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Sponsors struggle with Ministerial discretion

The 2017 Medicines Australia Strategic Agreement with the Australian Government extended the existing five-year anniversary statutory price reduction (SPR) of 5% for F1 medicines and introduced new SPRs for drugs that have been listed for ten years and fifteen years over the five-year term of the agreement (10% and 5%, respectively).

Sponsors were afforded the chance to apply for discretion from the Health Minister to avoid the price cut, based on relevant pricing or clinical factors, with the outcomes for eligible PBS items becoming known on 1 June 2018, when price reductions were implemented.

A Commercial Eyes analysis has identified items that received Ministerial discretion, showing a bleak picture for Sponsors who seek to avoid these newly legislated cuts. Out of 582 items eligible for Ministerial discretion, only 64 were able to avoid a price cut.

Forty-two secured full discretion, with 22 only receiving partial discretion. An overview of these outcomes, and a list of Sponsors receiving discretion for multiple items are presented below.

 

Commercial Eyes has completed a detailed report on Ministerial discretion outcomes, including analysis of the application of Ministerial discretion by:

  • Manufacturer
  • Therapy area
  • PBS Program; and
  • Manner of Administration

The report also includes an analysis of successful outcomes to identify trends and commonalities between items and can be purchased directly from Commercial Eyes. For additional information, or a customised report, contact Matthew Douglas, Market Access Consultant, at matthew.douglas@commercialeyes.com.au.

 




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