The 'Dispatched' Podcast - Series 5, Ep.25

Misleading claims about patient groups and the industry, combined with an irrational hyperventilation about a rational response to new global realities, have made for an interesting week. The price reduction mantra and whether it can be moderated?

Transcript

Paul 0:08

Hello and welcome to the Dispatched Podcast. My name's Paul Cross, joined by Felicity McNeil, PSM, Chair of Better Access Australia. Hi Felicity.

SPEAKER_00 0:18

Hi, how you doing? I'm yeah, I'm well. I'm well.

Paul 0:22

I'm well. It's uh I'd say Adelaide's an interesting place at the moment.

SPEAKER_00 0:28

I have to disclose that I have family in Adelaide.

Paul 0:34

Well, you had a bunch of Collingwood fans and the Labour Party conference coincide.

SPEAKER_00 0:42

Triple threat.

Paul 0:42

The crime rate has to have gone up.

Felicity 0:45

Yes.

Paul 0:47

Well the CFMEU would be there.

Felicity 0:49

Ah, well, yes. Um well you've after they got a um ACT minister on the chopping block, yeah.

Paul 0:59

I was reading about that. That's so bad.

Felicity 1:02

Yeah, it's it's it's a uh it's a huge issue here. But uh look, you know, full disclosure, we often talk football, which I know to some of your listeners makes them reach for chocolate biscuits to um take away the pain. But uh yes, I I my in-laws are all crow supporters, so uh my daughter was on the family text last night sticking it to them, which is funny for a Melbourne supporter to actually go, Yay, Collingwood on.

Paul 1:28

It's cool to win. Uh okay. A lot to talk about. Uh let's start with a little article that appeared in a conversation. This week.

Felicity 1:43

Oh, you wanted to talk out about made up shit.

Paul 1:46

Made up shit.

SPEAKER_00 1:48

Well sorry, sweat.

Paul 1:50

I I did say to someone this week, I uh look, 1995 call and asked for its issues back. Because it this is just the same article, a new version of the same article that's written been written for 30 years, just a screed. It it accused MS companies of bullying. I think the bullying was the other way around. That's what I wrote anyway. I just think if that's bullying, the bullying is by the payer.

Felicity 2:15

Yeah, and and heaven forbid uh the patients have agency and actually say what they think. But uh look, as someone who was, what are they, selectively quoted. Um and yeah, look, the thing that gets me about it all is everybody in the system knows that the system isn't perfect. All of us have made a contribution to some of its great achievements and the impasse that we've kind of hit now. We've all been either active participants or watched it happen and both sides, and in the end, we as patients are truly an afterthought because this is a fight between the provider and the purchasers, and the purchaser has gone a little bit too far. What really peeves me about all this um hand-wringing and accusations is an academic who is funded predominantly by the Australian government and state governments, who when actually asked us for information to disclose what better you know what money better access takes from drug companies, and for the four millionth time, nothing, was on a taxpayer-funded trip overseas. The lack of transparency and the I take government money so I'm good, and anybody else who takes money is bad, and the disenfranchising and the attempts to try and make consumer groups, patient groups who do most of their work voluntarily, which something in a university might not understand, and has to find the money to fund things. So to first of all get on your high heels and talk about the manipulation and the the various tropes. But the one that really got me was of so much of it is the misrepresentation. And I know it was to try and argue against me saying that in many instances global farmers basically treat Australia like a charity, which is, well, that's just the price we're going to have to put up with. But just want to cite that twelve hundred and fifty dollars a year is what we are paying for medicines to take capital, yeah. Pay capital to take the OECD stuff, which my favorite thing, and as you know, I'm I'm on the public record and got uh half a dozen bottles of champagne by getting senators to say the word condom over and over again to admit that when we measure medicines access and what is funded, we're talking about vitamins and we're talking about band-aids, and we are talking about condoms and we're talking about over-the-counter medications. She deliberately used that $1,250 number to make it sound like the PPS and the argument that we're having right now is an area of wealth and overspending. And, you know, we've written back to the conversation and said, if you know, if you want to mount an argument, again, the conversation funded by government and universities, can we be honest here? And so we wanted to really put on the record that if you wanted to talk about the PBS, which is what this MS issue is about, which is what the medicines access is about right now, the actual figure for how much the PBS spends per capita on each individual in Australia is $361.82. Not $1,250, $361.82.

Paul 5:35

Yeah.

Felicity 5:36

71% lower than what she quoted.

Paul 5:37

Yeah, so she was essentially, she cited the OECD, but they use the Australian Institute of Health and Welfare data. And they have prescription and non-prescription medicines as two separate categories, and they combined in that in that number. The non-prescription medicine category is actually much larger than the prescription medicine category. This was an issue that was discussed ten years ago. And when you go and have a look at what's included in the non-prescription medicines category, it's vitamins, band-aids, condoms, all sorts of stuff, anything for virtually anything that you can buy in a pharmacy or anything that would be considered a medicine in a supermarket or even a petrol station.

