The 'Dispatched' Podcast
BioPharmaDispatch - discussing the issues impacting the Australian biopharmaceutical and life sciences sectors with Paul Cross and Felicity McNeill.
The 'Dispatched' Podcast
The 'Dispatched' Week in Review Podcast - 22 August
The minister focused on NDIS reform at this week's National Press Club address, suggesting that it is taking up a lot of his time. Implementing the HTA Review will be one side of a two-sided coin. While it might frustrate some, it represents a unique opportunity to secure positive outcomes from an inevitable negotiation.
Hello and welcome to the Dispatched podcast. We can review. My name is Paul Cross. As always, delighted to be joined by my co-host, Felicity McNeill, PSM, Chair of Better Access Australia. Hi, Felicity.
SPEAKER_00:Hi, Paul. So the year is over for you. Oh,
SPEAKER_02:yeah. Thank goodness. Patient officially died last night.
SPEAKER_00:People who listen regularly, you know that means Carlton lost again.
SPEAKER_02:Look, if Carlton had been in Quebec... This person would have been put out of their misery about six months ago, I think, given their euthanasia loss.
SPEAKER_00:Oh, yeah. It's good to have it over. I've got a few more days to go.
SPEAKER_02:I realised this year that it causes me far more pain than pleasure. Oh,
SPEAKER_00:you've only just realised?
SPEAKER_02:I have realised it. So I emotionally detached this year.
SPEAKER_00:Interesting. As someone who's known you for, what, 10 years now, I'm really gobsmacked that it's taken you this long to realize, but that's okay.
SPEAKER_02:I know. Therapy. It's good. It's like an abusive relationship, really. But anyway, it's good to catch up. As always, some interesting things to talk about. Did you catch the minister's address at the Fresh Club this week?
SPEAKER_00:Yes, which I think most people thought was going to be about health, but was mostly about the NDIS.
SPEAKER_02:Well, that is health these days.
SPEAKER_00:It is.
SPEAKER_02:You didn't go?
SPEAKER_00:No, no, did you?
SPEAKER_02:No.
SPEAKER_00:Oh, but you're a journalist.
SPEAKER_02:Well, I've been a member of the, well, I was a member of the National Press Club for a very long time and they recently decided to give a platform to that disgraceful anti-Semitic Jew-hater, terrorist sympathiser Francesca Albanese
SPEAKER_01:and
SPEAKER_02:that was it for me. I'm generally not against deplatforming people, but she's a race baiter of the worst order, terrorist sympathiser, openly sympathises with Hamas, the worst terrorist organisation in the world.
SPEAKER_00:Yes.
SPEAKER_02:And I just thought, well, who's next? Are you going to give Khomeini the Ayatollah one? What about Nasrallah? Of course, he died, but Sinoise... All of these people, are you going to give them a platform? You've got to draw the line somewhere. And she is a terrible human being with what she has said about Jewish people. You know, this is deeply personal for me. I do. And I just thought, no, no, that's not going to work for me anymore.
SPEAKER_00:Yeah, sometimes we actually have to take a principled stand and– is something that sometimes hurts our businesses and our opportunities.
SPEAKER_02:Yeah, I don't want to lay the point. It's bad enough that our politicians sound like first-year politics students when they talk about Israel. Mm-hmm. Because, you know, as Douglas Murray says, most of us in the West are fighting diabetes. Israel's fighting for its existence. Yeah. And I always get abusive emails when I talk about this, and I don't particularly care. Abuse away. You can't hurt me. But... Some of the public discussions about this issue in Australia in recent weeks have just been absolutely appalling.
SPEAKER_00:Yeah, it has been. And the abuse of people who want to actually express a view for the Jewish community and the Israeli community is horrific. Well, we're
SPEAKER_02:recognising this Palestinian state. The Palestinians have had a state in Gaza for 20 years and they turned it into the biggest terror camp in human history. So recognize a way and you'll see that it makes absolutely zero difference. But anyway, let's not talk about that. I thought it was a really interesting address about the NDIS. He's got a lot of challenges in that program. Obviously, the autism community have not responded well, but... I agree with what he said. The program was not designed with that in mind. And that's not to denigrate the lived experience of people with autism. But the NDIS, I think most of us supported it and the additional Medicare levy that was intended to help fund it because we had an understanding of who it was for. And that was– I think a lot of the drivers of it were– parents who are raising severely disabled children or looking after severely disabled adult children. And when you read that 7 out of 10 new participants in the program are children with autism and the percentage of children who are NDIS participants, and this is not– I'm not denigrating– their experience. But I think the Minister was right in saying this is not the intention with this program.
