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 - 29 August
Patients should never accept a decision-making framework that requires them to sacrifice themselves for a mythical collective good, which is just the government getting the best deal for itself. More evidence of why we need to know what discussants present to HTA committees, and how they reflect personal opinions and ideologies. Financial results that confirm pharmacy's increasing role as a health destination.
Thank you.
SPEAKER_02:Hello and welcome to the Dispatched podcast, Week in Review. My name is Paul Cross, delighted to be joined by my co-host Felicity McNeill, PSM, which for those of you who don't know stands for Public Service Medal, which is a very prestigious honour in Australia.
SPEAKER_00:Very sweet.
SPEAKER_02:Well, it's like an Order of Australia for public service.
SPEAKER_00:Yeah, but you know, you get it for just doing your job and being an executive.
SPEAKER_02:No, you don't. Well, they went through a bit of a crazy period a couple of years ago, but... where one secretary decided to give one to the EA and so they all raced. There's a lot of EAs
SPEAKER_00:for PSM. Not that they don't do good jobs. They do very good jobs. I make light of it many a time but I am always grateful and I have every letter that the patient groups in particular wrote at a time when I think I was more known for cutting the PBS than listing but those letters from those patients and from individual community members that's when you say yes because that's what it was about that they bothered to do that for me so they know who they are and
SPEAKER_02:yeah it's not an easy thing for public servants to be awarded they're probably only giving to federal bureaucrats 15 to 20 a year
SPEAKER_00:maybe so the rule is that there's 100 available for the year 50 for the Commonwealth 50 for the states and territories
SPEAKER_02:I don't give 50 out a year though oh
SPEAKER_00:no it's not like a quota system it's the maximum so during COVID now we have the special COVID honour roll of PSMs and a awards. Oh yes, we had the COVID honour roll.
SPEAKER_02:Okay, they lost me with the COVID honour
SPEAKER_00:roll. So they allowed some extra during that period.
SPEAKER_02:Well, I know I make light of it, but I don't mean to. You did amazing work when you were running the PBS. It was a really significant era of strategic reform that made the system better.
SPEAKER_00:Well, we like to think so, but I think when you make such strategic reform You have to have a long-term plan and you have to maintain stewardship, which is the balance. You can look at my PSM and say, you know, for taking$20 billion or$26 billion out of the PBS but reinvesting$6 billion in medicines alone and closing the gap and all that stuff. The point of that is doing something that is a fundamental change means you must look at how you then continue to grow and support the program and use those reforms to build and to be ambitious, to consider different changes. So I remember all during that time in the PBS Access and Sustainability place, I'd been saying since 2013, price disclosure was irrelevant. It's something that cycles through. You're going to need to start pulling it back in the longer term. All I really wanted to focus on was the growing pipeline of broader access to more expensive medicines, particularly in chronic disease I'm in the irony right now and how we actually created a framework that allowed them to come in and to to be promulgated more broadly amongst the community because I could already see what was starting to happen with the biological demods and that promise that we gave the community that if we did all these things and when they became cheaper the principle of expansion should be there and I have found it really difficult as someone who worked in the system and now agitates from the outside to what And I think the thing that really struck me about your article this morning is when you are running that part of the system, Everything is at the population level because that's how we can disaggregate and disassociate from the negative consequences of our actions. And one of the things I always had in my whiteboard, and anyone can tell you was in the middle, who do I work for today? And there used to be photos. There used to be an actual group of people in there because when I've got 15 different issues going on, multiple reforms going on, it is very easy to lose sight of the patient who is looking at you, begging you to actually make their life easier and I think that's something that needs to change and I feel that it has been severely lost.
SPEAKER_02:Yeah, so the article I think you're referring to is the one where I talked about Ayn Rand.
SPEAKER_00:Yeah.
SPEAKER_02:Now she's a controversial historical figure supported by many Loathe by others. Yeah. But I had to go back into my very long memory of books that I'd done at school. And I did Atlas Shrugged, which is probably her major work as a novelist. I did that when I was about 15 or 16. It was 1,000 pages. It was a solid read. It does make me smile, though, because at the same time, whilst I was reading that, I was reading about Horatio Nelson in Geoffrey Bennett's book, Nelson the Commander, which has stuck with me forever because he's was just such a fabulous man.
SPEAKER_00:He was.