SPEAKER_00 6:17

Yeah.

Paul 6:17

So it is profoundly misleading.

SPEAKER_00 6:20

Yes.

Paul 6:20

If if we were actually spending that amount, we're up near the US.

Felicity 6:24

Yeah. And um and Donald Trump would like a bit more. So yeah, it but it goes to the disingenuous nature of all sides of the argument at the moment at times, because it's deliberately trying to paint a false premise. It's the same accusations that the devotees of, I'm not going to use that three-letter acronym, of people who like the way we currently evaluate medicines in this healthcare system of ours. I'm not saying it.

Paul 6:52

The catechism of HTO.

Felicity 6:56

But if you think about it, the same accusations that uh these academics make about, you know, is the data reliable? Is this really neat? Isn't the treat algorithm? Where's the Kaplan Meyer curve? And the accusations they make about misrepresentation of information and data, this was a deliberate attempt to misrepresent to the broader community what's going on in the system. And that's why we've got to the point that we've got to right now. As someone who did use to run the system, not theorize about it, I know when it does a really good job and I know when it's actually breaking, and it's breaking. And we are not helped by um these accusations against patient groups or this misrepresentation of what's really going on in the system, just because that's what your latest research project funded by the MRFF allows you to discuss.

Paul 7:51

Yeah, so it is a government-funded publication run by government-funded organizations, uh, dominated by government-funded people, uh, and at its worst, has the collaboration of government-funded consumer organizations because they're not patient representative groups, they describe themselves as consumer organizations. And they are now the people, at least one of the authors of that study, with government-funded consumer organizations, are doing a government-funded study on patient group funding focused on pharmaceutical companies. They have approached patient groups who should tell them to go away very quickly. You're under no obligation to answer this information. Or, in fact, why don't you go back to them and ask for protocols and all sorts of information that they should be supplying? It's a complete outrage to me. And and patient groups need to just say no, we're not we're not collaborating on this.

Felicity 8:49

Absolutely. And and to go, you know, here is our experience of it. So we got an uh a press uh a request from this professor uh through our contact form on our website asking us to explain. She couldn't find where our funding came from. And could I send her the last five years worth of you know proof of what we do? Now we're fine. I actually reached out to the former chair of the PBSC to check that this person was valid and appropriate and was given their bona fide days. And so because we are working in this space, and I have nothing to hide, like I said, we are fully self-funded. I am a volunteer, my board members are volunteers, we pay our researchers and we pay the minimum wage, so we wish we could afford more. Uh, and everything I do is is self-funded by myself in that area. So just for that on the record, and that's for the last five years. We sent that through immediately, but we sent it through saying here, this is what it is, and this is why you can't find it on our website at the moment. And look, we're really interested to understand what you're working on. Uh could we be of any assistance? And uh look forward to hearing from you. So we didn't hear anything. I got the out of office from overseas, and then I got a thanks here information. What really gets me about that is that as a researcher, as someone who um is out there trying to tell patient groups how they should, you know, not take money and you know be transparent and all this kind of stuff, that individual did not disclose that this was for the purposes of writing an article to validate whether she would actually attack me, obviously, for saying positive things about the pharmaceutical sector. Never got back to me, never explained why. And, you know, in hindsight, I think as Ivanou said, like, why the heck did you even bother telling her? And I said, Well, for me it was fine because I also knew that there were various media things coming up and I'd had a few questions after speaking to Natasha Robinson about issues. But it never occurred to me that someone would be so duplicitous and so lacking in integrity. And so, you know, we've written to the conversation to ask to have the article withdrawn, and we're lodging a formal complaint with the university about the lack of ethics, standards, and transparency of someone who is manipulating the system for their own funding outcomes. Cannot be trusted.

Paul 11:19

Uh interventions via social media, I describe the article as just dumb. Because it is actually just dumb. Where where is one of the great ideas is well, nowhere in that article do they actually say we have to think about the patients. Because basically it is so dogmatic, it is so riven with ideology, but they don't care about patients. No, no, they have no no regard for patients. All they care about is this, you know, the Valhalla that is HTA and pricing. That's all they that's all they care about. And so at no point did they say, well, did that did they consider the alternative? Is that well, maybe we do need to respond. No, no, no. The the big solution was to government officials engage in global piracy and go around and parallel parallel import. And I and I and I I just one, and as I said, there's not enough court time in Australia uh to be able to accommodate the court cases.

SPEAKER_00 12:15

I know. So what is silly years later?