SPEAKER_00:I think it's a challenging time because many in the disability community like to see disability separate to health. And in actually combining the two portfolios, the government has sent a very clear signal that there is significant overlap and we need to actually address when something is a health issue and when something is a disability issue access issue. And I think that I've had practitioners talk to me over the past few years where because a particular disease or condition isn't covered by the NDIS, they've tried to diagnose as autism because once you've got the certain category of that, then you're eligible for all sorts of rehabilitation and support services. And I think what the health minister is trying to say is that We do have an issue with autism in the country, and it's globally an issue. There is a changing perception and prevalence of this condition, and it is a health issue. It's a chronic health issue, the way that perhaps diabetes is a chronic health issue, a lifelong issue if you're diagnosed as a child. And how do we actually tackle it as a health issue? And I think the fact that they're talking about there needs to be a separate program Oh, I love that. It's a bit like the NDIS report that talked about how many people come onto the system and when people come off. Is it temporary? Is it permanent? Is the objective to get you sufficiently well and managed in your care that you can self-manage? So I can understand why parents are frightened because it took them a long time to get proper access and support in making sure their children had an equal start at life. But we've also got a problem with the way that the system gears. As you always say, water finds where to run, finds every crack to run into, and that's where the system goes. And the growth in the system is extraordinary. And we have to tackle that because we also need that kind of investment in primary care health.
SPEAKER_02:Yes, water finds the fastest path downhill. Yeah. And money's a bit the same. The fact that there are no... Every autism diagnosis now is moderate to severe because they're the ones that qualify for the NDIS. That's a very objective response. It's like the pink bats 15 years ago. It was a system that was rorted. It's like the new battery subsidy for wealthy people to put batteries in their homes. That is going to be rorted. It's going to be very hard to avoid that because– That's how this system works. I'm not saying that these families are doing anything wrong. Their child receives a diagnosis and they access the support that is available to them. The government has decided that this was not the policy intent behind the NDIS. We need to reform it. I'm glad the coalition is backing the government in this. Because it's much easier for Labor to do it than it is the coalition because it's social service. And I'm not saying it's easy, but
SPEAKER_00:the world would end if the coalition did this. There's a trust within the community that a Labor government will seek to do the right thing.
SPEAKER_02:Yeah, so that's good and I think it's very courageous of him to do it. And good luck to him because– You know, sustainability arguments are not things that I buy into because they're generally political constructs, but the NDIS cannot continue to grow at the rate of one PBS every 18 months.
SPEAKER_00:No, it can't.
SPEAKER_02:And that's just common sense, and there's a lot of stuff going on in there that shouldn't be going on. And I did note that– NIB did a big capital raise a couple of years ago, the health insurer, to get into program management for the NDIS. They acquired, I think it was seven program managers and it hasn't really worked out for them. So I suppose the logical extension of that is, the thinking behind it is, well, just because you can run a health insurer doesn't mean you can run an NDIS program manager. They've lost a lot of the clients that they had or participants, I think they're called now. Participants, yeah. It's interesting. So it's obviously going to take a lot of the minister's time and I'm glad that he devoted that address to it so we didn't have to hear the line, that incredibly glib line, Medicare card is all you need, not your credit card.
SPEAKER_00:And do you know why that's why the– The community that supports children and adults with autism is so nervous because they know a Medicare card is not enough. So they are that lived experience of until they had access to the NDIS, everything they were doing was predominantly out of pocket to support their children and or reliant on a public health system that took so long to get access to the developmental impacts of those delays were significant. So yeah, why do people think Yes, because it actually does a lot more to bridge the gap and the reality of that green Medicare card doesn't really get you anywhere.
