Mistakes – how to be successful and popular?

A recent study found no association between perfectionism and productivity at work. However, it did reveal that certain types of perfectionists are less popular with their colleagues. A “self-oriented perfectionist” sets very high standards only for him/herself; a “socially prescribed perfectionist” believes that the acceptance of others is dependent on his/her own perfection; while the “other-oriented perfectionist” expects flawlessness from those around him/her. No prizes for guessing which type people didn’t want to work with.

In a 2018 meta-analysis of perfectionism in the workplace, people were classified as either “excellence-seeking”, those fixated on achieving high standards, or “failure-avoiding”, those whose focus was on not making mistakes. This latter type of perfectionist were more likely not to be “agreeable”. That makes sense too.

According to table tennis champion Matthew Syed, in a podcast aired by the ABC, by avoiding mistakes we limit our opportunity to learn. Growth and new skills develop via the pathway of trial and error. Babies, infants and young children understand this as they learn the necessary skills to go to school. Unfortunately, despite all the advantages of an education, by the teenage years of peer pressure, failing becomes something to be avoided. As Syed points out, while the mindset to learn from mistakes is common in many sports, it is not prevalent in our social and political institutions.

Despite this intolerance for errors in institutions, Governments do make mistakes. By way of John Lord’s Great Australian Policy Stuff-ups series of articles published in 2019, I came across the Top-13 list. The list was compiled in 2006, so you will need to decide which more recent events surpass those included and summarised below. The full piece is an entertaining read.

13. Invention of Canberra (1908)

Canberra is a document of Australian immaturity‘, Sir William Keith Hancock (1898-1988), Australian historian, 1930.

12. Patrick White Wins the Nobel Prize (1972)

The Nobel Prize commendation said that White ‘for the first time, has given the continent of Australia an authentic voice that carries across the world’.

I am amazed at the way Australians have reacted, in a way they usually behave only for swimmers and athletes’, said Patrick White.

11. Federal money for science blocks at non-government schools (1963)

This was the beginning of Federal aid for private schools and the beginning of the end for the possibility of a student-centred system for funding schooling in Australia.

10. The Release of Cane Toads (1935)

In a sort of a reverse Stockholm Syndrome, cane toads have entered Australian popular folklore as ironic heroes. There was outrage when Federal MP Dave Tollner (from the Northern Territory) publicly embraced the killing of toads with a variety of blunt instruments, including golf clubs and cricket bats. A cane toad is notoriously difficult to eliminate by such methods, and not even backing a ute over one will guarantee its demise. Instead, the RSPCA recommends euthanasing it in the freezer.

9. Publication of John Stuart Mill’s On Liberty (1859)

Published in 1859, On Liberty is one of the foundation documents of modern liberalism. Its arguments for freedom of religion and freedom of speech were radical and enormously powerful. As the influence of Mill’s political ideas grew during the nineteenth century, more attention came to be given to his economic theories. The problem was that while in the political sphere Mill encouraged small government, when it came to economics, he embraced state intervention and industry protection.

8. The Labor Party Split (1955)

‘The Split’ kept the Liberals in power and kept Labor out of power during the 1950s and 1960s. Depending on one’s political sympathies, this was either a good thing or a bad thing. But the long-term effects of the Split were disastrous for both sides of politics, and for Australian politics generally. The root cause of the Split was communism.

7. Immigration Restriction Act (1901)

The very first Act passed in the new Parliament of Australia was to give effect to a White Australia Policy. The Immigration Restriction Act excluded non-white potential immigrants (and anyone else thought undesirable) primarily by introducing a dictation test whereby immigration officers could require potential immigrants to undergo dictation in any European language. Later, the dictation test was extended to any language. Racially based immigration was effectively abolished in 1966 when the dictation test was eliminated by the Liberal government of Harold Holt, and the Act was formally repealed by the Whitlam Labor Government in 1973.

6. WA Town Planning and Development Act (1928)

The Western Australian Town Planning and Development Act 1928 was the first such in Australia to give local government the power to control the use of private land. This had spread to all States by 1955 and increased in its regulatory intensity. The upshot has been a progressive and accelerating reduction in land available for housing. Most importantly, it has brought a vast increase in prices.

5. The Uniform Tax Cases (1942 and 1957)

There are two main villains in the story of the death of federalism in Australia. Commonwealth politicians should bear most of the blame—but their desire to centralise political power into their own hands is entirely to be predicted. The second villain, the High Court, is less easily excused. One of the greatest fallacies of Australian politics is the claim that the Constitution is difficult to change. What is usually forgotten is that a referendum is only one way of changing the Constitution. Another way the Constitution can be changed is by the decisions of the High Court, and successive Court judgements have completely subverted the balance between the Commonwealth and State governments.

4. The Montreal Olympics (1976)

Stephen Holland’s failure to win the Gold Medal in the 1500 metres freestyle at the 1976 Montreal Olympics was the key trigger for one of Australia’s greatest public policy disasters. From the initial setting up of the Australian Institute of Sport to fund some Olympic sports, Federal Government involvement has grown into massive public funding of elite sport across the board, with State governments joining in to set up their own facilities.

3. Wireless Telegraphy Act (1905)

The Wireless Telegraphy Act of 1905 inaugurated the century-long comedy of errors that is Australian media and telecommunications policy. Communications regulation also formed the sharp end of the wedge of big government in Australia. In 1901, the Postmaster-General’s Department was inaugurated with 16,000 public servants—90 per cent of the total Commonwealth administrative staff at that time.

2. The Harvester Judgement (1907)

The Harvester Judgement of 1907 effectively established the basic wage in Australia. The imposition of wage levels by judicial fiat, in defiance of prevailing conditions of supply and demand in the labour market, has been a disaster for Australia since that time.

1. The End of the Reid Government (1905)

The defeat of George Reid’s Government on 5 July, 1905 signalled the end of the last chance that Australia had to avoid the full imposition of the Australian Settlement. In the post-Federation parliaments, The Free Trade Party, lead by Reid, was the last to get a turn in government, following both the Protectionists, under Barton and Deakin, and Labor, under Watson. By putting the division on tariffs aside and conceding on other issues, Reid tried to get a joint Free Trade and Protection focus on ‘anti-socialism’. Some have argued that, if he had succeeded, free trade ideas would have remained a significant component of non-Labor politics.