Paul 12:18

But it is so utterly stupid. There's no there is no other no other word for it. Because what it what it doesn't was it that what it doesn't contemplate is well, so you're gonna muck up the supply chain of another country. How are you gonna procure it? Who's gonna do the procuring? Who's gonna take the legal liability of getting these products into Australia? What is the IP status? Well, that would be for the federal court to determine, but also, okay, why is the product available in another country that you want to take it from and not available in Australia? Maybe it's more expensive in the other country, it's just idiocy. And as I I wrote this week, no one cared when we put up spent billions of dollars in recent years, understandably in many cases, I think, putting up the the price of generic medicines. No one cares about that, no one comments about that. No one's like, well, okay, you know it's just when it involves new medicines, uh, and there's all the tropes around the industry and patient groups. It's just kind of ridiculous to me. It's just and only the conversation would be stupid enough. You know, there's the all-world line, you know, only intellectuals are stupid enough to believe some ideas. No, no actual normal person would be such a fool. But it was just it was just this screed that was almost like a response to the stuff that Natasha and Penny had been doing at The Australian and how that's been really effective, and the fact that the minister had to relent, which was entirely legitimate, uh, has happened before, and on MS medicines, I mean he relented on the pricing of MS medicines. And I don't think I I I don't see any controversy in it.

Felicity 14:05

No, and it's it's the selective nature of it. Again, we always just you know government good, anything that's private is bad. Uh we don't argue about the fact that doctors need to be paid more or that nurses need to be paid better, or um, you know, various services need to be better provided. But the the obsession with the ideologies and the the disenfranchising of patients, my experience of it is that it is government that ostracises and those who are in the academic sector who are very clear. And I should say that's not the research. I'm not talking about the medical sector. I want to be very clear in the university sector. I'm talking about those who theorize as opposed to those that do. So, you know, the public health researchers who are actually working on, you know, genomic therapies or, you know, immunodeficiency and how we, you know, treat it and different options, etc. I'm I'm not having a go at those people. And I I do apologize if it's come across that way. But it's the theorizers who, you know, to behaviorally about how you think I am as a patient manipulated. And we need these debates to a point, but it's got to this area where it's just become the then versus us purchaser provider, government versus private sector, and we don't do it in any other part of the system. And now that patients are trying to take our agency and turn around and say, I am sick to death of the way you treat us, it's why at Better Access, we've been, you know, wanting some fairly radical reforms to the law. Because without it, you just keep talking about a process and you never talk about the patient.

Paul 15:48

Yeah, if you if you come in, and I I've written about this today is this sort of the the apocalyptic view, and we saw it when the UK did virtually nothing, right? They increased the quality, the quality adjusted life year, which you and I both know that is just one lever they'll pull. They'll just pull another lever to get it down. But the UK government, Labour government, not exactly business friendly, has acknowledged the need that they they probably need to pay more. They have a large pharmaceutical industry to protect. I mean, they don't want GSK and AstraZeneca, who've probably both got one foot out of the UK already, getting the other foot and putting it in the US. So they're they're they're cautious and they're concerned. But the hyperventilation in response to it and the sort of the zombie apocalypse view that the world's going to come to an end, and the the presentation of any change in response to global realities, which is exactly what we're dealing with, just like we did on generics five years ago, is is presented in these moral terms. People will die. Some moron actually said on LinkedIn that people will die as a result of that UK DC resist. What mental process did you go through to make that conclusion to actually type it and then to hit post? And someone else, well known to the Australian system, described it as a criminal waste. I think funding on their research is probably the greater criminal waste. But but it's just to me, it's it's almost comedic, and you have to we know why they do it. They do it to try and present these issues in moral terms and shut down debate. That's that's the intent. Part of me suspects they actually do believe it, but that's because it's an ideology, it's a political ideology. And if you drew a Venn diagram with a range of issues, you could pick what the issues would be where these people would be at the center. But you've got to I I think mockery, you've got to take it head on, absolutely, like you did this week.

Felicity 17:52

It wasn't the week to pick a fight with me. I'm just saying.

Paul 17:54

No, no, but I think my mockery is also this is just let's just hull, it's just comedic. And say, well, we're going to basically parallel import all these medicines. What was the discussion that led that to being the conclusion?

Felicity 18:10

Well, as someone who's uh attended during my time as an official global shortages on medicines in in Canada, and Australia didn't have too bad a run back then, showing my age. But one of the things that used to be raised a lot by those in the the EU and Europe more generally was the issue of parallel imports, which was one country basically coming in and outbidding another country to get access uh and stealing their pipeline of medicine. So uh, you know, a poorer country would you know have negotiated a lower price, uh fairly so, and then another country come in and literally buy their stock uh right before it got to the patients. So we do need to understand that, and I always find it amusing as to how would a a researcher at a university feel if we just stole their IP?

Paul 19:03

Yeah, well well, that's what you know, what's good for the goose, as they say.