SPEAKER_02:No, no. Did you spend much time watching the economic roundtable this week?
UNKNOWN:No.
SPEAKER_00:No, I've got to be honest and say I didn't, but I have enjoyed immensely the political, the commentaries in the various papers.
SPEAKER_02:Remember we said a couple of years ago that the outcome's preordained because that's the only reason government hold these roundtables. Absolutely. It's like reviews to get stakeholders to agree to what they want. And about three days after we said that, what was reported?
SPEAKER_00:Yeah, Treasuries pre-written outcomes were leaked.
SPEAKER_02:And a shock sent into a tax increase outcome.
SPEAKER_00:Yeah, it's quite scary. And I think as we spoke about through the past two months, there was no one from health in that space on that table. So that sent a very clear signal that health is still, and we see that in the budget papers, the Treasury, you know, and we had the Treasury forecast, the intergenerational reports, and then the social budgeting. Health in Australia is still seen as a cost factor. not a contributor to productivity. And the fact that that roundtable for three days didn't address that issue still sees it as a cost, not an investment. And, yeah, like I said, we knew. It was always going to be about how can we tax a bit more and how can we make a few more haves and have-nots.
SPEAKER_02:And that's going to be very hard to break that mindset because the institutional framework presupposes health as a cost. Yeah. I noticed Mark Butler said, well, I need everyone to convince my colleagues that investment in the PBS is about productivity. And, yes, some of it is. Some of it's not. Some of it is about end-of-life care, and that's fine. I've got no issue with that. But the medicines that actually do support productivity are the ones least able to navigate the system.
SPEAKER_00:Absolutely.
SPEAKER_02:So because there's generally large patient populations, you see this with chronic conditions, diabetes.
SPEAKER_00:Migraine.
SPEAKER_02:Migraine, all of those things. You see it with obesity now that these products are having a pretty difficult path. So productivity improvement is not something health decision-making has ever really recognised because it would mean having to pay more and they don't want to do that. And we've written a lot this week about the shifting language in PBS decision-making. And that's a reality over the last 10 years. It's gone from never mentioning conditions to basically making conditions a standard feature of outcomes. Now, my argument is that it shouldn't. It's ultra-virus. PBS doesn't have the power to do that. But if stakeholders and ministers are not going to push back on it, they're going to do it. And I'd like people to think about this. In terms of something like the HTA review, this is going to be transacted via an advisory committee that, one, has expressed a pretty sceptical view about faster access, and that would be polite to say that it was sceptical, but has almost total power over– well, it seems to be exercising almost total power, except where the minister chooses to intervene, which is every now and then on specific products–
SPEAKER_00:Yeah, and the recommendations in the HTA review that would give greater power and allow them to dictate conditional recommendations. I mean, the only reason some things happen is because the minister still has the power. The moment you take that away, as you've written and we've talked about many a time, we end up with a Pharmac. And Pharmac never set out to be what it became. but that's exactly what it became because there was no intervention. And I find it when you've had New Zealand patients come and talk in Australia, their abject horror that a minister might interfere in the system to actually help a patient and that that's somehow corrupt as opposed to, oh, no, that's the elected representative. And government should be accountable to the people. Independent Electoral Commission? Absolutely needs to be 100% independent of any political interference. Everything else is pretty much up for grabs, and I actually want my minister to every now and then look me in the eye and say, you're right, I need to do something, as opposed to the usual put your arm out, oh, it's part of the independent PBAC or MSEC, and I couldn't possibly do anything until they tell me to do anything. Ministers are elected to do something and to be brave, and I think when you see what's going on with the NDIS, and some of the other programs, this is where ministers make decisions, set the agenda, show leadership, and turn around and say, I want this to change.
