June 2022

New Drug Price Regime Raises Questions

A new drug price regime about to take effect in Australia may impact opioid pharmacotherapy drugs.

Approved by Parliament in December 2021, the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Act 2021 codified a strategic agreement reached between the Commonwealth and Medicines Australia, the peak body representing the pharmaceutical industry. In order to deliver the expected $1.9 billion in savings resulting from the Act, from April 2023 some drugs listed on the Pharmaceutical Benefits Scheme (PBS) for several years will be subject to price cuts of up to 36 per cent.

The law may trigger price cuts to multiple formulations of buprenorphine. This includes Australia’s registered long-acting injectable buprenorphine (LAIB) brands, Sublocade® (produced by Indivior in the US) and Buvidal® (from Camurus in Sweden). Unlike older formulations that are delivered orally, which have been on the market for eight or more years, LAIB was only approved in late 2019 and the drugs remain under patent. It is possible that the price reductions could make the drugs economically unprofitable, and result in their removal from the market.

The Commonwealth’s primary goal— saving taxpayer dollars by ensuring Australian prices are not inflated relative to those on international markets—is not the issue causing so much concern. Rather, the question is whether the agreement will lead to unintended consequences.

for some drugs, the delivery mechanism represents a genuine technological advance, as is the case with LAIB

John Jackson

According to John Jackson of Monash University and the Pharmaceutical Society of Australia, the Commonwealth has a legitimate interest in scrutinising the true novelty of new formulations using the same active ingredient as previous drugs. Pharmaceutical companies have been known to make minor tweaks to drug molecules or formulations in order to gain new patent protections and remain shielded from competition with generics. However, John notes that “for some drugs, the delivery mechanism represents a genuine technological advance, as is the case with LAIB.”

In addition to the potential price cuts under the recent Act, another crucial policy process is ongoing: a post-market review of the PBS delivery model for pharmacotherapy drugs, conducted by the federal Department of Health. During the public consultation portion of the review, stakeholders identified an array of issues impeding potential beneficiaries from accessing these treatments. Proposals stemming from the review — which could lead to significant changes to the pharmacotherapy model — are expected later in 2022.

Any access limitations would run counter to the goals of harm reduction and the advice of specialists in opioid use disorder (OUD) treatment, who have long pushed to expand the use of pharmacotherapy drugs in Australia. Market disruptions could compromise continuity of care for a highly vulnerable patient population — including prisoners, whose OUD treatment regimen increasingly consists of LAIB in some states, including New South Wales and Queensland.

LAIB formulations have shown significant promise as treatments, particularly by freeing consumers from the need for daily visits to pharmacies and other dosing sites. According to data released in March 2022 by the Australian Institute of Health and Welfare’s National Opioid Pharmacotherapy Statistics Annual Data, use of LAIB accounted for 3.4 per cent of Australia’s pharmacotherapy patients on a snapshot day in 2021 (see The Bulletin May 2022) — which researchers have suggested is an undercount.

Early peer-reviewed studies have indicated relatively high levels of treatment satisfaction, while interviews have highlighted LAIB’s transformative potential for some consumers. One recent study involving LAIB patients in Sydney and Melbourne found that while not all experiences were positive, many participants relished greater schedule flexibility, more time for other activities, and liberation from stigmatising interactions.

It remains unclear to what extent pharmacotherapy drugs will ultimately be subjected to price cuts, as well as the price thresholds that would actually lead manufacturers to reconsider their place in the Australian market. In July, the PBS will publish an indicative list of medicines subject to price cuts in 2023. Manufacturers are then eligible to apply for delisting via the Ministerial Discretion process, with initial outcomes given in October and final determinations following in November.

Consumer advocates are confident the Commonwealth will act to maintain access to these drugs, but according to Jake Docker, CEO of the Australian Injecting & Illicit Drug Users League (AIVL), “the situation should have been on regulators’ radar much earlier–it’s emblematic of system-wide inattention toward an already stigmatised group.”

Disclosure: Penington Institute has received funding from the Australian Government, Indivior PLC and Camurus AB for several projects.