Felicity 19:07

Well, perhaps hand it all over, like you know, but I I I do find it fast school. But I I am I am weary of the intellectual debate, and I know we're we're gonna talk about you know where the negotiations are starting to go, but everyone goes back to their usual corners. The the biggest fear I have in the the great work that Natasha and Penny have done, uh the ABC is now doing, I mean, you've been doing for us for years, is we've finally got an awareness and how quickly that dies because I why was MS so successful? A it was a step too far, so you know, when there's overreach, it's very easy to start to fight back, and it's easy to make it cogent arguments because of something was done that was so stupid, and then it affects a large number in the community. What our challenge is going forward is how quickly everybody gets bored and moves on. And when you're in patient groups, and I I always think of um Raymond and Maddie at the Australian Pompeii Association, these are people who have been fighting for access to a medicine for 17 years and for newborn screening for the same amount of time, and they still have to keep going. And that's not something that most of this sector is experienced and has the strength of energy to keep that fight going, and that's what we're going to need for the next 12 months to two years because the moment the moment you stop talking about it, the system, government moves on to something else.

Paul 20:40

Yeah. Yeah. Uh I mean Yeah, we don't really have an intellectual discussion, do we? What we have is technical discussions and process discussions. And that's that's the great vulnerability and the advocacy failure over an extended period of time. And we've all and I wrote this week, we've all collectively made a complete hash of it, and I've been part of that. Uh and certainly those who've argued for change over an extended period of time, because we've never engaged in it intellectually from the national interest perspective. Like, what are we trying to do here? Because that's that's the conversation that that needs to take place, and we need to admit our fault. What worries me about these negotiations the the agreement negotiations, and they've already fallen into NDA discussions, i.e., I don't think the NDAs have been signed, but the deeds have been proposed. I I think the industry's gotta ask itself, has this ever worked for us? I think it's hard to argue that it has. It depends what you classify as winning and losing, I suppose. Is an agreement so important? Important to us, or our agreement so important to us that we're going to compromise our principles here. Enter in India's, which are completely unnecessary until decisions are made because these are not budget and confidence conversations, these are just ideas exchange. It doesn't become budget and confidence until there's actually a new policy proposal, I would say until it actually is. So there's actually no justification beyond a control mechanism, and there's a lot of reptilian instinctive response in how government approach these things. But I do believe there needs to be a really serious conversation about what is our duty to the national interest? I think it would be hard to argue that conversations. How many examples you would you like of a discussion covered by an NDA ending badly? And in this system, when it ends badly, it's generally meant for the patients.

unknown 23:00

Yeah.

Paul 23:01

2023, the catch-up reduction has been a complete catastrophe. Let's not let's not pretend. It's shelled out the industry, hundreds of job losses. And these aren't job losses of general managers and commercial leaders, they're job losses of junior to mid-level people who do the legwork on supporting medicines access in Australia. It's the loss of strategic capability for this for this country. How many medicines in this country make it onto the PBS because of legacy company presence? So Company X has always had a presence in Australia and it's just easier to maintain it. That is in decline. And that strategic loss of capability is reflected in a November PBAC agenda, which is a massive shoulder shrug, as far as I can tell. The most interesting thing is the Amgen submission on a broad uh access, broadening of significant, well, it reads like a significant broadening of uh access for uh biosimilar beating night, which to me is only five years overdue.

Felicity 24:04

But it's we thanked them. But good on them, yeah.

Paul 24:07

Really, really good good on them for doing that. But it's that's the conversation we haven't had. And I go back to Andrew Wilson's speech at I can't remember when it was, it would have been in like 2015, 2016, when people were talking about HTA and reforming HDA, he was saying we need to hit the high-level principles right. So they cooked up that ridiculous NMP review, which was a complete rigged process from the start. But he's he remains correct today, is that we haven't got the we haven't had the national interest conversation. So if it devolves into this zombie apocalypse conversation where people are saying it's the end of the world if the government actually gets a bit realistic about global realities. And I think there's a real duty for the industry, and I know you've said no into the room and locking the door behind you, not only is it never worked for you, it's never worked for us.

Felicity 25:03

No.

Paul 25:04

So why is it gonna work this time?

Felicity 25:07

It it's kind of funny. So what does the innovative sector and even the generic sector fear most of all on the PDS? Tendering.

SPEAKER_03 25:16

Yeah.

Felicity 25:16

They uh they're all terrified of tendering. And yet they don't realise that they have each time they start these strategic agreements, they're effectively tendering. They're locking out everybody else, they're having a one-on-one conversation, MA is trying to get something over, G BMA a little bit, because in the end they can work together on some various bits and pieces, but where's the money gonna go? Is it gonna go into generics or innovators? And you actually do a tender. You do more of a tender than the tender that is actually run for products. And then people can look at other things, and I know there's been discussions about the guild, and you know, they lock people out. Well, they don't really. Um, it's a service provision, and you know we we do approach it slightly differently. But that's why we've been saying we don't want as patients, we don't want any discussion of the that three-letter acronym. Oh, I'll have to say it. We don't want to discuss the HTA review and its outcomes. A process is not what patients need, and being part of that process or a tinkering of it. And we don't want to discuss saving measures, and we've got a heap of them, but we won't put them forward yet, because we just said the fundamental principle to us is the system is broken because you legally don't consider me, and you take great pride, and that that that article in the conversation is proof of why we need lit legal change, because that author thought it was really okay to completely set aside the patient in any of this discussion. And so until we change the law, until the you know, the minister has to say to PBAC and to the department, these are my priorities, you will consider the patient first, and then the pricing of how that actually comes to be. But until we b empower them to think differently and to reform the system, we are just walking straight back in to the same conversations and we will be sitting here in two years' time, Paul, when everyone's having a conniption because something was passed in legislation that nobody quite understood, and now they can't deal with this price cut or this, you know, particular definition of something. And that's why we are, you know, encouraging everybody and anybody and writing to everyone to saying, can you please stop? Can you please take this first fundamental step, which is change the law to make it about us first? And the moment you do that, then it completely frames how you price, how you negotiate, how you do everything else. But we are kind of begging everybody to Well, it doesn't, it's never it's never worked for them.