SPEAKER_02:I know he's most famous. I know I'm departing from the script a little bit, but I know he's most famous for the Battle of Trafalgar because that's where he died, but his feat at the Battle of Cape St. Vincent. It's just boys' own stuff. You know Patrick O'Brien who wrote Master and Commander? That became a movie that starred Russell Crowe as Jack Albrey. He wanted to style the Jack Albrey character on Nelson, but he couldn't do what Nelson did at Cape St. Vincent because no one would have believed what he did because it was just not plausible. He was part of a formation. He was just a captain at the time. He left the formation, which he never did in the Royal Navy. He attacked the Spanish fleet. They're outnumbered two to one in this battle. He attacked the Spanish fleet head on. Ship got blasted. He was blinded in an eye, took shrapnel because in those days it was splinters from the mast blowing up, took that splinters in his side, Said, right, we've just got to barge. So they basically just attacked one of the Spanish fleet head on, collided with it. He led the boarding party, literally shouted glory or death, blinded in one eye, mind you. Then whilst they were fighting, they got tied up with another in the Spanish fleet, which he then boarded that as well.
UNKNOWN:Wow.
SPEAKER_02:And then after victory, seizing these two ships, he lined up all the survivors and he shook their hand and congratulated them for their gallantry. He was just a fabulous man, Horatio Nelson. And then in his next battle off Tenerife, he was shot. This is when he lost his arm and it was amputated by a surgeon and the only thing he complained about was the cold sore.
SPEAKER_00:So you're going to have to put a warning at the start of this podcast or something. But I'm also very... He was just a
SPEAKER_02:fabulous man.
SPEAKER_00:He was. I'm feeling kind of good now. The McNeil motto is victory or death. I'm not sure who
SPEAKER_02:copied who. It was just... I mean, I know kids don't learn about it now because they're too busy learning about pronouns and whatever else. But it was just such a brilliant, brilliant man. It's just boys' own stuff. And everyone should read that. Geoffrey Bennett Nelson, the commander. And look, he had some foibles, particularly his wife, but he was just... the greatest man. Anyway, I digress. Don't get me started talking about Horatio Nelson. They just don't make them like that anymore.
SPEAKER_00:But back to your, the other, the thousand page book that you were reading. The
SPEAKER_02:other page book, I have to sort of go back and review because I think Rand made some really, really important points that none of us as individuals should be sacrificed to a collectivist or a collective mythology. And I believe her thinking applies very well to our our use of health technology assessment because it reflects the philosophy that she condemned, that disconnect between the reality of that decision-making, the reality that treats us all as subjects to be essentially sacrificed at the altar of a price, a cheapness, a system that values cheapness over human suffering. and preserving life. I think we have to be realistic about that. At its worst, I think our system dares to say to patients that you have to be denied, you have to be sacrificed because of a collective good. And you see this in terms like opportunity cost. Now, the choice that's been made in that opportunity cost, which is what it is, is never described to us. It's just used. We're never presented with any sort of explicit terms. If we invest$500 million in this medicine, it means we can't invest$500 million in this thing. It's going to cost a lot, so we're not going to do it. And it's the opportunity cost. And I don't think we should accept that. There's an ethical illegitimacy in forcing a patient to suffer based on a collective mindset that doesn't exist in practice because I don't live my disease, whatever I have, in the collective. I live it as an individual patient. And I think it's up to us as individuals, not just us as reporters or advocates to argue against it, I think we have to make the case that we should not be sacrificed as these objects pending the government getting a good deal for itself. And that often means the government doesn't get a good deal for itself.
SPEAKER_00:No, because it doesn't get anything at all.
SPEAKER_02:Yeah.
SPEAKER_00:Look, it's an interesting point. I was listening to you and I can remember a time when a minister was quite explicit about the opportunity cost, but it was in the reverse. So it was when pre-Gabalin was listed on the PBS for about$500 million. And I remember then Minister Plibersek getting up at a Medicines Australia conference and pointing out that this$500 million was money she could now not spend on nurses. It was to send a signal. And to me, it was interesting because it says that it was like the money's going to you, pharmaceutical company, as opposed to the service going to the patient. And this is, again, when I talk about there's only two sides. It's a battle. It's an negotiation between a purchaser and a provider without understanding the person in the middle. The conversation should have been, I'm investing this to help X number of thousands of patients who have this debilitating thing. I hope it's going to improve their productivity based on the quality of life and what could happen with this thing. But because of the battle that had been raging, and it's a battle that continues more and more each day, it became about you evil pharmaceutical company, you took money that would have employed an And the reality is we need the nurse and we needed the medicine and the ability to break down that them versus us, you know, evil business versus good, you know, poor struggling government. It really needs to be cracked open to allow people to have a very different conversation. You know, you've got a lot of events that you'll be attending next week in Parliament that are about cancer and about medicines in general and what it all means. And I always sit back and reflect and watch the positioning, watch the articulation of the individual. So, you know, You know, we'll often go to these functions and an individual patient will be given a chance to talk about something. Everyone's, oh, isn't that great? Oh, it's terrible. And then we move forward. We hear that, but how does it change things? Because in the end, the parties all go back to the usual way of operating and continue the conversation because we accept this way we do things is the status quo. So one of the things that really annoys me about our system, one of the things, is medicines is the classic example of where I can not empower and change it for myself. So if I'm worried about needing to have my children in a private hospital or I want to have surgery of some support, I don't have to rely on the public system because I can insure for that moment. And I pay an awful lot of money to insure for something that hopefully never, ever happens. And that's frustrating. But I cannot, as part of that insurance, insure for the medicines that my children and I might actually need. I cannot get it.$50 a month is not something that's going to help with most of the very expensive medications people need today. Even just women who are perimenopausal or menopausal, because most of the medicines on the PBS are all out of stock and you're all having to buy private scripts. You cannot insure. So this is the really annoying part of the system for me, because we make you give up your rights as an individual, which you make me do to subsidise a public acute care system. But the moment I want to do something in primary care, you will not let me look after myself. You not only deny me access, but you then deny me the access to try and get at myself in a semi-affordable way.