SPEAKER_02:Yeah, the PBAC is not independent. No. People need to eradicate that word from the language. They are free to operate within the remit established by the minister. The minister can sack them all tomorrow. I know
SPEAKER_00:you keep writing to him asking about Paul, but come on. He's
SPEAKER_02:quite clear about that if he's not happy with them. He can remove them. He can remove the entire committee. He can remove individual members. I'm not saying that he should or would do it. I'm saying that an independent committee does not serve the minister's pleasure. No. So it's pretty clear they don't establish their own regulatory framework. The minister can impose all sorts of requirements on them. Now, the problem with the HTA review is that the language that the advisory committees use, not just PBAC, but the Medical Services Advisory Committee and the minister have used, there is quite a big gap. Between the two. Yeah. So it sets it up in conflict. So what are the committee going to do when the minister says, I want you to do this? Are they going to say no? They're not independent to say no. No. And I think my view having worked in the system is tension is good. Tension is good. And I don't think anyone should be– reluctant to embrace it, that if the ministry is unhappy with the committee, they're generally unhappy because the community is unhappy.
SPEAKER_00:Yeah, I mean, one of the ones that I always reflect on is 2019 and Kim Raya. And it was rejected and it was basically sent back to MSAC. And we all know that MSAC was told by the minister to sort this out because they put it in the public summary document to say, we've been made to do this by the minister, so we'll give you this small patient population. Now, here's the kicker for me on that. They're not technically public servants, but they do sign up to comply with the Public Service Act and to do the right thing. There is no... time on earth when I would in a public forum say I told the minister one thing and he made me do something else and yet that was a time when we should have seen the real warning signal and encouraged everything to pull back a little. Now obviously COVID happened and so the minister showed what he knew to do the right thing there which is just ignore MSAC and PBIC and set up telehealth and set up access to vaccines and medicines the way it is but we need to be mindful that a committee that's employed by the minister is not independent and should not be making disparaging or contrary statements statements to the minister just because the minister asked them to do something or look at something. Because that would be like, you know, if you in your time working with your particular minister had said, you know, Felicity, we'd like a briefing on this. And I'd say, well, you know, not sure. Don't really agree. Not a problem. You're the minister. I will give you that briefing. I don't then turn around and go into estimates or go anywhere else and say, you know, I've been made to do this and I don't want to do it.
SPEAKER_02:No, well, I know how one of the ministers I worked for would have– no, I do know exactly how he responded to– advisory committee is trying to box him in. And he didn't like it. I don't think any minister likes it. And you can see Mark Butler's frustration with the committee over the deferral issue, over the women's health issue. He's got every right to be frustrated and he's got every right to put his foot on it. And that's why we elect politicians. And look, thankfully that patients in New Zealand have sort of worked out that it's a massive scam and they've been ghastly over this issue. And kudos to to David Seymour and the government over there who've forced Pharmac to establish the consumer committee that's full of people, Pharmac's biggest critics. I think it's a great innovation. You've got Malcolm, you've got Rachel. all of these people who have just had enough with this system and I would just like to attend that first meeting. It would have been absolutely fantastic. But they've identified culture as a real issue. Now, we have the professionalisation of consumer representatives in Australia where you've got this ridiculous consumer consultative committee, the CCC or whatever it's called, that sits inside the Department of Health. And it's just absolutely ridiculous. And so that's the institutional orthodoxy and the institutional– framework, that is a problem because it's resistant to criticism, it's resistant to change. And the only way that change can often be transacted is through our elected representatives. If our elected representatives choose not to engage in these advisory committees, then you get what we've currently got, which is these ridiculous cornucopia of conditions imposed on these outcomes. And has the Is this actually good for decision-making or is it not good? But as we wrote to the companies today, if you keep accepting these conditions, don't be surprised when they keep imposing them. And it's not a fixed environment. They're going to continue to evolve this. It's like dogs. The more treats you give them, they're going to want more. They're going to keep evolving. If they get away with these conditions, they're going to start imposing more and more and more. and you've got to be thinking about the HTA review, and there's a lot to think about, okay, because I hate to break the news to everyone. You're going to have to pay for it. No. You're going to have to pay for it. The idea that the government's just going to find$2 billion and stick it in whatever outcomes they decide to implement, implementation of these outcomes will be contingent on a new PBS pricing framework. And if you don't want to– if you want to deny that and choose to ignore it and pretend it's not there, like, you know– You can be King Canute on this or you can actually be sensible and start to prepare for it. Now, that doesn't mean you've got to come out and publicly acknowledge it, but I do think you've got to get on the front foot because the phone call is coming and it will go sometimes in the budget, sometime probably in the next budget process. We need to talk about this expiring statutory price framework.