Paul 27:49

It's never been positive. And my advice, my advice is that if you prepare for this negotiation, they call it strategic agreement. It's it's nothing it's there's nothing strategic about it. And if you can if your consultants are modeling pricing proposals, which they are Yeah, it's the ultimate tender. And if you take and if you take those pricing proposals into the negotiation, you know what you're gonna get? You're gonna get a pricing agreement.

SPEAKER_03 28:17

Yeah.

Paul 28:17

I mean, I was You're tendering. Why why wouldn't you introduce other issues to it? Like clinical trials, all of the reform that people still want on clinical trials. Why wouldn't you broaden the conversation out to a national interest conversation about life sciences? I did an amazing interview this week with the head of the Bogo Road Innovation Junction, which has been built in Brisbane. It's a bit like the cluster in Melbourne around Parkville, and the one the one, the two actually they've got going in in Sydney, which is it was an enjoyable conversation. That the with Oz Biotech, they they have uh it's the old Princess Alexandria hospital site. And how old is that site? Because she was the wasn't she like George V's wife or something, Alexandria? But but uh and Bogo Roachel, and that's been created. They've all of these different government departments across different levels of government in Queensland, federal, local, different health areas have got together to build this junction, this innovation junction, a build and and for start to foster startups and things like that. Why wouldn't you have conversations about that and the value and importance of that? If you have a conversation, if you go into this negotiation talking about price and HTA reform, you know what you're gonna get? A conversation about price and HTA reform. And it just doesn't behoove you, it has never ever worked. So to me, the first step is to seriously contemplate whether because there is no justification for an NDA outside of the button, there's absolutely no justification for it. Uh it's just the reptilian part of the brain in bureaucrats saying we've got to control this and we've got to keep everyone divided and apart. And I think you're absolutely right to say, Well, whoa, whoa, whoa, whoa. Well, you haven't even spoken to patients yet. There's not even an official announcement that these negotiations are effectively underway. What it relates to, what the potential implications are, and we know based on previous agreements that the implications are huge. So I just think pump the brace guy, the the locked door approach to negotiation, there is not one example of where it's worked. Not one. So maybe just putting it out there, a different approach is required.

Felicity 30:50

Yeah, we can live in hope.

Paul 30:53

Uh okay. Well, we got word of the word, we've got an audience suggestion. Okay. It's a very it's a it's a it's a technical one. And uh it's like uh PBAC said price reduction is needed to restore the cost effectiveness. Which it hurts sort of hurts my brain uh when I say it, but I get it right, because that's the whole price reduction approach has been cut become such a characteristic of the system in that in order for you to be cost effective you have to you have to lower the price. And in fact, I I I gave this presentation at ARCS last year where I went through I had this list of all of the objections the PBAC had to a listing, and it was you know restriction, patient group, blah blah blah blah blah blah whatever. And every single solution was a price reduction. And in fact, uh the last one was this is uh one product that was recommended, it was for a high medical need, and it represented high added therapeutic value. And and what was the outcome required? Price reduction. Price reduction.