Image: The Simpsons

The transparency conundrum

True transparency requires more than making information available.

According to Rio Tinto, it was a ‘misunderstanding’ with the local Indigenous community that resulted in the destruction of 46,000 year-old sacred sites in May this year. The company had Government approval and stakeholders had been informed. All boxes checked. Obviously, that was not enough.

Since 2015, the Australian Government has been a member of the Open Government Partnership (OGP), committing to support the goals of increasing the transparency and accountability of government. The first OGP Global Report (May 2019, page 20), identifies these as generally lacking in health procurement decision-making in the 78 nations involved. In this article, I assume procurement includes the registration and reimbursement of therapeutic interventions by the Government on behalf of Australian taxpayers. My thesis being that openness may not necessarily be transparent, using two examples to illustrate.

Example 1. The presentation of options by the Therapeutic Goods Administration (TGA) for which type of medicines would have evaluation status made public.

Option 1: maintain TGA’s current publication arrangements [to not make public]

Option 2: list all applications accepted for evaluation

Option 3: list all applications at two different time points

Option 4: list applications of innovator medicines of highest public interest, but not generic or biosimilar medicines

The explanations given for providing Options 3 and 4 include: ‘Generally, there is less public interest in whether a generic or biosimilar medicine is under evaluation by TGA in Australia’, and ‘Earlier publication of generic or biosimilar approvals prior to ARTG entry allows more transparency of forthcoming competition to sponsors of originator medicines and potentially, purchasers of biosimilar and generic products.’

The TGA has been in the unenviable situation of neither being able to confirm nor deny whether a particular medicine is currently in the evaluation process. Other similar jurisdictions, such as Europe and Canada publish this information. It is a good initiative. The particular drivers of this 2019 consultation on transparency were: from the TGA side, inconsistencies with other agencies, especially evident during joint evaluations of new molecules; from the innovator sponsor side, more time to initiate legal proceedings against potential patent infringing generics/biosimilars and avoidance of liability for damages by the Commonwealth; and from generic/biosimilar applicants, maintain the status quo.

The inclusion of Options 3 and 4 show that there is an awareness of the potential negative commercial/financial implications to applicants and the Government of originator sponsors knowing the timing of registration of a generic or biosimilar. Is this made clear? Does ‘less public interest’ justify being selectively transparent?

Example 2. Measures associated with the ongoing Medicines Australia-Commonwealth Strategic Agreement PBS process improvements include the PBAC preference for greater transparency to be introduced in Public Summary Documents (PSDs) through a standardised approach to redactions.

Objectives of proposed PSD Changes – PBAC (Medicines Australia, Feb 2020)
•Increase transparency of PBAC’s decision-making processes.
•Publish PSDs in an efficient and consistent manner through establishment of a standardised approach to redacting information.
•Provide consumers with access to information to assist with making decisions about their individual health needs.
•Increase the public’s understanding about PBAC decisions.
•Align Australia’s practices with leading international jurisdiction approaches*.

*This refers specifically to the additional, and unexpected, push for PSD inclusion of all clinical data provided in PBAC submissions, irrespective of the publication status nor commercial impact. While no other jurisdiction currently requires it, other countries are considering in response to calls for increased pricing transparency (WHO, WHA, 2019).

While appropriate that the PBAC want to clearly indicate how each recommendation was reached, what is the point of providing even more information in PSDs when the existing format is, realistically, inaccessible to anyone without disease and technical knowledge and an appreciation of the meaning of uncertainty in this context? Inclusion of a summary in lay-man’s language in PSDs would go much further towards openness. It is like providing a patient with a copy of his/her CT scan and the report without an explanation as to what it means.

Pew Research Center, August 2019,
“Trust and Mistrust in Americans’ Views of Scientific Experts, Page 24

Do we want people to be able to understand the information OR is the fact that it is openly available more important?

According to a 2019 Pew Research survey, it is the later. Americans confidence in scientific findings are most influenced by open public access to data and independent committee reviews. There appears to be no similar survey providing Australian opinions.

Scientific journals are strongly encouraging authors to make datasets open source at the time of study publication with the intent of it becoming a mandatory requirement. Should sponsors of reimbursement submissions expect anything different? It is notable that journals target technical audiences, while PSDs are ostensibly for consumers (patients, healthcare professionals, competitors).

Before public release of information, consideration should be given as to who will use it, for what purpose(s), and the most appropriate release format, which is what the TGA and PBAC have undertaken via consultation in the examples provided. Is it enough?

Note: There is an opportunity to voice your opinion on ‘What does open government mean to you’ as input to the Third National OGP Australian Action Plan 2020-2022.

Image source: Jim Pavlidis

Who should input to HTA decision-making?

Patient engagement

Figure 1: Based on Gagnon 2011 search strategy

Patient input to HTA decision-making as a subject in the literature has peaked and plateaued in recent years (Figure 1). As a consequence of research and initiatives, such as those noted at the end of this article, the rationale for patient involvement in HTA is now well understood.

However, there is still a way to go in implementation.

Wale and Sullivan (2020) explore how patient input was reflected in the final documentation of HTA decisions by NICE, SMC and CADTH for a chronic disease and a cancer treatment considered during 2016-17. They discuss the influence of where in the process input is sought; how it is communicated (directly or written); by whom (individual patients or patient advocacy group); as well as the content of (clinical or realities of the disease beyond data); on the level of impact achieved. These and other opportunities to better involve patients in the HTA process were identified by Biointelect during research and interviews with NICE, SMC and CADTH, as well as PBAC stakeholders, for the BMS commissioned ‘Broadening the Evidence Report‘ (June 2019) (Figure 2).

In terms of the PBAC, Public Summary Documents (PSDs) currently include ‘Consumer comments’ in the Section titled ‘Consideration of the evidence’. The number and source of submissions received are noted, usually along with a summary of key points and a comment on usefulness to the Committee. No direct feedback is given to those who provide input. This may change with the most recent PBS Listing Procedure Guidance (V 1.7, April 2020) noting that the Consumer Input process is ‘under review’. The 2019 establishment of a designated ‘Consumer Evidence and Engagement Unit‘ in the Department of Health to ‘focus on expanding opportunities for consumers and patients to be central to ensuring that robust decision making can also support better transparency and understanding of HTA decision making processes‘, is likely involved in such changes. The recently launched Medicine Status Website was the product of considerable collaboration within and outside the Department.

