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The tricks companies use to get over-priced drugs on the PBS

Boehringer Ingelheim, manufacturer of the expensive anti-clotting drug dabigatran, has initiated a lobbying campaign to get it listed on the Pharmaceutical Benefits Scheme (PBS). The company’s efforts…

Dabigatran’s manufacturer didn’t provide PBAC with data comparing its effectiveness to the most inexpensive medication treating the same conditions. Harveyben

Boehringer Ingelheim, manufacturer of the expensive anti-clotting drug dabigatran, has initiated a lobbying campaign to get it listed on the Pharmaceutical Benefits Scheme (PBS).

The company’s efforts include a website featuring testimony by medical experts, a petition and a list of the number of patients having preventable strokes.

In actual fact, dabigatran has been on the PBS for some time. Its manufacturer’s name is Pradaxa (doctors are encouraged to prescribe using the chemical name rather than advertising name, although drug reps try to promote the opposite).

Dabigatran and the PBS

Dabigatran was placed on the PBS as far back as 2008 for a limited class of complaints in prevention of clots in the legs of patients who had undergone major orthopaedic operations, such as hip replacement or knee surgery.

There’s now an application to extend the indications of the drug, which means a wider range of patients could eligible to take it.

The proposal is to list this medication on the PBS for the prevention of stroke, or clots in the lungs of patients whose hearts fibrillate (contract chaotically).

Incomplete effectiveness test

The marketed drugs that the Pharmaceutical Benefits Advisory Committee (PBAC) decided to compare with dabigatran were warfarin and aspirin, which have a similar function. But in its submission, the manufacturer only produced data from one randomised controlled trial comparing dabigatran with warfarin.

The manufacturer didn’t present any data comparing dabigatran directly to aspirin – aspirin is cheap, warfain is a bit more expensive but dabigatran is extremely expensive.

One of the main issues for the PBS system is that drug manufacturers routinely give the PBAC a limited range of data. In this instance, they’ve given the PBAC only one head-to-head trial against warfarin; they’ve given them no head-to-head trials against aspirin.

In response, the PBAC had to find some trials of its own that compared warfarin and aspirin and indirectly figure out how aspirin compares to this new drug.

That’s a deliberate manufacturer’s ploy – they are reluctant to actually do research comparing their brand new drug against the cheapest possible drug because they are afraid it might not come up so well and expose the unjustifiable nature of the price they are asking for dabigatran.

PBAC’s findings

In this case, the PBAC, having done their pharmacoeconomic research, concluded that, in a small group of patients, dabigatran had some advantages over warfarin.

One of the main advantages was that while warfarin is quite effective in removing blood clots, patients taking it need to be monitored because if the dose is too high, they’re at risk of bleeding and if it gets too low, they’re at risk of clotting.

This need for constant monitoring with warfarin is difficult to organise.

While the PBAC found dabigatran was superior to warfarin in reducing certain complications, particularly reduction of stroke and clots in the body, for other complications, such as death, there wasn’t any statistical improvement.

The other thing the PBAC found was that dabigatran wasn’t free of side effects. The new drug, for example, was more likely to cause bleeding than aspirin.

Still bigger risks

But the biggest public health risk the PBAC identified in its report is that patients will be inappropriately moved off aspirin onto this expensive new drug by their doctors without much thought about the cost to taxpayers, and the opportunity cost to our health system.

And this begs the question of how the manufacturer came up with the price of this drug. The exorbitant price of almost $1 billion over four years can’t possibly relate to its marginal cost of production or the advanced technology involved.

One of the reasons why we should support PBAC’s science-based approach to cost effectiveness and analysis is because the government has to have some robust mechanism by which the claims of manufacturers, at least in terms of prices, can be compared and evaluated.

It’s not easy to do but it’s certainly better than the system in the United States, for instance, where there really is no national cost-effectiveness organisation that’s able to scrutinise the prices companies set, and to bargain with them.

Beware the voice of experts

Another disturbing aspect of this debate is that experts who are coming out in support of this drug company aren’t making any comment about the inflated price.

This is disturbing because there have been well-publicised cases where experts who have made these sort of claims have been subsequently found to have been rewarded in various ways by the pharmaceutical manufacturer.

If you look, for instance, at the Vioxx case, which has been through the courts recently, there was a lot of evidence that drug companies were manipulating experts to make quite outrageous claims about the benefits of the new drug simply to enhance their profits.

And it’s certainly not helpful – and potentially breaches various provisions of the Therapeutic Goods Act – for this company to set up a website that says, here is the number of strokes taking place since this drug hasn’t been approved.

In my mind, this is an example of direct-to-consumer advertising and it’s exerting inappropriate pressure on the government.

We don’t have a system in Australia where lobbyists can simply pressure the government into listing these drugs and getting a hose-pipe of dollars at whatever price manufacturers dream up: we have a science-based system for evaluating such things.

Maintaining an evidence-based system

At the moment, that science-based system is under threat from multiple sources, including the Trans Pacific Partnership Agreement (TPPA) regional trade deal, in which we understand from leaked documents the United States is again going to argue that there should be provisions specifically targeted at out PBS and the New Zealand PHARMAC system.

These provisions are designed to allow lobbyists to promote public policy against the scientific cost-effectiveness analysis of new health technologies. Instead, we should be including provisions in the TPPA that allow governments access to data about how the pharmaceutical companies set their prices.

So this is the backdrop in which these sort of debates about PBS listings are playing out, and they are important. If we don’t have the capacity to bargain with companies to get an appropriate price then future generations are laden with not just the huge price of this drug but those of subsequent drugs that manufacturers can attach to drugs that are only found to be half-way beneficial under PBAC scrutiny.

These drug companies want to basically treat the PBAC as a subsidy system which gives them whatever price they come up with and doesn’t permit a price negotiation.

But they can’t expect the government to cop the opportunity cost of paying billions of dollars over the next few years when they can’t show how they’ve set the price for their drugs.

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3 Comments sorted by

  1. Cris Kerr

    Volunteer Advocate for the value of Patient Testimony & Sustaining our Public Healthcare Systems

    At the risk of repeating myself... what is needed is reliable self-reported patient data on individual experiences and health outcomes... to balance the scales and act as a buffer against data that may have been corrupted by 'conflicts of interest'.

    Patients should be given enhanced capacity to 'participate' in their own health journey through self-reporting their health experiences and outcomes. They could do this through a govt ehealth system purpose-designed to capture meaningful data on symptoms…

    Read more
  2. David Legge

    Scholar Emeritus in the School of Public Health & Human Biosciences at La Trobe University

    In the TPPA negotiations the US is explicitly seeking to ban the use of pharmaco-economic cost effectiveness comparisons such as those pioneered by the PBAC for 'drug reimbursement programs'. In their place they would prefer 'market derived prices' which in the context of monopoly pricing under patent means pay whatever the drug company asks.

  3. wilma western

    logged in via email

    An informative article on an issue of central importance to Australia and the integrity of the PBS system . Yet another example of big business trying to capture the democratic process to get their way ( along with the Clubs on pokies reform and mining and anti carbon pricing ads) . As this issue has not got a lot of coverage in standard media perhaps we can assume that the Opposition supports the PBAC findings ; however the general public might be more influenced by agitation from people claiming medical knowledge.