Felicity 32:11

Well, I do remember uh being at an MA sponsored conference talking about when everyone wanted to put productivity into the pricing, and I said, seriously, we're already discounting on all other uncertainty. If you start to add in another thing without actual systemic reform, you'll be further discounting if I'm looking at second and third round effects. Uh look, it it does bring a smile to my faces, you know, because there's there's two ways it can happen. One is a medicine was listed and didn't actually achieve the outcomes that were intended, and that can be genuine. Like you can do a proper post-market review and find that a medicine you listed at a price didn't achieve the health outcome benefits that were anticipated. And so, yeah, a a pricing reduction is required because it's not um delivering the same outcome. The the one I think you're, you know, and this is probably how we've got to the MS example, when you manage to bring something else in and you manage to get, you know, convince a naive provider to offer a significant price cut because they don't understand the the rules of the game, and then because you use that as an opportunity to to whack it down. Um I always find that kind of curious. It sort of made a little bit more sense in you know pre-2015 when you didn't have F1 statutory price cuts when innovative medicines were based on the duration of age starting to take a price cut. So it's it's a nice, easy technical way of making you feel that legally you are obliged to do that to stay on the PBS. And more often than not, companies take the product off themselves, or you know, I think the the really bulky ones say a triple D and a delist it. So it's it it can be important, but it has been weaponized in that broader regime of our pricing reductions and the way we negotiate risk shares, etc. So I think that's the problem with it is that when it was it's largely a standalone policy, you know, but in you know when it started, it made sense, but we keep adding. And when we add and add and add all these different pricing policies, we end up with this, you know, perfect storm, which has been MS and I suspect also the breast cancer treatments. And that becomes our problem. We don't always stop and take a step back and say, well, if we're adding this in, we don't need to do this anymore. And we used to do that. So if you think about the split between F1 and F2, so for those who don't understand that, that's roughly the innovative medicines and the generics or brand compet competition medicines, and we split some of that so you couldn't do it. We, when we introduced price disclosure, we said in the weighted average mean treatment cost, where we used to look at the same, you know, same bank, same bark, but it was only so far as until something entered price disclosure, because we understood it really distorted the market, and that wasn't fair pricing for medicines that were still sitting in F1 or sitting in F2 and actually not undergoing price disclosure. So there were all these things that when we started with that evolution of chipping away at some of the the more uh extreme uh pricing benefits, and when we started to claw them back, we would modify other parts of the system to stop that overstep. And I don't think the system, instead of actually doing that balance, it's actually adding on. And that's how you've ended up with this cost-effectiveness nightmare.

Paul 35:36

Well, and people have to understand, I don't think enough thought is given to the trajectory. A program a program like the PBS, which is heavily institutionalized to a fold, evolves on a trajectory. So so if you look at the cost reduction to achieve cost effectiveness, that's the inevitable evolution of the program. Because it's constantly looking, it's constantly searching for ways to get more for less. That's the strategic driver. And so when people think about it in 2026 or agreeing to something in 2026, you've got to think about what it's gonna look like in 2030 and 2035. There's not enough, not a this goes to the intellectualizing of the program. Is that can we shift the direction? Can we change the track that we're heading on? Uh see my theory, and people don't like to hear is that no, you probably can't, because a government, like any buyer, is constantly looking for efficiencies. What you can do is slow it down. F1 F2 did that. No, it shelled out the off-patent uh therapeutic areas, as it should have, but it delayed any assault, further assault on innovative medicines until 2015. And the and and the statutory price reductions, which were an inevitable consequence. So everything you always talk about for every action, there's a reaction. And this is how you've got to think about the system. So when you go into this negotiation, if you do want to think about pricing, don't think about pricing in 2026, think about what the government is gonna do next, where they're gonna where they're going to go. And it's not it's not that hard because you just got to have an honest discussion about where are the inefficiencies in the system at the moment. Now you can obviously the obvious one is biosimulus. Yeah, that's that that's the obvious one, but but where else? And I did say I was talking to someone this week, and I said, the system has become so transactional and tactical where both government and the industry have become incredibly good at taking steps along the pathway. They're just completely incompetent at selecting the right pathway. So the Medicines Australia report that came out this week, bit a pill, and there's a whole story around that, which I won't bore everyone with. Uh, but give Natasha Robinson a call. Uh and uh that that to me, that sort of rapport, well well-intentioned, but very easy to defeat. There's underinvestment the PBS, underinvestment the PBS. What are you talking about?

SPEAKER_03 38:32

You list everything that's just recommended.

Paul 38:34

We list everything that's recommended and where the company agrees with the pricing advice or the advice provided by the farm, the independent experts, the pharmaceutical benefits advisory committee. Easiest thing in the world to defeat.

Felicity 38:46

Yeah, linked to um linked to concepts. Um, so you know, the the the work on what's available here versus what's available overseas, and I'm glad they've taken the feedback from patients who have said you've got to actually make it real, not like you know, mumbo jumbo, it's it's good. Um, but yeah, as soon as you link it to the funding, the dollars, that that that is the the argument that gets broken all the time. So one of the things you've been talking about, how you presented at ARCS on everything the PBAC said to get something discounted for uncertainty. One of the most frequently downloaded pieces of material from our website since the all the media in the last two weeks was explaining how a risk share works. And we break it down into, you know, and used a real example, but to identify it to protect the the names of the innocent, of how the PBAC says, well, we think you've overestimated the number of people that need it. Oh, but we think you've underestimated how might it be. Oh, we think you've overestimated who might stay on it for how long. Oh no, but we think you've underestimated how much it'll cost the system. Oh no, we think you've overestimated compliance with the medicine. Oh, and so we showed them how that then translates and how a drug that's finally listed for $500 ends up costing $160 a packet and uh, you know, that and that the the company how much is giving away for free. Because there are all these incentives, like you said, in there to create doubt. And they use discount for uncertainty, should probably be the phrase that the medicine sector should be challenging because it's discount for uncertainty, and there's two things here discount for uncertainty, which is when you're first trying to list, and then it's your price cuts afterwards and how they all interact together. And when you explain discount for uncertainty to patients, they're shocked.

