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PBS capacity to support new medicines in doubt

Thursday, 22 April 2010

Media Release

A grave risk is emerging that the Pharmaceutical Benefits Scheme will be unable to continue supporting the development of new medicines in the future, Medicines Australia chief executive Dr Brendan Shaw told an industry conference today.

Speaking at the Future of the PBS Conference in Sydney, Dr Shaw said there was growing industry concern that the pricing decisions being made by governments globally and in Australia will constrain the future development of new medicines.

“In the drive to cut costs and get today’s new medicines at cheap prices, governments risk limiting the supply of new technologies in the future for our children and grandchildren,” Dr Shaw said.

“It is one of the great intergenerational issues of our age, but one that is not being confronted in Australia at all at the moment.”

Dr Shaw said that due to the long lead time required to develop a new medicine, the pricing policies of governments today affect companies’ commercial decisions about investment in new medicines far into the future.

“The process of developing a new medicine can take between 10 and 15 years and cost around $1.5 billion,” Dr Shaw said. “Only three in 10 medicines that make it to market are profitable enough to recover those high R&D costs.

“The cost of developing new medicines is increasing globally, but the price of the old medicines against which governments compare these new medicines against is falling.

“The result is an alarming disconnect between the reimbursement policies adopted by countries like Australia and the commercial realities of developing new medicines for future generations.

“A case in point is the development of new antibiotics which in many cases have become commercially unviable to develop because of outdated pricing policies.

“Seven thousand Australians die each year from drug-resistant bacterial infections, such as Golden Staph, and concern about the problem is growing. Yet, the pharmaceutical industry has been unable to develop enough new antibiotics to combat the problem, in part due to government regulatory and reimbursement decisions made over the past few decades.”

“It has become so hard for pharmaceutical companies to develop new antibiotics that the European Union is now exploring ways of encouraging the commercialisation of more antibiotics in the future.

“The great challenge facing the Australian Government, and governments around the world, is to encourage the industry to continue to develop these new medicines that will contribute to our children and grandchildren leading longer, healthier lives.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email:
Jamie.Nicholson@medicinesaustralia.com.au

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