Figure 2: taken from Broadening the Evidence Report (June 2019)

Time for the public voice?

Street and colleagues (2020) say the terminology used to describe community participation in HTA, ‘is contested and frequently confusing‘. Depending on the jurisdiction, the terms: patients and consumers (with and without the advocate suffix), public, lay members, customers, clients, and citizens are used, often interchangeably. The article identifies the lack of a specific definition of the ‘public’ in the context of HTA, and propose the following:

‘A community member who holds the public interest and has no commercial, personal, or professional interest in the HTA process.’

This leads to the question, are ‘public’ and ‘patient’ engagement currently being viewed as the same thing during HTA processes? The patient perspective is lauded as it provides insights that clinical data often does not. That is invaluable to decision makers. However, where is the public voice, or more importantly, public values in the decision? Street (2020) notes that there is little empirical evidence on which to determine how different patient and public values are in this context. Patients may have a higher tolerance of risk, and, understandably an interest limited to a specific population and treatment. The public preference is towards equitable distribution amongst all patient groups, and the utilitarianism aim to maximise the well being of all.

In acknowledging this potential difference, UK’s NICE has established a Citizens Council. The Council is made up of 30 members of the public representative of UK demographics. It meets once a year and provides a perspective on relevant moral and ethical issues. The Council’s recommendations are incorporated into NICE principles and, where appropriate, into NICE’s methodology.

In the absence of the public perspective, do we assume that consideration of public values in HTA-based decision-making is the role of elected officials, in this case, the Minister of Health and Cabinet, who are the ultimate arbitrators of how to spend taxpayers funds? This will become increasingly important to understand as the pressure of unsustainable demands, driven by an ageing population and new technologies, require further rationing of healthcare costs.

  • Wale JL, Sullivan M. Exploration of the visibility of patient input in final recommendation documentation for three health technology assessment bodies. International Journal of Technology Assessment in Health Care. 2020:1-7. https://doi.org/10.1017/S0266462320000240.
  • Street J, Stafinski T, Lopes E, Menon D (2020). Defining the role of the public in Health Technology Assessment (HTA) and HTA-informed decision-making processes. International Journal of Technology Assessment in Health Care. 2020;36:87–95. https://doi.org/10.1017/S0266462320000094. Note: The Supplement provides a country-by-country summary of public and patient involvement in HTA and HTA-decision making and provides an excellent overview.
  • Gagnon MP, Desmartis M, Lepage-Savary D, et al. Introducing patients’ and public’s perspectives to health technology assessment: A systematic review of international experiences. International Journal of Technology Assessment in Health Care. 2011;27:31-42.
  • Hunter A, Facey K, Thomas V, et al. EUPATI Guidance for Patient Involvement in Medicines Research and Development: Health Technology Assessment. Front. Med. 2018;5:231. doi: 10.3389/fmed.2018.00231
Patient engagement initiatives
  • Values and Standards for Patient Involvement in HTA (HTAi 2014);
  • European Patients’ Academy on Therapeutic Innovation (EUPATI). A public-private partnership of industry, academia, not-for-profit, and patient organisations published guidance (Hunter 2016);
  • the PREFER partnership guidelines for industry, Regulatory Authorities and HTA bodies on how and when to include patient perspectives on benefits and risks of medicinal products; and
  • US National Health Council‘s focus on ensuring the voice of the patient and patient organizations are an integral part of the value discussion.
  • the Patient Voice Initiative, established in 2015 (link to 2017 Report);
  • Medicines Australia commenced a Patient Advocacy Working Group in 2019;
  • Tip sheet for consumers to make comments to the PBAC.


The current review of NICE is a useful foil upon which to consider the announced refresh of the Australian National Medicines Policy. Both are being driven by concern that access processes are not keeping pace with biomedical innovation.

The table below provides a side by side comparison of the two appraisal systems and HTA reimbursement environments. Of interest is the relatively recent increase in NHS responsibility and focus on overall budget impact of reimbursing a new technology.

The need to effectively manage uncertainty whilst still making decisions is a key challenge of providing timely access, especially as patient populations are becoming smaller and more targeted.