Paul 40:40

Yeah, and this is the challenge. I think I think there is a because the evidence is that there is been there has been underinvestment in the PBS, the logical thing is to argue for greater investment, but you've got to think about how is that going to be delivered. Because look look at the look at the responses of the HTA Advisory Committee chairs to the to the HTA review recommendations. We don't agree with anything that could involve the greater greater spend. The HTA review itself ruled out higher prices because it would reduce the benefit to government. So these are the issues you've got, and unfortunately, they're the hard ones. They're the hard ones. But I can easily show that there's underinvestment in the PBS, but the government can easily say, well, as they did at budget time, we have listed six billion dollars on the PBS in the last, you know, 12 months, 12 months, and we list all medicines based on advice from the independent experts. Now, that's that is a very hard, once that comes out, once that line is dropped on you, it is very hard to get around. So in advocate in advocacy and having advocated around PBS issues on every side of the debate for such a long time, uh this is this is a issues-rich environment that does not lend itself to sort of standard. I'm not saying that health is particularly any different or any greater, but but this is so institutionalized, this system. Simple one-dimensional debates are not going to cut it. Or arguments are not going to cut it. What you've got to do is you've got to anticipate how the government responds. And the beauty of it, what makes it easy, is that the government's response to resist change to the PBS has been changed since the night has been the same since the 1990s. It's all about the independent experts. We take the advice. So I'm sorry, you've you could what you've got to do is you've got to take this system on at its base. At the moment, you're taking it on at the strongest point of the keep. You've got to take it on its vulnerable walls. Think about it like an old castle. And the vulnerable walls is the intellectual foundation of a system that you've you've pointed out this week only prioritises price. Gives patients no rights. And we've saw that saw that, you know, I argued this week is that the system can't take any more patient input. You know, because the more the patient input goes up, the longer the delays, because of course, as you it just creates more levers to say no. Yes. So I like the energy that's been brought to the debate. Great. Um big fan of it. Reports, yep. But I just think people have to take a step back and not think about this is the argument that we're going to put out there. Think about how that argument's going to be defeated. So sometimes my observation of Mike Butler is he doesn't even feel the need to respond.

SPEAKER_00 43:39

Very true.

Paul 43:40

So, yeah. Yeah. So uh I wonder how all the companies are going at the Labour Conference. See the Chinese stormed out.

Felicity 43:52

That's funny.

Paul 43:53

I didn't even realise. I mean, I used to go to those things.

Felicity 43:56

Of course you did.

Paul 43:58

Yeah, I went when I worked in the industry, but I always So had w had to go when I was a ministerial advisor. And I can tell you like ministers just shit, it's like they've got to smile because obviously you're paying. So they've got to pretend you they like you.

Felicity 44:12

But must be nice to be able to afford to go.

Paul 44:14

Well, it's 12,000 for this one, apparently. Wow. Yeah.

Felicity 44:17

So you know, for example groups, like base patient groups that I work with, $10,000 a year is what they've got to live on to do their all their advocacy work.

Paul 44:27

Well, my view is the industry should have given up all their spots for patients. Because the minister, if he turns up to the meetings, as in the health minister, will just sit there nodding his head, saying the same thing to every single person. A bit harder when it's an actual patient. That to me, I mean, it's easy for me to say that because I'm not having to shell out the $12,000, of course, but I think that's the changing changing the conversation. Nobody is happy with with where things are. So you've got to make them uncomfortable about it.

SPEAKER_03 44:59

Yeah, you do.

Paul 45:00

And it's the easiest thing in the world for a minister to sit across the table and say, I completely agree with you on HTA reform. We definitely need to update the system. You have been consistently on the record, and you guys have been involved in this process all along, and we really look forward. We are or as the health department said at the last estimates. What are you talking about, Senator? We're well into implementation.

Felicity 45:20

Well, there were four um updates on the PBAC in July, gosh.

Paul 45:24

Well, well into implementation, and that's that's everything that's going to be said. So find it to it is critical to find a way to change the conversation. Can I you have seen that uh the Trump administration has opposed imposed a 12.5% tariff.

Felicity 45:43

Instead of the 10%, yeah.

Paul 45:44

12.5% tariff.

Felicity 45:46

And of course and 100% on generic starting 2027.

Paul 45:50

Yeah, yeah, which is fine. I mean, that's been six very successful for them in getting that the goal there. I mean, I mean, our our exports or pharmaceuticals anyway, will come from one billion in broad meadows in Melbourne, but and it's blood products. And I saw the Australian government today talking about how it breaches the US Australia Free Trade Agreement. And I know I'm the only person out of 28 million who cares about this, but the Australian government has never implemented its commitment, which it was not in the PBS side letter, is in the actual text of the agreement. So it is a formal commitment. Never ever implemented the patent notification system. The formal patent notification system. So we are in, and I know I'm the only one who cares about it. But we are in no position to lecture the US government about not fulfilling our obligations to that agreement.