SPEAKER_00:Well, as the agreement says that– Discussion of the next agreement should not occur before the 1st of July 2026, which aligns with the forthcoming budget process where you take decisions taken but not announced and then you…
SPEAKER_02:Yes, and if you can think like an adult… Now, I'm going to be blunt. I know the industry loves giving itself awards. And, guys, you're at risk of being considered unserious, okay? This is absolutely ridiculous. But think about it. You need to think about it. In all the years you've been doing these negotiations, dating back 20 years or longer, you have never, ever, ever got anything positive out of these negotiations generally? I mean, you think about it. We had this discussion a few days ago. What has any government ever conceded on the PBS that it didn't want to? What is an example of where it's been dragged, kicking and screaming to do something and spend money? I could think of one thing.
SPEAKER_00:Which is?
SPEAKER_02:ODT. The Reform of Opiate Dependence Treatment because it was illegal.
SPEAKER_00:Yes.
SPEAKER_02:The arrangement. But I can't think of any other example where they conceded to something, they agreed to something they didn't want to do. I can't think of anything. I mean, you've got the free trade agreement. That's exceptional. That doesn't count because of US government. But I can't think of a thing.
SPEAKER_00:No, in the PBS.
SPEAKER_02:No.
SPEAKER_00:No. No, I
SPEAKER_02:can't. But in your next negotiation team, you actually have an opportunity to transact something positive. If you genuinely think that the HTO review is going to deliver positive outcomes, and you know I'm very sceptical about that, because positive historically means positive for government, and that doesn't mean it's not positive for the industry. Formula Resplit being an example, but the government was the main beneficiary of that. You have an opportunity to do that, but you need to think about the other side of the coin, is the government's going to want their share to help fund it, because you can't... You think about Mark Butler going into a budget process, which is a year-round process, everyone. It happens... ERC meets all the time and he's one of the battalion of ministers on ERC. Can you imagine him going in there and saying, these HTO review outcomes are going to cost us$1 billion to$2 billion? We've got an expiring PBS statutory pricing framework in mid-2027. Let's not worry about that. It'll actually cost us money when it expires. There is no world in which that happens. That He's going to go in and say, we think it could cost us$1 billion to$2 billion, and we think we can negotiate with the industry to cover the cost of that. And I know people in the industry are sort of mentally resistant to it, but that's the reality. And when you read the incoming government brief that was in flashing– it was like one of those– You know how they get those drones to do displays? Yes. They were screaming off the page. We have to keep quantifying the savings from statutory price reduction so we can continue to list PBS medicines. That's telling you there's going to have to be a new negotiation. And it could be true that in one of the rare occasions in history, you actually get a pretty good deal out of it. But you've got to be prepared for it.
SPEAKER_00:Yeah, look, that's true. And the challenge that the industry gave itself was from the last agreement, obviously we need something because we already agreed to the price cuts up front. So you've now got all your investment in this HTA review, which has been very heavily reflecting departmental objectives. But you've got a health system that is buckling. You've got a budget that is concerned with affordability. There are so many reviews that are recommending new investments all over the shop. So it's also how important is what you're doing. So I think sometimes, I mean, you can take it as for granted, the statutory price cuts stop every five years and that was a departmental strategy, which is as long as it Time's out. Every five years, you can recount the save. That's our strategy, not industry's. But they are the baseline now. That is the baseline of what finance will expect. The biggest challenge for that baseline is the whopping 36.82s and things that were agreed to in part of the last agreement, these massive grabs for money. So the question becomes, how much do you want change as well? I think you have to have an open mind about, well, this is what the review suggests. I know what I want is a patient and so far, you know, where do we fit in? But there will be a price for what you ask for. So how much does it deliver for patients and also for your bottom line to actually then agree to the other offsets to make it possible? And I think that's a very... sophisticated conversation the industry needs to have and we as patients need to have because I know what we want and I am genuinely concerned about chronic disease. and the lack of access to those medicines. I think it is the greatest wicked problem that Australia is grappling with now because it's chronic disease that's doing more damage, leading to more of the hospitalisations in the acute care setting, which leads to much higher costs. The fact that we still separate the National Health Reform Agreements from investment in primary care and we don't link and we don't have KPIs and we don't have, you know, if I fund this, I expect a reduction here. you know, the fact that we're not that sophisticated yet worries me. And those are the kind of strategic thinking and ideas that people have to have. But what I do worry is that once you have something, you know, the false economy is investing good money after bad. And so the industry also has to decide, is this HTA review good or bad? Like, are you really going to get something that is worth what you're going to do elsewhere down the line?