SPEAKER_02:But this is a public health ideology.
SPEAKER_00:Yeah.
SPEAKER_02:Which is around equity.
SPEAKER_00:Equity of lack of access.
SPEAKER_02:Yes. Everyone is denied access and the opportunity. Unless we can get it all on an equal basis, everyone is denied. Of course, it doesn't apply across the health system. And because our private contributions to health are growing very quickly, more and more of our healthcare has been transacted outside of these institutional public health frameworks. So the system and consumers, patients, people, the citizenry, are just acting themselves. When I hear you say that a minister said, well, I spent$500 million on medicine, so it meant I couldn't spend$500 million on nurses. Well, which nurses, minister? Because nurses are employed by states, not the Commonwealth. But also, that's the minister saying, I couldn't convince my colleagues to support$500 million for nurses. Because how many ministers go into a budget process, health ministers, and say, will you give me this and it means I can't have that? The budget process doesn't work like that.
SPEAKER_00:But I don't believe she was saying that at all. She was guilting the industry. Yes, she was guilting the industry. She was guilting the industry saying you took money so I've given you money, could you just stop this? Yes,
SPEAKER_02:yes. And there is an element of what have you done for me lately? But the industry is not unique in that. Everyone is like that. And so because the way our health system works is that it's a fight. for funding sometimes people are fighting over the same barrel of money my issue with it is that a lot of the decisions are transacted without regard for patients and I really think we need to say the quiet part out loud which is that patients certainly when it comes to health technology diagnostics included patients suffer because a decision making is cheap and there's really no other way to describe it it is built in It's highly around a framework where the government prioritises a deal for itself as the sole obligation of these advisory committees. And we are all depending on whether or not we are sacrificed or not. And sacrifice is the right word because we are sacrificed at the altar of this quasi-religion called health technology assessment. It comes down to whether the provider can negotiate with the government and its advisory committees a price that they believe represents a good deal. And if that takes three, four or five years, it takes three, four or five years.
SPEAKER_00:That's why I call it the– it's the world's– it's the longest health tenders that we have because the great irony is if we did away with HTA and we had the ARTG and said you're on there and then once you use it, right, well, we're going to put out– we're going to– all this of cancer, we're just putting it all out, you give us it. We would be faster. We would ironically have faster because the company would put in its best and finest offer for what it's going to sell for this many patients. We could cut through all this stuff. The great irony is that this is the most debaucherous tender process that we use through HTA and people don't see it as that. They go, oh no, it's all technical and we don't do tenders in Australia. You're exactly doing it. And what's more, because it's not a fully, I mean, for industry, if the PBS was actually tendered, as in had to follow proper tender rules, you wouldn't get the whole oh, I can't do this, we can't do that, oh, we'll do a little bit of this, oh, we'll redo that, oh, we'll have these new risk shares. You wouldn't have the constant modification. You'd have fixed pricing for five years. You'd have all these different things. You'd have a we're doing this for a 90-day evaluation and then we tender and then we go. I say it and I know in saying it, it will really freak people out, but it's the world's longest health tender. So by the time you've gone through five years, you've basically got no guaranteed approach or option you're being basically salami sliced to try and do something and in the end many don't because they just say well the terms that you're giving us are unacceptable whereas ironically in a tender a government can ask for what it wants and you say this is our best and final offer you actually switch the power base but I know in saying that kind of thing I'm creating a lot of stress for people but I would like them to think about it differently I'd like you to understand that You're going through a tender where the rules of the game are not transparent and where even when you think you've done your best and proper offer, they still keep coming after you, which in like tendering laws, procurement laws, you're not allowed to do.
SPEAKER_02:Well, and at least New Zealand's farm maker is honest about what it does.
SPEAKER_00:Yeah.
SPEAKER_02:We pretend that we actually don't have something that has many of the hallmarks of a tender except the legal framework.
