Eli Lilly’s sudden decision to shut the door on PBS listing for tirzepatide highlights how Australia is ‘lagging behind’ in funding new medicines.
The process to list medicines on the PBS is outdated, slow and not fit for purpose, Medicines Australia has said following Friday’s decision by Eli Lilly Australia not to list tirzepatide on the Scheme, despite a positive recommendation by the PBAC.
The decision means as many as 450,000 Australians will be unlikely to have subsidised access to the medication, without further negotiations and a change of mind by one of the parties.
Federal health minister Mark Butler told media he would be seeking advice from the Department of Health, Disability and Ageing about Lilly’s call.
He said there were often “very robust” price negotiations between multinational drug companies and the federal government.
“That tension and that price negotiation is a very big reason why we have such a successful and sustainable Pharmaceutical Benefits Scheme,” he said on Sunday.
“I will be receiving a report about those negotiations. I understand that the company has made some public statements about it but I’ll be taking advice from my own department.”
Medicines Australia CEO Elizabeth de Somer said a government review had shown that the system for getting medicines on the PBS was “outdated”.
“It’s not fit for purpose. It hasn’t kept pace with scientific innovation. It’s too slow,” she told ABC News Radio today.
“Australia is already lagging behind,” Ms de Somer said.
“Of over 300 drugs that have been launched globally to other countries, only around 26% or 27% of those drugs are even coming to Australia for Australian patients.
“We’re missing out on new cancer therapies, on autoimmune therapies, on therapies for rare diseases, and it’s a choice [by the government].
“The PBS has not invested sufficiently over several decades in order to get access to better drugs that are available in other countries.”
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Lilly made the decision despite a recommendation by the PBAC that the dual GIP and GLP-1 receptor agonist be listed on the PBS.
In the outcomes of its March meeting, the PBAC noted that tirzepatide (Mounjaro) use had benefits in patients with type 2 diabetes including improved daily blood glucose readings, improved HbA1c results and weight loss.
Eli Lilly Australia said it “regretfully” abandoned its goal to have tirzepatide listed on the PBS for type 2 diabetes, saying “a positive PBS funding recommendation came with unviable and unsustainable conditions”.
Using the lowest cost comparator (LCC) – where medicines compared to the least expensive alternative rather than the medication most commonly replaced in clinical practice – can lead to lower price benchmarks, delayed reimbursement decisions, and reduced availability of new treatments for Australian patients.
“The shift toward LCC is directly shaping price negotiations and PBS listing outcomes,” the report said.
“Sponsors describe circumstances where, even after a positive PBAC recommendation, LCC-anchored price expectations made it commercially non-viable to proceed to listing.
Meanwhile, a new report argues that the use of comparator selection within Australia’s Health Technology Assessment process influenced access to new medicines.
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Lilly Australia and New Zealand general manager Manny Simons said the company could not proceed with the tirzepatide listing under the proposed conditions.
“Our decision was driven by the simple reality that the price conditions proposed by the Australian Government are unrealistic and unviable,” Mr Simons said on Friday.
“We do not make this decision lightly.
“After four reimbursement submissions and extensive departmental engagement over three years, we were left with no other option.
“We understand how disappointing this will be for up to 450,000 Australians living with type 2 diabetes who should have access to Mounjaro through the PBS.”
Tirzepatide has been designated by the World Health Organization as an essential medicine for type 2 diabetes. Eleven countries – including the UK, Canada, Japan and China – fund the medication for patients with the disease.