EstablishedNICE became a legal entity in April 1999.
First guidance published was an assessment of zanamivir for flu.
The PBAC evolved from the Formulary Committee and became an independent statutory body under s 101 of the National Health Act (NHA) in 1953.
Cost-effectiveness was introduced into the NHA in 1998, with the first PBAC Guidelines published in 1992.
Responsible forTechnology appraisals (TAs) that assess the clinical and cost effectiveness of health technologies (pharmaceuticals, biopharmaceuticals, procedures, devices, diagnostic agents) and highly specialised technologies (HST). The primary role of the PBAC is to recommend new medicines for listing on the Pharmaceutical Benefits Scheme (PBS), taking into account the medicine registration, its clinical effectiveness, safety and cost-effectiveness compared with other treatments.
Cost Recovery FeesNew regulations came into effect 1 April 2019 allowing NICE to charge for appraisals. A single TA costs approximately US$ 156 K for large, and US $40 K for small companies.Significant increases from 1 July 2019, with the full process to listing, including one major submission, costing approximately US$ 300 K. A second stage is to be implemented from July 2020 but may be delayed.
Current review Review of Methods and Processes
Announced July 2019
Federal Government review of the National Medicines Policy. Formerly announced October 2019
Review ScopeEvaluation methods of technology appraisals and highly specialised technologies (HST).   The QALY as a decision tool is not included with NICE indicating that changes to methods will only occur if there is a compelling case.Consider whether the policy in its current form continues to meet the needs of Australians.  
Task force established, Terms of Reference pending. On-hold as resources directed to COVID-19.
StakeholdersSubstantial interest from external stakeholders and interest groups.    Wide-spread interest and involvement of health stakeholders, patient and consumer groups.
Review Concerns – access and impact on patients
-affordability in the NHS
-clearer criteria for HST
-improved representation of the patient view
-inclusion of non-health benefits
-success of the life sciences sector
-timely and equitable access to new, innovative therapies
-affordability (Govt, community, patient)
-supply chain (shortages, rebates)
-integration of patient voice
-viable medicines sector
Average evaluation16.0 months (2009 – 2016)4.5-month cycle from submission to PBAC consideration
Average time registration to reimburse (2012-2017)*4.2 months13.8 months
% NCEs registered, subsequently reimbursed (2012-2017)* 84.3%
(29% not funded for full licence, and 5% only recommended for the Cancer Drugs Fund).
PricingVoluntary Pricing and Access Scheme (VPAS) came into effect in January 2019, replacing the Pharmaceutical Price Regulation Scheme (PPRS). VPAS promises more and faster NICE appraisals for NCEs and speed up of appraisals for non-cancer medicines to be in line with cancer medicine timelines. Following loss of the Pharmaceutical Benefits Pricing Authority (PBPA) in 2014, the Department of Health has become the sole arbitrator of pricing. Reforms in 2015 introduced statutory price cuts at 5, 10 and 15-year anniversaries from PBS listing targeting patented medicines.
Last major reviewIntroduction of end-of-life criteria and formation of the Cancer Drugs Fund (CDF) that relaunched under NICE in 2016.Strategic Agreement 2017-2022 – Streamlining PBS Processes in progress.
PBAC Guidelines Version 5.0 published September 2016.
Parliamentary level reviewsAn inquiry by the All-Party Parliamentary Group (APPG) on Access to Medicines highlighted demand for wider value thresholds and modifiers, better management of uncertainty and improvements in the use of data and real-world evidence be brought into the methods. Senate Inquiries into the Supply of Chemotherapy Drugs (2013); Availability of New, Innovative and Specialist Cancer Drugs in Australia (2015) and Funding for Research into Cancers with Low Survival Rates (2017). Recommendations accepted and implemented by Goverment to varying degrees.
US trade dealsUK-US post-Brexit trade agreement under negotiation.
While US propose to redesign the NICE process, NHS England has been taking steps to increase its role in affordability and to effectively bypass NICE when appraising innovative medicines.
NHS will play a key role in applying pressure on drug prices irrespective of any trade deal.
2005 AUSFTA was instrumental in introducing major reforms to PBS listing process.
Many, such as Independent Reviews and Public Summary Documents have been diluted, or configured to suit DoH purposes. For example, recent call for 100% transparency of clinical data. Others, such as PBAC hearings, continue to be invaluable.
Budget impact
(Ghabri and Mauskopf 2018).
NHS Commercial Medicines Unit responsible for Patient Access Schemes and negotiation of outcomes-based pricing agreements. Introduction of the budget impact test makes a high budgetary impact the reason for manufacturers to reduce their price, either directly or indirectly, by lowering the cost-effectiveness threshold.Since 2010–2011, any recommendation by PBAC that has a financial impact for the Federal Government is considered by the cabinet. The estimated financial impact of a drug on the Australian drug budget is a significant predictor of the PBAC recommendation for reimbursement
Managed EntryReview will consider how to better managing uncertainty around early data and surrogate endpoints, such as collecting RWE while trials pending.Process available since February 2011. Infrequently utilised following outcomes of initial agreements, .
Political InterferenceHealth Secretary Matt Hancock’s recent intervention in funding decisions around cystic fibrosis drugs, Orkambi and Trikafta, shows that NICE’s independence can be compromised.Parliamentarians exert pressure on the Minister of Health (MoH) to enact listings once a positive PBAC recommendation has been made. However, MoH can deflect back onto Sponsor for not meeting the advice (conditions) of the PBAC recommendation. Strong commitment to this ‘independence’ of the PBAC.
Role of consumer and patient advocacy groupsThe Review proposes new responsibilities for external stakeholders, such as delivering quantitative evidence of disease modifiers to be used in assessments and decision making. Disparity of resource and HTA skills within the patient group community to address these issues could risk furthering the inequality and lead to a misrepresentation of some therapy areas.Increasing call, and opportunities for patient voice to be heard during evaluation of new medicines.
Pilot initiative whereby patient groups meet with PBAC members prior to consideration of a relevant submission, is to be formalised. Industry increasingly engage with patient groups, especially around relevance of clinical endpoints and capturing real impact of disease. Government focus on transparency has lead to development and launch of a publicly accessible Medicines Status Website.

References and Notes:

Lanning R. Does NICE hold the cards to drug pricing and reimbursement? PharmaField 30 March 2020.

Boyd N. A NICE Transformation? PharmaTimes Magazine, April 2020, p. 25-26.

*Medicines Australia 2018 COMPARE 4 Report


Health Care Systems 2.0

Add periodic pandemics to the ageing populations, accelerating rates of chronic disease, innovative technologies and price increases that are already challenging the durability of healthcare systems and the phrase, ‘a perfect storm’ comes to mind.


Prior to this recent challenge*, many countries have managed their health care system budgets by using a variety of prioritisation methods:

  • In the case of newer therapies, health technology assessment (HTA) conducted in an environment of accountability and transparency, uses technical judgements of clinical and cost effectiveness to determine the most appropriate use of taxpayers’ money.
  • For existing services, a value-based approach, i.e. stop using resources on items that contribute little patient outcomes, has become popular. Unfortunately, even if conducted systematically this is not so straight-forward. As noted by Professor Vlado Perkovic during a 2014 panel discussion, a survey carried out by the ANZ Intensive Care Society found only 5% of treatments given to an intensive care patient were supported by reasonable evidence. Similarly, in primary care, Mark Ebell and colleagues (2017) identified that just 18% of clinical recommendations in the literature were based on consistent, high-quality patient-orientated evidence.
  • A similar focus on system and process inefficiencies and waste have been successful. For example, the UK ‘Sustainable Development Unit’ measured an 11% reduction in greenhouse gas emissions attributable to the NHS between 2007 and 2015 (in line with targets) while the level of health care activity rose by 18%. By 2017, the financial savings associated with this environmental sustainability (mainly energy, waste and water) rose to £90 (AU$182) million annually (Pencheon 2018). There are no shortage of ideas on ways to tackle inefficiencies and waste (see Bennett 2013), however in healthcare systems under strain, who has the time?
  • In an effort to tackle ‘the crisis of medical excess’, Cochrane Collaboration launched a new field, Cochrane Sustainable Health last year. The aim is to engage its global network to focus on highlighting the overuse of medical diagnostics and treatments which harm people and also consume scarce resources leading to underdiagnosis and underuse in other areas.