Felicity 46:40

Yeah, well, uh I do like that. It's you gotta you've got to be very clear in in your own what you've done before you you go and start attacking those things. So I I do recall having those discussions back in 2011 and 2013 and 2016, and I thought there was almost some movement on it at one point in time, and then it just all disappeared again.

Paul 47:04

You interestingly, the TPP, which didn't go ahead, included eight years of clinical data protection. And people don't understand, it doesn't matter, it's not gonna make a difference in Australia, okay. But the the international trade view, and I know trade is a dirty word, particularly free trade is a dirty word these days, but the trade view is that if the US can't get Australia to agree to an extended period period of clinical data protection, then how are we gonna go in other parts of the world? So it's about a standard. There would be one or two historical examples where clinical data protection actually made a difference to the PBS. One famous, which ended up in court, so that was fine. But where there's a patent, there'd be virtually no example of uh clinical data protection period expiring after a patent. There's just no example of that that I can think of besides one. So it's about a signal. And I know, look, if I write about IP, it's a publication killer. But it's actually because no one's interested in it, but it it is actually incredibly important. And uh it was in the TPP eight years, and then the the TGA did a review a few years ago and said, Yeah, we should probably legislate this system of patent notification. Didn't proceed because the ACC objected to it because they're anti-IP. Uh and here we are. We're still we're still waiting for it, but but we should keep arguing for it because it's the it's the it's the right thing to do.

Felicity 48:44

Well, yeah, I mean it obviously is an important issue because otherwise it wouldn't have made it into the article and the conversation about tearing IP down. So it obviously is still an important issue. Um look, I think it's a it's an area of that we take seriously in all these conversations about AI and who owns IP and their designs and everything. We we take it seriously. So, you know, I don't always necessarily have the same opinions with on with you on data protection and what it means here in Australia, etc. But we do need to have the conversation and the the challenge here is that if we did agree to something and we didn't do it, we did not do it, then you have to expect that at some point that comes back to bite you, and and this would be the example of it, which is um I I noticed also that this is being linked to to modern slavery and uh it and the the US's uh approach to it versus Australia's. And uh I think it's something we just have to deal with now. And so look at it's unfortunate, and I think maybe sometimes we think that because 15, 20 years has gone past, no one cares. And every now and then those decisions, those risks come back to bite you, and that's what we're dealing with now in Australia. But um it made me a slight segue on modern slavery because I saw this week that uh pharmacy students in their placements are now going to be covered under some of those protections for uh when you're you're doing a placement that you should be appropriately remunerated or at least have some of your costs addressed. And I did post on it because at Better Access we've been since 2021 saying that modern slavery isn't just about what happens overseas. Modern slavery very much happens here in Australia, where big organizations, um, particularly in the private sector and in the public sector, in in our health systems is what particularly, we use the labour of students and tell them it'll look good on their CV or it's part of their training to get freebies.

Paul 50:54

Or the old internship.

Felicity 50:56

Yeah, you know, and I you know, it's like it's one of the things that really m upsets me as a as a not-for-profit, which is we will always pay the students who are doing the research for us because if it looks good on their CV, then it deserves to be remunerated. And it's uh and you should we see it it particularly critical in the health sector where you're doing placements you often in state long hours and and these are students struggling to make ends meet. But we see it in so uh so many other areas of um when people are studying and they're trying to get a foot in the door and we're trying to tell them what might look good. And I think we need to be careful because a lot of the cost of living discussions at the moment, um, workforce issues that are happening, it's very easy for organizations to take advantage of the desperation of students to find something that works within their area of study to try and get a leg up. And I think it's a very important reminder to anybody who is looking at that, whether you're a not-for-profit or your private sector, do not take advantage of students.

Paul 52:04

Yeah, well said. All right, well, uh another interesting week, I doubt we'll be heading into a another yet another interesting week.

Felicity 52:17

Um we're on the road next week.

Paul 52:22

Oh yeah, yeah, we're gonna speaking in city next week, aren't we? Yeah, yeah. Oh, yeah.

Felicity 52:27

I wasn't gonna disclose it's because you and I are actually on a road trip. We're like, you know.

Paul 52:32

Yeah, that'll be good. Uh yeah, I'm I'm actually looking forward to that. And the the bassard hounds go off to their luxury villa.

Felicity 52:39

Noise.

Paul 52:40

Yeah, yeah, yeah. One loves it out there, the other one not so happy.

Felicity 52:45

And just say that you know, if you travel with Paul for work, he frets about the bassards the entire time. I wonder how my bassards are.

Paul 52:52

Yeah. Well, I have to pay extra, so they send me photos. Yep. All right, Felicity. Thank you. Thanks, Paul.