SPEAKER_00:Yes. Except the right to, you know, refuse. And it's one of the things. that, you know, you and I have been rabbiting on about for quite a while. It is unfair and it is epitome of the disenfranchising of the patient that PBAC and MSAC decisions are not allowed to be challenged in the ART or AAT or whatever you want to call it, which particular time. The fact that those parts of the legislation are exempted from an individual patient challenging those decisions is egregious to me. They put that in, they exempted it because they didn't want industry to. But in agreeing to that, you disempowered me as a patient. If I'm a patient who is a participant in the NDIS or I'm a patient who is seeking some sort of subsidy through the social services system, I have a right for a review of my decisions as it relates to me. But government and industry have taken away my right to turn around and challenge the health system in PBIC and MSAC and say, you are going to leave my mum to die. or you are denying my child the medicine they need. And I want this independently reviewed.
SPEAKER_02:I think this is where Rand can be helpful. She argued that we all have an obligation as individuals to challenge institutions that expect us to sacrifice our own interests to a collective mindset.
SPEAKER_00:I think you and I do probably a bit more of that than most.
SPEAKER_02:Well, the theory was objectivism. But I don't understand the legitimacy of any institution that does expect me as a patient to sacrifice my interest to a collective myth. That somehow I benefit as an individual because I miss out on funded access to treatment. Obviously I don't. And I don't think we should patronise patients in that way. I think we need to be honest. And the honest conversation here, the thread that we need to pull out, is that we have a cheap system. It's a really cheap system.
SPEAKER_00:Bargain basement.
SPEAKER_02:It is bargain basement. And it's got worse.
UNKNOWN:Hmm.
SPEAKER_02:Over the past decade, delays have become a much bigger feature of this system. I think it needs to be taken out of the hands of the institution as we know it and looked at from the grassroots up. And from the grassroots perspective, I mean from the patient perspective, why do we expect patients to be sacrificed? And sacrifice is the right word while a price is negotiated through this onerous submission process. We have this HTA review which has ticked over into its third year. It is giving the Minister something to talk about and he's deeply, deeply committed to certainly giving consideration to adopting some of its recommendations. It is just a delay, delay, delay, delay, delay, but ultimately nothing is going to change. I wonder how many of the listeners have actually read this report from front to back, the bit where it says, well, we could pay high prices. We could pay high prices. Because we know that the net benefit that the society, that the community derives from funding these medicines exceeds their cost. But if we pay higher prices, that'll reduce the net benefit to us. So we're not going to do that. We are cheapskates and we're not going to stop being cheapskates because it is all about the net benefit to us. And I think that's a point. And it's said... Well, by the third or fourth submission, the price is 60% to 80% lower. So the system incentivises multiple submissions.
SPEAKER_00:It does. I challenge your listeners to, you know, when you want some fun on the weekend, and then I want you to send it in to us, go through the registration of grants in Australia. Go and read the types of things that we're giving money away for on the quantums of money on a regular basis, on the basis that it feels like it might be a good idea at the time. I really want you to read it. I do quite regularly because you understand the absurdity of, you know, seven or eight million dollars can go immediately to fund a new bike path or seven or eight million dollars to explore another cultural diversity program on top of another diversity program to make sure that they're all working. And I look at the quantum of those dollars and I'm not saying that they're not important things, but look at the time and speed and ease of that and the social benefit it has or the collective benefit it has and then look at the fact that the PBAC rejections from last week and the number of people who for that same amount of money that's going into those grants for social ideas or particular pieces of infrastructure got through in a heartbeat and people are dying waiting for a medicine. You need to understand, you need to find a few quirks because we're need to point them out more to government saying, seriously, we're waiting five years for this, but this could happen in like 30 minutes. Where is this? Let's challenge governments to challenge their HTA bodies to say, can we just reframe what it is that we're trying to do here in Australia?
SPEAKER_02:Yeah, we need to get to the bottom of some of those outcomes from last week. One was Lily's Alzheimer's drug, where they cherry-picked the data, disgustingly, and said, actually, don't come back. This is not appropriate for the PBS. They said it only provides a six-week benefit, which is a cherry-picking of the data because I went and had a look. Okay, so what would be long enough? 12 weeks? 18 weeks? 24 weeks? That is an ideological outcome. I think it's appalling. And what makes it particularly appalling is that they conceal their ideology, these claim statements of evidentiary fact, and then we don't get to know, well, who is a discussant? What did they present? What did they say?
SPEAKER_00:What were the conflicts of interest disclosed?
SPEAKER_02:Yeah, yeah. The fact that we don't know the opinions that these people bring, and we're not entitled to know the opinions that these people bring to that committee and how they're articulated in that room, I think it's an absolute disgrace. They are serving a public health interest. They are serving us, not the other way around. And when they say to a company... And to a group of patients, there's no spot for this medicine on the PBS.