Prioritisation decisions will face legal, political, commercial and ethical challenges

The pressure on budgets will escalate prioritisation decisions and as the impact is felt by more people, there will be public concern. Governments must proactively engage patients and the general public in the process. To date, those directly affected by access decisions become involved. This base of public participation needs to broaden to ensure continuing societal agreement with how decisions on spending finite resources are made. Understanding this, Littlejohn and colleagues (2019) have developed an online decision-making audit tool as a way to interact with stakeholders and help generate acceptance for the need for health prioritisation and the resulting decisions.

Get some patients - Yes, Minister - BBC - YouTube

As parodied in the episode of ‘Yes Minister’, The empty hospital (BBC 2007), a hospital with no patients is extremely efficient to run. However, placing a greater focus on preventative health is a better way to reduce demand on health care systems. This could include initiatives to provide education to improve population health literacy combined with Government services focused on the social and environmental determinants of health and incentives for individuals to make responsible health choices .

Health care is big business. There are many vested interests who will lobby hard to maintain or improve their position. Incentives will also be needed to encourage identifying opportunities to improve efficiency and eliminate waste, a priority for those currently in the system. The poor take-up of Health Care Homes is an example of how a good idea can be derailed.

Crunch time?

At that same breakfast, Professor Andrew Wilson ‘said the crunch point that would finally prompt action on health care reform would come when it was recognised that Australia’s states, which have very limited revenue raising capacity, could no longer afford to run hospitals. He was also concerned he said, about the affordability of healthcare for consumers, with rising out-of-pocket expenses, and a two-tiered health system that saw insured consumers able to access more extensive health care through the private system than those who used the public health system, even though 60+% of private health care costs were funded directly or indirectly by the public purse.’

Notes & References

*A prophetic report published last January by the World Economic Forum and Harvard Global Health Institute calculated that the annualised costs of flu pandemics alone are similar to those predicted to be caused by climate change. It recommends businesses (and Governments) to prepare to mitigate the impact of pandemics with the same urgency as they are for climate change.

Cartoon source

Globalisation and the pricing of biopharmaceuticals

As the Sponsor of a new medicine seeking listing on the national Pharmaceutical Benefits Scheme (PBS), pricing used to be relatively straightforward once a positive Pharmaceutical Benefits Advisory Committee (PBAC) recommendation had been received.

The Pharmaceutical Benefits Pricing Authority (PBPA), defunct as of 1 April 2014, would determine the price based on: (1) PBAC advice accompanying the recommendation and, (2) the Sponsor’s pricing submission. Calculation methods were explained in the PBPA Manual (last edition 2009) and, sometimes further discussion with the Pricing Section of the Department of Health (DoH) was required to finalise, for example, exact amount of cost offsets etc. From a company perspective, as long as you stayed above the specified ‘global floor’, the local price was a matter for the local affiliate.

Prior to August 2007 reforms, when the PBS was split into two formularies (F1, F2) based on the availability of a generic brand following lost of exclusivity, the ‘reference pricing method’, was most commonly used. This is where drugs are priced based on their relative safety and efficacy, as determined by the PBAC and documented in Therapeutic Relativity Sheets. Where drugs are considered to be of similar efficacy and safety, the lowest priced brand or drug sets the benchmark price (‘cost-minimised’).

The ‘cost plus method’, where a gross margin of 30% is considered reasonable based on costs declared by the Sponsor in the PB11b form, became applicable to a larger range of drugs (F2, multiple brands) after the reforms, with reference pricing only applying to F1 (single brand, on patent) drugs.

A Price Disclosure policy was introduced for F2 medicines. This was necessary for the Government to realise the savings when generic brands cost-minimised to originator brand prices. Generic companies were using the excess margin above cost, due to lower development investment, to incentivise prescribers and pharmacists. Various iterations to price disclosure processes have been extremely effective in finding the lowest viable price. This policy is almost wholly responsible for over 30% of PBS services currently being below the general patient co-payment ($40) and in no need of Government subsidy.

Continuing adjustments to policies and Health Technology Assessment (HTA) evaluation guidelines maintained Government pressure on prices and risk mitigation. This resulted in the need for Special Pricing Arrangements (SPAs) and Risk Share Agreements (RSAs), respectively. Rebates of 100 % are now the norm. When ‘effective’ (i.e. real) prices being paid for new medicines are lower than the global floor these must be confidential otherwise long delays to PBS listing are likely. This is because of the increasing number of countries who base their local drug prices on those paid by a basket of countries (international reference pricing). This approach is proposed in the USA as part of the Pelosi bill.

Where a comparator is listed under a SPA, preparing an economic evaluation has become a guessing game as to the effective price. Needing to use the published list price disadvantages a new medicine in the evaluation process.

Things became more complicated when the PBS Access and Sustainability Package, introduced in mid-2015, included a 5% price cut to all F1 brands listed for five or more years. As the Table shows, F2 is a smaller source of potential savings for the Government. Anniversary cuts were extended to include 10 and 15 year listing marks as part of the 2017 Commonwealth-Medicines Australia Strategic Agreement.

Affiliate pricing of a new medicine is increasingly centralised by companies as Government payers push to use taxpayers’ money wisely. In both situations, prices expected, based on perceived and relative value, may be very different to those modelled on the available clinical evidence.

Collaboration between payers and pressure for reform (2), including transparency of real prices, may result in pricing becoming very simple if companies choose to set only one global price.

(1) Impact of introduction of value-based pricing in Germany (2) See articles by Neil Gubert on cross-border collaboration and the Commonwealth Fund on drug pricing reform.

Photo source: BIG Maze, National Building Museum, Washington DC, 2014

Healthcare Buyer Beware

First screened at the Tribeca Film Festival in April 2018, and still available on Netflix, The Bleeding Edge is a documentary that could have easily been made about any sector of the health care industry.

