A new report commissioned by Johnson & Johnson says Australia's framework for approving and funding new medical technologies must evolve to ensure it meets the needs of patients.
The report prepared by Dr Brendan Shaw (Shawview Consulting) - Getting Australia to the front of the queue - says, "If COVID-19 has taught us anything, it’s the value of the healthcare system to our economic and social security."
However, it also says it has exposed the "fragility and interconnectedness of the healthcare system and the need for the healthcare industry and Government to work seamlessly together to deliver the diagnostics, treatments and medical equipment necessary to not only respond to a global pandemic, but also deliver the medical care that Australians need and deserve."
"While Governments may be fixated on the COVID-19 response, it will be a missed opportunity if they are not also using this moment to re-evaluate and change the way Australia develops, evaluates and funds medical technologies such as pharmaceuticals, vaccines, medical devices and diagnostics."
Shawview Consulting says that as one of the wealthiest countries in the world, Australia "should be among the first in the world to have access to new medical technologies."
Instead, it points to the fact Australia ranks 17 out of 20 OECD countries when it comes to access to new medicines.
"While countries like Japan, Germany, Austria and Great Britain get around 60% of their new medicines reimbursed within three months of registration, Australia only manages to get 2% reimbursed within three months," it says.
The report says the validity of health technology assessment is being challenged by a range of factors, including the pandemic and the "increased blurring of the boundaries between medicines, devices and diagnostics".
It says, "In normal pre-COVID times, HTA [health technology assessment] used standard assessments of cost per Quality Adjusted Life Year (QALY) thresholds to decide on medical technology interventions on the assumption that informed choices needed to be made about the allocation of limited resources to competing treatment options and diseases. The COVID-19 response has raised questions about the traditional cost-effectiveness thresholds used for HTA decision making, as governments around the world have committed vast resources to respond to the pandemic absent of the normal HTA processes that accompany healthcare decision making in many countries.
"This raises obvious questions about the validity of the ‘normal’ HTA processes and values used to decide funding medical technologies and health interventions. If medical interventions for other health conditions have been rejected over many years by HTA committees using lower economic values of life compared with that used in response to COVID-19, what does that say about the values and decision-making processes used by those committees? It raises the question of whether HTA committees in many countries would have recommended or rejected the various interventions governments around the world adopted to ‘flatten the curve’ and protect the population from COVID-19."
It also laments high out-of-pocket costs in Australia compared to other developed countries.
"To get to the front of the queue for world-class treatments and innovations, Australia’s medical technology policy must evolve to respond to changes in technology, developing global trends and the changing health and economic needs of Australians."
The report says the rapid emergence of new medical technologies has "exposed the outdated nature of the assessment and reimbursement frameworks in Australia" with the rapid approval of COVID-19 vaccines evidence of what can happen when regulators, policymakers and industry demonstrate a "collective will".
"This is in stark contrast to the usual pathway to market for a medicine or medical device," it says.
"The hallmarks of the Australian system for drug and device approvals have been excessive administrative costs and inefficiencies in evaluation processes, a focus on short-term cost-saving over long-term investment in strategic capability, and Australians having one of the longest waiting times in the world for access to new medical technologies that make their lives better.
"These tensions will only get worse without sensible policy reform," it says.
It proposes reforms to the Pharmaceutical Benefits Advisory Committee, including changes to and limiting its use of health technology assessment.
On medical technologies, the report says regulation and funding models should be "guided by a holistic and evidence-based" approach to evaluation.
The report calls for a "more considered and long-term approach" to medicines policy.
"While concerns within government circles over recent decades have focussed on the financial sustainability of the PBS, increasingly the issues of its health and industrial sustainability are coming to the prominence. Given the relative financial sustainability of the PBS and NIP, particularly when compared to other parts of the health system, there is now fiscal ‘head room’ to focus more on how the schemes can capitalise on new technologies for the benefit of the Australian population."
On medical devices, it says, "Antiquated references to prostheses and devices do little justice to the enormous range of life-saving medical technologies that are vital to the functioning of the healthcare system and to improving the lives of millions of patients around the world. The broad range of these products and their application in a healthcare setting contribute to the problem of enabling an evidence based, approval and assessment framework that rewards the innovation, efficiencies and outcomes that these devices deliver."
It says the proposed application of health technology assessment to the private funding of medical devices should be reconsidered in favour of 'outcomes-based purchasing or value-based contracting'.
"These models represent opportunities for payment for medical devices to be based more on their ability to achieve their primary health outcomes, rather than simply the supply of the device itself. Reform of Australian medical device funding should consider greater uptake of such innovative funding models going forward in both public and private hospitals."