SPEAKER_00:Since when? Since
SPEAKER_02:when? What are you talking about? Yeah. What are you talking about? That to me was an incredibly unethical thing to do.
SPEAKER_00:But look, hey, but this is the thing. The government, the industry, no one holds up. So it's the fact that you and I will talk about it all the time. I have a completely failed newborn blood spot screening program that's now over$107 million invested with not one new disease listed because it's going through a committee that regularly has on the public record said it's cheaper for children to not be born than to actually risk actually having to treat
SPEAKER_02:them. It's cost effective to prevent the birth.
SPEAKER_00:Yes. And like I said, that's a family choice. But to actually put that on the public record and go, this is one of the reasons we don't want to screen, the fact that I've got regularly the commitment to supposedly look at these things, it's all hidden. Oh, we went to something and we didn't do it. We don't know where it's at. Oh no. Another group of officials said, we're not even going to progress that. We don't want this. So if you look at the attitude, um, We, we have a cycle through in those committees of people who've just been in there too long and the group think, and they are really good individuals who also do some great work expect in the community and then their own areas of their profession. But the group think on how we run the system and the fact that it's, you can hear it creaking, like you can hear the system creaking at the moment. You can see the number of rejections. You can see the number of recommendations not being progressed. You can hear the talk in the street. I appreciate that government is used to the industry saying the sky is falling and it never falls. And there is a lot of scepticism. I know there's things that you're going to want to talk about, like with MFN, et cetera. But as a patient representative and someone who talks more broadly, you can hear the creaking. You can read the creaking. And I'm terrified that that HTA implementation group is going to come up with what you and I have already said. We'll give you a really small first in class to show we did a pilot and it worked really well. We'll fix the LSD pay program because we've been doing it, you know, ultra virus and working around it for years so we'll just get rid of that first bit and we can fix vaccines and make them faster by doing something else as well. We can do all that and then tick, we've done this, by the way, you're going to pay more for cost recovery and you're going to pay more for these other things. Government will get what it wants and not one person with a chronic disease is going to have a better outcome and not one person who's the second third or fourth indication in line and again ask anybody in rare cancers what that's like waiting for we're going to be given something that is seen as a solution and if people don't say actually it's not just that the ship's breaking it's it's actually sinking
SPEAKER_02:yes it's it's well the hta review you and i have always made the case or argued that why are you excited about this it's a trap
SPEAKER_01:oh
SPEAKER_00:yeah
SPEAKER_02:I think many people in the industry understand that, and the fact that ministers... Going forward, we'll point to this review for the next 10 to 15 years as a reason not to actually do anything else.
SPEAKER_01:Yeah.
SPEAKER_02:So anyway, let's move on. Yeah, I just want to talk briefly about MFN. I don't want to talk too much about it. I do know that-
SPEAKER_00:Yeah, you should define that. Some people might not know. Pretend you're at the
SPEAKER_02:Senate. Okay, so the Trump administration's most favoured nation pharmaceutical pricing policy, which is yet to sort of take any form- other than a process of engaging companies directly. And there's some reviews. I think what Lilly is doing in the UK with their Wunjara is really interesting, where they've doubled the price in the private market. In the private market, yeah. Which seems to me to be a bit of a concession to MFN, because the weight loss struggles were one that President Trump identified. My view... I think this is a great generational opportunity for the industry to get the discussion on price and the impact on price.
SPEAKER_00:100%.
SPEAKER_02:And– It gives you so much leverage. So the government has to legislate new PBS pricing framework by mid-2027. Otherwise, prices effectively go up. Yes. Effectively. So I wouldn't be rushing to renegotiate that. I mean, they rushed to renegotiate it four or five years ago, which was a mistake. Yeah. But I think MFN gives you a great opportunity, and it's not just about higher prices. It goes to my piece this morning. We can avoid any discussion about the reality of that, but you can't evade the consequence. And the consequence is patient suffering and death in some cases because we're cheapskates. So I think it's a great opportunity. I know some companies are thinking about it and talking about it. I know Mark Butler is concerned because he did have a recent meeting with some managing directors and it was a source of significant discussion I think he's curious I mean obviously he's hearing things not just from companies I suspect DFAT are saying this is pretty serious and he doesn't want Australia to miss out and Australia being a market which combined with New Zealand is about the size of Florida in terms of population Obviously, American companies are not going to do anything or global companies are not going to do anything to potentially put that at risk. By the way, did you see what Brian McNamee, the chair of CSL, said about their R&D productivity in Australia?
SPEAKER_01:No.