No medical intervention is without risk, and although informed consent includes a discussion of potential negative outcomes, health consumers are invariably in no position to make an informed decision.

Firstly, they do not have the requisite medical knowledge, and no amount of internet searching can substitute for formal education and clinical experience in a field. Secondly, objectivity must be affected when a health issue is impacting an individual’s quality of life to the extent that he/she is considering something invasive, be it a medicine or procedure.

Consumers are encouraged to ask questions, and seek a second opinion. However, when you may have already waited months for an appointment, and then paid a substantial out of pocket for the consultation, it takes courage, as well as time and money, to seek the opinion of another medical specialist. This is a very real situation for patients, as confirmed by the Australian Government Department of Health’s newly launched Medical Costs Finder website, and as reported in the media last week.

ESSURE Medical Device Reports (MDR) to FDA during post-market surveillance^

For those who have missed seeing the documentary, it explores Bayer’s permanent birth control device Essure, Johnson & Johnson’s transvaginal mesh, the Da Vinci Surgical System, and chrome-cobalt hip-replacements. Patients who have experienced adverse effects are followed as they try to regain their health; search for answers; support others; and make efforts to raise the alarm. Unlike scientific data, the film personalises and, despite the MedTech industry viewpoint, it clearly shows what ill health, irrespective of the cause, can do to a person’s life.

The documentary also highlights how an intervention can be experienced very differently depending on your perspective. This issue is illustrated using PSA levels as the basis for prostate surgery in a 2018 video on value-based healthcare produced by the Metro North Hospital and Health Service in Queensland. Over diagnosis of prostate cancer and over servicing with prostatectomy are well documented. Urinary incontinence and erectile dysfunction are frequent side effects that are debilitating for patients, while from the health sector viewpoint, the treatment has been a success (see screen shots from the video).

This disconnect is behind increasing calls to integrate patient feedback into clinical practice by use of Patient-Reported Outcome Measures (PROMs) and Patient-Reported Experience Measures (PREMs) (see figure).

A concern focused on in the documentary is the lack of evidence required for medical devices to be approved for marketing in the US. The FDA’s 510(k) pathway enables medical devices to be approved if the manufacturer demonstrates equivalence to a device already on the market. This is considered less rigorous than the standards that apply to new medicines.

Patient Reported items (Source)

Parvizi and Woods (Clinical Medicine 2014;14(1):6-12 ) compare and contrast regulations for medicines and devices and explain that differences are a function of the nature of the challenges in defining and monitoring the safety and performance of devices under conditions of use. Namely, the large number of types of medical device in use; short timelines of innovation with a medical device typically changed by incremental steps every 1–2 years; and the main causes of adverse incidents being sporadic manufacturing faults, long-term wear (particularly in the case of implants) and operator factors.

The Therapeutic Goods Administration (TGA) is responsible for medical device approvals in Australia. Compliance with a set of Essential Principles (EP) for the quality, safety and performance of a medical device is required to be demonstrated by manufacturers to achieve marketing approval (ARTG listing). The rigorousness of requirements depends on classification of risk level for different classes of device. For example, for surgical retractors classified as low risk (Class I), a sponsor can self-certify that their product meets the EPs.  Active implantable medical devices (AIMD), such as pacemakers and those include medicines, tissues or cells, are the highest risk and must be assessed in full by the TGA.

EP#14 Clinical evidence states:“Every medical device requires clinical evidence, appropriate for the use and classification of the device, demonstrating that the device complies with the applicable provisions of the Essential Principles.” It is acknowledged that in some circumstances clinical investigation data are not available or are insufficient in quantity or quality (see Box 4 from Parvizi and Woods 2014). In this situation clinical investigation data from a ‘substantially equivalent’ device such as a predicate or similar marketed device may be used to support the safety and performance of the device under assessment.

In response to public concerns, the TGA published an overview of regulation of Medical Devices in late 2018. It includes that “The TGA has only recently started accepting US FDA 510k approvals to support applications for some implantable medical devices, and these applications are being subjected to further scrutiny by us to ensure that devices that use this pathway are meeting Australia’s requirements.”

Risk benefit evaluations are an ongoing conundrum for health consumers. Until the equation can be communicated with clarity, the same warning must apply as with any other purchase, caveat emptor.

Note: A week prior to the film release in 2018, Bayer removed the Essure birth control device from the U.S. market. The Essure contraceptive device was cancelled from the ARTG on 9 February 2018. Since the device began supply in Australia in 1999 until 6 August 2018 the TGA received 59 adverse event reports relating to women implanted with the Essure device. The reports included changes in menstrual bleeding, unintended pregnancy, chronic pain, perforation, migration of the device, and allergy/hypersensitivity or immune-type reactions. Surgery, including hysterectomy, was required in some instances to remove the device.


It’s almost MMXX!

Yes, 2020; a Leap year; summer Olympics; US Presidential race; and UN International Year of Plant Health!

Whatever is forecast with respect to Australia’s weather and economy in the coming year, here are a few predictions that haven’t quite come to fruition (Courtesy of BestLife):

  • In 1937, Nikola Tesla predicted that “within a century, coffee, tea, and tobacco will be no longer in vogue.” His idea was that “it will simply be no longer fashionable to poison the system with harmful ingredients.”  Tobacco, yes; but coffee, definitely not!
  • A 1951 edition of the magazine Popular Mechanics was confident that every family in the 21st century would have at least one helicopter in their garage. This guy in Cincinnati has achieved it!
  • In 1900,  John Watkins Jr., a curator at the Smithsonian Institution, predicted that by the 2000s, “there will be no C, X, or Q in our everyday alphabet. They will be abandoned because unnecessary.” This was before Alfred Butts invented Scrabble in 1938!
  • However, for those familiar with the habits of teenagers, in one facet, Watkins was accurate when he noted that people would only communicate with “condensed words expressing condensed ideas.”