SPEAKER_02:Well... I think they're pretty deep now. I mean, I don't think there's any backing out. Look, I suppose my view, you're right, it needs to be if we do this and we do this and we do this and this is how patients will benefit. To get to that point, that's got to be the framing of the discussion. To get to that understanding, I think the opportunity for the industry is to understand 2015 you gave up$6 billion and got nothing for it. 2017 you gave up another$2 billion and got nothing for it. In 2020 you gave up net$2 billion, but probably$3,$4,$5 billion because of the generic price increases, and you've got to review for it. Now, yes, in all of that, you essentially, you've helped maintain that bipartisan political commitment to list everything that's recommended. I mean, that has been the case since the PBS was established, so somehow you have to pay for that now, but that's fine. You've got this review. Now, in this follow-up negotiation, which is obviously coming, the opportunity, I think, is to say, well, actually, if we've got to give up some more savings, which we obviously do because the framework has to be renegotiated, and as you say, the government's going to want some grabs. As I always say to people, if I'm in the Department of Finance, I'll say, if you are willing to give up 36%, I think you can give up 50% next time. That's what they're going to say. So you need to start thinking about that. With that new framework, if you truly believe that the HTA review is the panacea, then you might actually come out of this square. And that's the first time in a very long time that that will have happened. Kudos to all of those who are going to be involved in it if they manage to pull this off. But I think that's the goal. I just hope I'm hearing some concerning things about where the view is at that, oh, no, we've already paid for the outcome. No, you haven't. The way government budgeting works, just for everyone's information, when a government budgets$2 billion in savings, that's it. It's gone. It's spent. There's no secret bank account. It doesn't go off to Switzerland or somewhere and sit in someone's bank account. There's no credit card. There's nothing like that. It doesn't exist. It gets spent on something else. It's been used in the budget process. So here's the opportunity that when the new framework is negotiated, you can use that to support– the HTA review outcomes about which people seem genuinely excited. You know, I'm very skeptical about it, but they seem excited about it. So that's the opportunity. And if you do manage to pull it off, it'll be an historic and almost unique achievement. Yeah. Okay. All right. Well, maybe I should establish my own awards. I can think of some, you know.
SPEAKER_00:We have discussed this
SPEAKER_02:before. Worst example of. I mean, it's just, come on. It's like some of them are, I think some of them are really interesting, particularly ones that are patient focused. I think that's great. Giving recognitions to patient organizations and advocates who, you know, are up against it. They're not, you know, within the institutional framework. Yeah. I think that's pretty good. You're either a serious industry or you're not, in my view. But yeah, keep the suggestions coming. We do have our AI event in November. It's really struck a rich vein of interest, which is interesting. Andrew Wilson, Professor Robin Ward is going to speak at it. Everyone's very interested in AI. Yeah. So it's going to be a great day of learning for me, I think. I've been somewhat of a Luddite on these issues, but it is interesting and it's coming fast. So hopefully people, I think they seem quite engaged in it and interested. So I'll be looking forward to that. But thank you, everyone. Thanks. for the feedback. Thanks for listening. Always happy to take any questions or input you might have. And yeah.
SPEAKER_00:Enjoy sitting week next
SPEAKER_02:week. Oh, yes. Here we go. Two weeks of FIFOs. Yeah. Thank you for today.
SPEAKER_00:Thanks, Paul.