SPEAKER_02:He was talking this week. A lot of business leaders in Victoria are saying this work from home thing has got a bit out of hand. And Brian McNamee was talking about that and more broadly the lack of productivity at its Australian R&D centers. And a lot of business leaders Along with a couple of other things that company has said recently, that's piqued my interest about a long-term plan that company has. I
SPEAKER_00:was going to say, yeah, you've been writing a lot about CSL. So what's it doing? Well, it's got that
SPEAKER_02:amazing– have you seen the building that they put up in Melbourne, in Parkville, I think? But if the chair of that company, one of Australia's greatest business leaders– who sort of led that company from the time of its privatisation until a few years ago really, built it into what it is, a global blood products behemoth. If he's saying that our performance and R&D productivity in Australia is poor, that to me is a red flag. That to me is a red flag about where its future lies.
SPEAKER_00:CSL or Australia's or both?
SPEAKER_02:CSL, yeah. I can't blame it. If you're investing in all this R&D in Australia, it's not delivering anything. Well, any business, well, shareholders are going to ask, but I thought that was interesting.
SPEAKER_00:It is an interesting point in, you know, you and I have talked in the past about the MRFF and what is actually genuine opportunities for research that leads to outcomes versus just a pseudo way to keep universities with a secondary level of funding outside of students so it's curious I'll have to go and read that because I think how and what we choose to invest in and that's again another one of those problems where things like MRFF and NHMRC where it's everybody who knows everybody talking and peer reviewing all their own stuff and recommending each other and that's part of the challenges in a small country but yeah look your MFN stuff I think it's interesting in respect of I think about it in two different ways. One is what might be coming in the future pipeline and second of all what's already there because it's if pricing here of what we already have has to change then how does that impact on the effects and the delistings and the game playing that
SPEAKER_02:goes on? If the pricing has to change, change the pricing. I don't know what the issue is. People are really weird about pricing. No minister wants to be seen to be caving into big pharma. But the idea that they can go into a discussion, if the Prime Minister finally gets that meeting with President Trump and he's sitting across the table from the President, the Vice President, the USTR, Jameson Greer and Howard Lutnick, the Commerce Secretary, and they say, we need to talk about pharmaceutical pricing. The idea that our Prime Minister can just go, no, we're not going to talk about that. Well, you can have 25% tariff then. It's a trade negotiation and you've got to give to get.
SPEAKER_00:Yeah, and look, I think there's a lot going on and I think it depends, you know, having, you have to see the different parties, the different way Canberra acts versus, and by Canberra I mean bureaucratic officials versus ministerial versus, it is one big bucket and this health is but one thing that is going on and I think that's the issue of understanding where we actually sit and how much of one thing is a priority over another, both for the US administration versus also the Australian administration and that will evolve I don't think it's as simple as I don't think someone's going to walk into a thing and say we're not talking about it I think it's the deals that could be done or should be done and the short term versus the long term I mean you and I always talk about the pendulum things go one way things go back the other so being smart about it and seeing where it falls out
SPEAKER_02:yes something else wanted to talk about was West Farmers Health which is Priceline Pharmacy and the Sigma, which is basically Chemist Warehouse now, did their results this week. Both of them were very bullish about the consumer health segment. I mean, Chemist Warehouse is now doing over$10 billion in retail. So they're doing around 15% of– their revenue is around 15% of that of Woolworths. I mean, it's a staggering number. And it grew by 14% and they're expecting double-digit growth again this financial year. Stunning. Priceline, West Farmers Health, was quite similar. They really lauded the performance of their consumer health segment. Priceline has actually got a big retail footprint. They've got that massive, what's it called, the Sisters Club or something? They've got over 9 million people in that loyalty program. Amazing. And it just struck me that, you know, I think everyone always speculated that the consumer health segment would go to supermarkets before pharmacy went to supermarkets, but it's actually gone the other way. That the consumer health segment is in pharmacy big time. And I don't know what that means, but it's obviously a trend. Maybe it's the deals they can get, but their product range is amazing. If you go into a price line, it's extraordinary what they sell. And same with Chemist Warehouse. I don't particularly enjoy the Chemist Warehouse experience, but I enjoy the Chemist Warehouse pricing. Yeah. And I think it points to there's a shift underway. I think that creates some challenges for community pharmacy. I think the government might go,
SPEAKER_01:hmm,
SPEAKER_02:we're paying you a million dollars for your dispensary and you're selling$3 million worth of retail. Don't know about that, but that's a longer-term issue. But consumers, they're really invested in pharmacy as a consumer Thank you. Yeah,
SPEAKER_00:and I think Chemist Warehouse, they were very effective even when I used to be running the system. But I think COVID did a lot for the strength of brand of pharmacy because when your GP wouldn't let you anywhere near them, your pharmacist was always there. The fact that they were the ones that got the vaccines out when everyone else couldn't work out how to put it into a paper bag and deliver it. So I think it really transformed it. I think finally that also encouraged the uptake of e-scripts and online ordering in respect of what script you need to be able to do that, which was something that the industry in pharmacy had kind of been a little bit against. But COVID, it made sense for them to flip and instead of being frightened of it, they really embraced it and have run with it. It's allowed them to control. It's allowed them to bring the loyalty. You watch the consumerism there. They're taking some things from obviously, you know, like the Coles and Woolies but they're also going into the likes of the specialists, like the DJs and the Meyers. They're taking that area where people used to normally go for the beauty segment, the lifestyle segment in Australia, like globally is out of control. Well,
SPEAKER_02:that's the price line in that. They've actually opened beauty stores. Have you seen that? They've launched a new brand.
