Transparency in pricing arrangements for medicines listed on the Australian Pharmaceutical Benefits Scheme

Abstract

Australia's system for assessing the cost-effectiveness of drugs for listing under the Pharmaceutical Benefits Scheme (PBS) is recognised internationally. A variety of mechanisms, such as evidence-based rules for determining eligibility for initial or continuing subsidy, price-volume agreements, rebates, and caps on government expenditure are used to contain PBS expenditures. In this paper we assess the extent of use of special pricing arrangements in Australia and how and where they are communicated to health professionals and the community. We searched publicly available documents published by the Pharmaceutical Benefits Advisory Committee (PBAC) and the Pharmaceutical Benefits Pricing Authority (PBPA). We found 73 medicines where special pricing arrangements had been applied and where prices appearing on the Schedule of Pharmaceutical Benefits might differ from those considered to be "cost-effective" by the PBAC. Reporting of these special pricing agreements was inconsistent and generally non-transparent. In some, the lack of transparency may have reflected the desire of manufacturers to disguise the true negotiated price, lest it weaken their negotiation position in other jurisdictions.