officially resigned last year. Before that he was 
the Chief Executive of transnational pharmaceutical giant Glaxo-Wellcome.

The move did not, however, impress members of the PABC, and has now 
prompted the resignation of its chairman, Professor Don Birkett, who 
commented, "He [Clear] would have no ... role if he has no technical 

He also noted: "Industry can have no role on the committee. (The) PBAC 
could not function with an industry person, because of the obvious conflict 
of interest."

Two transnational firms have previously sued the government over the 
Committee's decision not to include their products. (One was the lifestyle 
drug Viagra!)

The Government late last year forced through Parliament a new Bill which 
included provision for limited tenure of positions on the PBAC.

Committee members expected this would result in a gradual replacement of 
existing members, but the government's legislation was retrospective, and 
it dissolved the entire committee last December.

The DRS's Dr Sian Hughes, now a former member as a result of the 
Committee's dissolution, said that she was targeted for removal because she 
spoke out against the inclusion of industry representatives.

She commented: "The complexity and importance of the assessment process 
demands a high level of expertise among PBAC members ... "The loss of the 
chairman of PBAC and its economics subcommittee, both of whom have 
worldwide reputations as leaders in the economic evaluation of drugs, as 
well as the loss of other members, will compromise the PBAC's capability.

"It is a serious concern that the PABC's independence and capacity are 
being weakened."

The new committee will include only two of the former members, thereby 
stripping it of much of its collective professional excellence.

The result could well be that the cost of drug subsidisation blows out to 
the extent that it brings down the whole subsidy scheme.

Another possibility is that the PBAC itself will collapse.

The Minister for Health, Dr Michael Wooldridge, is understood to have been 
making increasingly desperate attempts to recruit new members to the 
Committee, as many of those approached have refused to participate.

In either event, the result would be a rapid rise in the cost of 
pharmaceuticals to the point where, as is the case in the United States, 
many people simply cannot afford them.

The DRS has pointed out that developments such as these in the area of 
national health have to be seen in terms of the government's long term 
agenda, which is to privatise the whole health system.

DRS National President, Dr Peter Davoren, this week commented: "The PBAC 
has ensured that all Australians have access to the best medicines at a 
reasonable price by way of the Federal Government subsidy scheme.

"The PABC ensures that taxpayers get value for money by not paying too much 
for drugs and not paying for drugs of dubious merit.

"The success of the Committee lay in its independence and freedom from 
commercial and government pressure. Allowing a pharmaceutical company 
representative onto the committee the industry."

Mr Davoren asked: "Is the Government fair dinkum about getting necessary 
medications to Australians at an affordable price or is it blatantly 
presiding over the destruction of an expert committee [that is] the envy of 
the world?"

And the world is watching too, with astonishment and dismay. As the deputy 
editor of the (Journal of the American Medical Association" commented last 
week, "This is a tremendous victory for a super-rich industry that wants to 
become richer at public expense. It is shameful on the part of politicians 
to allow this."

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