SPEAKER_00:And so you look at that and it's smart. And I think that's why a lot of people keep forgetting that in 2027, 2028, we have a$10 million review of wholesale sailing remuneration Australia.$10 million is a lot of money to spend just reviewing something. We've seen from
SPEAKER_02:the review of the prosthesis list that now the prescribed list is the big winner was one consulting group.
SPEAKER_00:Yes.
SPEAKER_02:Who did all the, shall remain untamed, but they did all the reports.
SPEAKER_00:But you can see that that timing is, you know, strategic because we'll have seen the embodiment of the Sigma model with Chemist Warehouse now and we'll have the Priceline, the Wesfarmers work and being able to a challenge who's responsible for paying for the movement of these goods really what else is going on I think it's this short term versus long term you know there's a lot of money that gets put into their community service obligation to make sure medicines wherever they should be you know within 24 hours you know the question is as we've been saying for 15 years do you need that to make sure that a box gets to George Street or is it really just about the fact that it's the individual rural remote pharmacy who should be empowered with that money to make sure that they keep enough, have access to certain medicines in areas that might not always be able to get them because the daily delivery is different.
SPEAKER_02:I haven't read the new CSO contracts, which is not a great reflection on me because they are pretty good documents. They're interesting documents.
SPEAKER_00:They are.
SPEAKER_02:But the last one didn't obligate them to deliver every 24 hours. There was a list of products.
SPEAKER_00:List of exemptions, yeah.
SPEAKER_02:But that's the industry standard. And so they all commit to it. And look, if I'm government, I'm going to be very cautious about messing around in that system too much because it's the one part of the system that people don't really complain about. As you say, you can walk into your pharmacy and you get to speak to a pharmacist and you get their advice. And now that they've become a health destination, I go to my pharmacy all the time and ask them for health advice. I go to my pharmacy to get my vaccinations. I go to my pharmacy to get my medicines and my OTC and everything and because it's a he in this case he's always there and he's always ready to talk to you and if he can't help you so I can get it the next day and I don't have to wait a week for an appointment.
SPEAKER_00:No, and like you said, when they don't have the medicine, they will try and find someone else to do it as opposed to when you ring your doctor and you can't get an appointment and they're, oh, well, you could try someone else.
SPEAKER_02:Well, you saw the Guild did that women's health thing up at Parliament House. Yes. Not sure about the sign, Trent, but anyway, it wasn't really a sign. Come
SPEAKER_01:on, you'd explain it to your
SPEAKER_02:listeners. No, you can go to the website and see the photo. Maybe I'm just a bit squeamish, but it's– They're just riding the wave. And you think back two years ago when there were 4,000 pharmacists and pharmacy assistants at Parliament House demonstrating against 60 days, failed policy by the way, and the bitterness between the government and the pharmacy guild and pharmacy in general. And literally it's an example of being able to put the toothpaste back in the tube. It's absolutely unbelievable. They're just riding that wave. wave around scope of practice and Yeah, it's going to be very interesting to see how the government responds to that because they've got to respond to the Cormac review on scope of practice and do that soon. So it's just interesting that pharmacy, the performance of pharmacy in that consumer health segment is just skyrocketing. And I think that's something we should all take note of.
SPEAKER_00:And, yeah, look, they're allowed to run as a business. And it's like whereas as you've talked about with the AMA and RACGB and you're in these urgent care clinics and things where we're disempowering these really highly educated, incredibly helpful GPs who run their own businesses or run as part of something else and we're trying to make it bargain basement dollars whereas the guild and pharmacists have always known their worth and yet can be patient centric and understand that they need to run a business but we sometimes capture doctors and nurses in this artificial construct that you're part of some, you know, more deified, noble cause and so therefore you should be, you know, self-flagellating a bit. You know, you should, it's okay that you're not being paid that much or you've got all these overheads and complexities. It's, you know, you're a really amazing person. You studied for all those years to earn less than the checkout ticket woolies. So I do think it's an interesting time of, and I do worry a little bit for the primary care sector because they're going They're so getting caught up in this urgent care clinic discussion that the broader world is moving on and yet seeing your GP should be your healthcare coordinator between allied health and specialist health. But, you know, we'll see.