On a serious note, the past decade has seen the Australian Pharmaceutical Benefits Scheme effectively flat-line at AU $11 Billion (US $7.45 B) per year in real dollars. This is despite the upward pressures of the listing of multiple innovative products, especially in the oncology and infectious disease areas; increases in service numbers associated with an ageing demographic; and 50% of the population managing a chronic condition. Forces pushing expenditure down have included highly effective pricing policies, in particular following loss of patent exclusivity; approximately 30% of prescriptions being self-funded as the cost is below the indexed co-payment threshold; and down-scheduling of products to over the counter and off the PBS.

While this stagnation is of concern to those whose livelihood depends on the PBS, i.e. manufacturers, other suppliers, wholesalers, community and hospital pharmacies; in political terms, the majority of the sector has been neutralised. Only retail pharmacies, and a successful negotiation of the 7th Community Pharmacy Agreement (7CPA) stand between the Commonwealth Government and budget control of the program. New and amended listings are carefully added for maximum political capital, with only those in the background appreciating the full extent of the delays to patient access.

Further policy initiatives should be expected in 2020 and beyond to make up the short fall in savings to Government committed to by Medicines Australia in the 2017-2022 Strategic Agreement (SA). Savings of AU $1.8 Billion (US $1.22 B) are to be delivered for reinvestment into listing of new medicines, however the delay in entry of Humira biosimilar competition has left a significant gap to date. The Government may make trade-offs between the Industry and the Pharmacy Guild, representing owners of Australia’s 5,700 community pharmacies, and the Pharmaceutical Society of Australia (PSA), particularly around services focused on ‘Medicines Safety’ as the 10th National Health Priority.

Other activities to expect locally next year:

—-My blogging companions—-
  • Review of the National Medicines Policy;
  • Roll-out of Tranche 2 of PBS Streamlined Process improvements;
  • Impact of full Cost-Recovery to take effect from 1 July;
  • Introduction of electronic and active ingredient prescribing requiring clinicians to take extra steps to prescribe a specific brand;
  • Further biosimilar uptake initiatives;
  • Continuing formalisation of consumer and patient input to steps in product R&D and Market Access;
  • Activity around proposed changes to the Supply Chain, which have not progressed in 2019. This has the potential for global impact in terms of price transparency and product access.
  • Increasing patient activism in New Zealand.

Thank you for your patronage during 2019.

Surviving Community Pharmacy

As the purchasing of medicines moves towards a commodity model in Australia, with off-patent (F2) molecules a marketplace, and ‘me too’ R&D programs and associated payer behaviour creating as much in the patent (F1) space, providers all along the supply chain are being impacted.

What are Community Pharmacists, as one of the key groups affected by stagnation of the PBS, doing to remain viable?

Community Pharmacy Programs and Services

The first Community Pharmacy Agreement (CPA) in 1990 between the Commonwealth and the Pharmacy Guild, representing pharmacy owners, introduced a new remuneration framework for pharmacies supplying PBS medicines and created incentives to optimise the distribution of pharmacy services around the country.

Specific programs and services appeared in the third CPA from 2000, and subsequent CPAs have included an ever-increasing number of remunerated clinical activities. These still represent a small proportion of the overall value of the agreement, but offer more revenue with no increase in costs. Hence, in addition to retaining existing components, such as 30-day dispensing, expansion of service programs are a key feature of negotiations of future agreements. Figure 1 shows the average annual dollar amount a pharmacy can expect to generate from the components of each CPA.

Figure 1. Actual Expenditure minus CSO from 3CPA onwards, divided by number of approved pharmacies. Note: Pharmacies purchase PBS items as stock and only claim this cost back from the Government following dispensing. # not including additional $600 million committed as part of Pharmacy Compact 2017. Sources: AIHW, DoH, ANAO, Pharmacy Guild.

This is despite continuation of Government payment for programs being contingent on demonstrating clinical and cost-effectiveness. A 2017 evaluation by HealthConsult was unable to make conclusive assessments on the benefit of Dose Administration Aids, Staged Supply, MedsCheck, Diabetes MedsCheck and Home Medicines Reviews conducted by pharmacists due to a lack of robust data. Further research is required in this, currently, evidence free zone.

The Pharmacy Guild and Instigo initiated the Health Advice Plus program in 2016 to assist pharmacies to maximise the opportunities and revenue afforded by the CPA programs. Based on 1,000 pharmacies, they recently reported that, of those pharmacies : 87 % have a private consultation room; 44 % are maximising their clinical Intervention potential; only 28 % are maximising MedsChecks with an average of 12 a month (up to 20 permitted); 56 % have not reached their DAA cap level (individually calculated based on previous 12 months); and 72 % are currently providing vaccination services.

The Aged Care Royal Commission Interim Report prompted this month’s decision by the COAG Health Council to name “Medicine Safety” as Australia’s 10th National Health Priority Area. The report also notes the need for the Federal Government, Pharmacy Guild and Pharmaceutical Society of Australia (PSA) to consider the effectiveness of the Residential Medication Management Review program and make it stronger and more accessible. A timely opportunity for pharmacy as the 7CPA negotiations continue.

From supply function to pre-primary healthcare

The Guild and PSA have recognised the need to broaden the role of community pharmacy and are actively working to expand the sectors offerings for treatment of minor aliments and preventative health (vaccinations, health checks, risk assessments, self-care, lifestyle issues).

Source: https://www.tga.gov.au/scheduling-news (accessed 301119)

From a policy and revenue perspective, this is also a sweet spot that the Government is prepared to support in the face of a healthcare system showing the strains of an ageing population, increasing prevalence of chronic diseases, higher public expectations and rising costs of new technologies. According to a RACGP report, General Practitioner workloads, inadequate Medicare rebates and decreasing numbers of graduates choosing the speciality, with numbers in training dropping by 20% year on year since 2016, will not see an improvement in the foreseeable future.

This is a gap that community pharmacy is driving to step into. One means is via down scheduling of Prescription Only medicines to Pharmacist Only (a process managed by the TGA) which has the added value to Government of reducing visits to the GP (capacity and expenditure benefit) but also the cost of these medicines moves to the patient’s pocket from the PBS (if listed). Table 1 shows the products most likely to be re-scheduled in the near future.

Meanwhile the debate about extending pharmacists’ scope of practice to include prescribing of Prescription Only medicines continues.