SPEAKER_02:Hey, PBS co-paid legislation. Second reading debate this week. Coalition sort of focused on HTR reform. It's interesting. But you've been... out there strongly talking about the lack of adjustment to the safety net I noticed that the parliamentary library issued their brief on the bill saying that oh it's going to be harder to reach the safety net now they acknowledge that and in fairness the Exmo acknowledge that as well but you're maintaining your push that they need to adjust the safety net threshold
SPEAKER_00:yeah look we're trying but with everything else that's going on and we don't have the guild support on that one so that's It's a tough stance for us. But yeah, I do. I genuinely believe that Scott Morrison and Greg Hunt, the greatest impact they had on affordability of medicines was when they reduced the safety net thresholds for concessional patients from 60 down to the 42 and then the 36. It made affordability real. And like I said, for people who only use a half a dozen meds, great. It's an immediate weekly cost of living adjustment. But if you have chronic disease in your family and you own over$65,000 you're still going to be paying$1,700 out of pocket before you get medicine relief. And New Zealand does it better. UK does it better.
SPEAKER_02:Yeah, their
SPEAKER_00:safety net's much lower. Scotland does it better. Pretty much everyone does it better. Even in the US, I probably have a better chance of having better coverage. Yes, they
SPEAKER_02:have out-of-pocket caps for their Medicare programs and in their private health. It's interesting, isn't it? Because even the Exmo said, well, hardly anyone reaches the safety net, general safety net anyway. Isn't that the point?
SPEAKER_00:Yeah, so then it obviously would cost more. cost you that much to do anything with it. But equally, every time we write and, you know, well done Minister Butler, he always writes back, both when we say thank you and when we say we don't like something and I really respect him for that. But they wrote back to us and said, no, it would cost too much. I'm like, but you hang on, your ex-wife says it doesn't.
SPEAKER_02:Yes. 68 scripts is a lot because it indicates a lot of interactions with the health system. It means you're going to a lot of doctors. You might have a family. So If you're not hitting this, if you're not hitting 68 scripts, how many scripts have you been written and not filling? I think that's a question we've got to ask.
SPEAKER_00:It is. And one of the things that I was talking to a couple of MPs about, and I raised that perimenopause-menopause problem, which is the continuing shortage of supply for women who are in their 40s and 50s to the medicine that's on the PBS. They're now buying it all out of pocket, non-PBS subsidised. They're having to actually get products that don't even have a substitute So not only are they trying to cover that cost, they're covering that cost that doesn't count to their safety net, as well as the additional cost of everything else they've got, if it's the diabetes, the CVD, all the other things, what their husbands or partners might be needing, what their children might be needing. So I just look at this stuff and go, so many things are now out of pocket for families, particularly with relation to common chronic disease treatment. that aren't being appropriately funded. It's ridiculous. I see it in Prednisone all the time. You know, oh, we've got this obsession with we'll only give you five tablets because, you know, for an allergic reaction and I saw the Allergy Foundation's had their thing this week. Well, if you've got an ongoing issue with allergy and you're regularly taking things and EpiPens, you're charging someone the same price basically for five tablets as opposed to the box of 25 tablets that they could actually use for three or four months. So this whole obsession with, oh, we don't want you to be taking too many. I think you've got lifelong chronic disease of an allergy. You should be allowed to do that. But again, I look at that and go, more money for these people, more and more money. So it doesn't take a lot. All right.
SPEAKER_02:That was a long one today. Let's talk about
SPEAKER_01:it. Well, Horatio Nelson.
SPEAKER_02:What a man he was. I mean, people are trying to rewrite history as they always do, you know, imperialism and all that. He predated imperialism. The Napoleonic Wars were the start of that period, but what a man he was.
SPEAKER_00:And speaking of- Anyone
SPEAKER_02:should read the book. It's Geoffrey Bennett, Nelson the Commander.
SPEAKER_00:But speaking of wonderful men, I mean, Perez and Bottas got announced for Cadillac.
SPEAKER_02:You can't compare them to Lord Horatio Nelson.
SPEAKER_00:Oh, come on. I knew I'd rile you up. are
SPEAKER_02:what a man it's just a real boys own thing I'm sure teenage boys probably don't get to learn about those things these days which I think is really unfortunate because he was an amazing amazing human being and as Patrick O'Brien said he was just like you couldn't even write about it it was just what he did I mean it's just absolutely crazy anyway thank you everyone keep the feedback coming really liking the numbers like the podcast Give us a good review or a bad one, whichever you prefer. And find
SPEAKER_00:me some weird grants.
SPEAKER_02:And farewell to the Iranian ambassador, of course.
SPEAKER_00:See you. Don't
SPEAKER_02:let the door hit you. Thanks, Felicity. Thanks, Paul.