Figure 2. Pharmacy Mark-up: the increase in the pharmacy mark up between 2014-15 and 2015-16 is a result of the introduction of the Administration Handling and Infrastructure fee, replacing the previous percentage based mark-up. Source: https://www.pbs.gov.au/statistics/expenditure-prescriptions/2015-2016/cpa-exp-rpt-2015-16.xlsx (accessed 301119)

De-linking dispensing fee from medicine price

As successive Price Disclosure policies dropped the average price of many frequently dispensed former block buster molecules for chronic conditions, community pharmacies watched their revenue similarly plummet. Coupling payment for completing the same dispensing process to the price of a product was no longer such a good idea. The 6CPA moved compensation for dispensing from a percentage of product value to a flat fee. The Administration, Handling and Infrastructure (AHI) fee has stabilised the impact of price disclosure. Figure 2 shows the impact of this changeover comparing Government payment in the last year of the 5CPA with that in the first of the 6CPA when the AHI was introduced. Unlike PBS listed medicine prices, the AHI is indexed annually.

The 7CPA is due to commence in July 2020. Negotiations continue between the Australian Government, Pharmacy Guild and PSA.

Image source

3 Reasons why Medicines Shortages will continue

Mandatory reporting of medicine shortages† from 1 January this year has seen new notifications to the Australian Therapeutic Goods Administration (TGA) increase by over 400% (n=1,455 for 2018-19) compared to the previous period (n=274).  Currently, over 10% of the drugs on the TGA ‘list’ are classified as critical with the potential to have a life-threatening or serious impact on patients. 

Miljkovic N et al. Results of EAHP's 2018 Survey on Medicines Shortages. Eur J Hosp Pharm 2019;26:60-65.
Miljkovic N et al. Results of EAHP’s 2018 Survey on Medicines Shortages. Eur J Hosp Pharm 2019;26:60-65.

The FDA Drug Shortages Task Force Report, released today, compared drugs that went into shortage from 2013 to 2017 to similar drugs that did not go into shortage. Drugs in shortage were more likely to be relatively low-price, in particular genericised sterile injectables, including anaesthetics, chemotherapy and pain treatments. Australian hospital (2017) and European Association of Hospital Pharmacists (EAHP) 2018 Medicines Shortages surveys reported similar groups of drugs most often impacted (Figure 2 from the report shown).

Shortages can and do have a significant impact on patient care, especially when there is little or no notice. Required reporting provides authorities, health care professionals and patients time to prepare. Unfortunately, this measure, like those taken elsewhere in the world will not reduce the problem because:

(1) Commodity pricing policies

Treating drugs as commodities exposes them to the rigours of supply and demand.

Although demand is increasing globally, due to ageing populations and availability of more effective medicines, the FDA Task Force found ‘prices rarely rose after shortages began, and during shortages, production typically did not increase enough to restore supply to pre-shortage levels.’ This points to a ‘broken marketplace‘, where scarcity does not result in the price increases predicted by basic economic principles.

RELATION BETWEEN PRICING POLICY AND MEDICINE SHORTAGES. From https://publicaties.vereniginginnovatievegeneesmiddelen.nl/magazine/mm2019uk/medicines-for-tomorrow/
RELATION BETWEEN PRICING POLICY AND MEDICINE SHORTAGES. From https://publicaties.vereniginginnovatievegeneesmiddelen.nl/magazine/mm2019uk/medicines-for-tomorrow/

As the graph shows the relationship between introduction of a preference policy in the Netherlands, where only the cheapest medicine for a specific disorder is reimbursed, has resulted in a greater proportion of these medicines being in shortage.

Companies seeking to enter the generic marketplace may not have the manufacturing history and quality safeguards in place to ensure sustainable supply. This is despite providing guarantees to Governments who preference suppliers based on price.

The production and supply of pharmaceuticals is regulated by Good Manufacturing Practice (GMP), as prices decrease, companies may consolidate manufacturing facilities to maintain profitability. Hence, those medicines with the most competition will be the most vulnerable to shortages.

(2) Expansion of reference pricing

As more Governments, including the US (see Pelosi Lower Drug Costs Act 2019) introduce reference pricing into their drug procurement policy mix, others are losing their appetite for the quid pro quo of access to new products at ‘hidden’ prices. The Dutch Health Minister has recently called to ignore the confidentiality of pricing agreements, while the Australian pharmaceutical industry was rocked last year by the presentation of a poster listing rebates by ATC code at an international conference. In addition, changes to supply chain rebate arrangements continue to be progressed by the Australian Government despite concerns around the impact on availability of new drugs.

There is a real possibility that companies will set a price for a product and that will be the price, irrespective of country. This will restore the marketplace but patients in countries that have come to expect, and demand, substantial discounts on new medicines will be left waiting for access.

(3) Solutions to date have been ineffective

TGA Annual Performance Statistics. Table 80. https://www.tga.gov.au/book-page/15-reporting-medicine-shortages
TGA Annual Performance Statistics, 2018-19, Table 80.

The EAHP 2018 survey found that medicines shortages have become more troublesome since the last survey in 2014, with 91.8% respondents reporting shortages impacting patient care. The FDA Task force found that the number of ongoing drug shortages has been rising, and that their impact is likely underappreciated. Note: the FDA infographic shows shortages averted, the how likely includes requested intervention by other suppliers.

Manufacturing issues continue to be the most common reason for supply shortages. As reported in 47% of cases to the TGA in 2018-19; and 37%, plus 27% other quality issues, to FDA in 2012. Medicines are not commodities.

The FDA conclude that: ‘The root causes of shortages involve economic factors that are driven by both private- and public-sector decision-making.’

Private sector decisions serve business interests. While public sector decisions aim to benefit societal, and political, interests. The Task Force suggests quality ratings of manufacturing facilities and new contracting approaches with incentives as possible levers.

In the meantime, there will always be someone seizing the day, in this case, a plethora of global wholesalers!

Notes: † Defined as when supply of a medicine in Australia will not, or will not be likely to, meet the demand for that product in Australia any time within the next 6 months; *Reportable medicines are Registered Schedule 4 (Prescription Medicine) or Schedule 8 (Controlled Drug) products, and certain non-prescription medicines considered critical and listed in the relevant legislative instrument. Chain photo from Google Images