Challenges for Australia's Bio/Nanopharma Policies: trade deals, public goods and reference pricing in sustainable industrial renewal

[GRADE: Evidence to Decision (EtD) framework for coverage decisions]

BACKGROUND

Coverage decisions are decisions by third party payers about whether and how much to pay for technologies or services, and under what conditions. Given their complexity, a systematic and transparent approach is needed. The DECIDE project, a GRADE working group initiative funded by the European Union, has developed GRADE Evidence to Decision (EtD) frameworks for different types of decisions, including coverage ones.

METHODS

We used an iterative approach, including brainstorming to generate ideas, consultation with stakeholders, user testing, and pilot testing of the framework.

RESULTS

The general structure of the EtD includes formulation of the question, an assessment using 12 criteria, and conclusions. Criteria that are relevant for coverage decisions are similar to those for clinical recommendations from a population perspective. Important differences between the two include the decision-making processes, accountability, and the nature of the judgments that need to be made for some criteria. Although cost-effectiveness is a key consideration when making coverage decisions, it may not be the determining factor. Strength of recommendation is not directly linked to the type of coverage decisions, but when there are important uncertainties, it may be possible to cover an intervention for a subgroup, in the context of research, with price negotiation, or with restrictions.

CONCLUSION

The EtD provides a systematic and transparent approach for making coverage decisions. It helps ensure consideration of key criteria that determine whether a technology or service should be covered and that judgments are informed by the best available evidence.

GRADE EVIDENCE TO DECISION (EtD) FRAMEWORK FOR COVERAGE DECISIONS

Objectives: Coverage decisions are decisions by third party payers about whether and how much to pay for technologies or services, and under what conditions. Given their complexity, a systematic and transparent approach is needed. The DECIDE (Developing and Evaluating Communication Strategies to Support Informed Decisions and Practice Based on Evidence) Project, a GRADE (Grading of Recommendations Assessment, Development and Evaluation) Working Group initiative funded by the European Union, has developed GRADE Evidence to Decision (EtD) framework for different types of decisions, including coverage ones.

Methods: We used an iterative approach, including brainstorming to generate ideas, consultation with stakeholders, user testing, and pilot testing of the framework.

Results: The general structure of the EtD includes formulation of the question, an assessment using twelve criteria, and conclusions. Criteria that are relevant for coverage decisions are similar to those for clinical recommendations from a population perspective. Important differences between the two include the decision-making processes, accountability, and the nature of the judgments that need to be made for some criteria. Although cost-effectiveness is a key consideration when making coverage decisions, it may not be the determining factor. Strength of recommendation is not directly linked to the type of coverage decisions, but when there are important uncertainties, it may be possible to cover an intervention for a subgroup, in the context of research, with price negotiation, or with restrictions.

Conclusions: The EtD provides a systematic and transparent approach for making coverage decisions. It helps ensure consideration of key criteria that determine whether a technology or service should be covered and that judgments are informed by the best available evidence.

Generic drug prices and policy in Australia: room for improvement? a comparative analysis with England

OBJECTIVE

To assess the degree to which reimbursement prices in Australia and England differ for a range of generic drugs, and to analyse the supply- and demand-side factors that may contribute to these differences.

METHODS

Australian and English reimbursement prices were compared for a range of generic drugs using pricing information obtained from government websites. Next, a literature review was conducted to identify supply- and demand-side factors that could affect generic prices in Australia and England. Various search topics were identified addressing potential supply-side (e.g. market approval, intellectual property protection of patented drugs, generic pricing policy, market size, generic supply chain and discounting practices) and demand-side (consumers, prescribers and pharmacists) factors. Related terms were searched in academic databases, official government websites, national statistical databases and internet search engines.

RESULTS

Analysis of drug reimbursement prices for 15 generic molecules (representing 45 different drug presentations) demonstrated that Australian prices were on average over 7-fold higher than in England. Significant supply-side differences included aspects of pricing policy, the relative size of the generics markets and the use of clawback policies. Major differences in demand-side policies related to generic prescribing, pharmacist substitution and consumer incentives.

CONCLUSIONS

Despite recent reforms, the Australian Government continues to pay higher prices than its English counterpart for many generic medications. The results suggest that particular policy areas may benefit from review in Australia, including the length of the price-setting process, the frequency of subsequent price adjustments, the extent of price competition between originators and generics, medical professionals' knowledge about generic medicines and incentives for generic prescribing. WHAT IS KNOWN ABOUT THE TOPIC? Prices of generic drugs have been the subject of much scrutiny over recent years. From 2005 to 2010 the Australian Government responded to observations that Pharmaceutical Benefits Scheme prices for many generics were higher than in numerous comparable countries by instituting several reforms aimed at reducing the prices of generics. Despite this, several studies have demonstrated that prices for generic statins (one class of cholesterol-lowering drug) are higher in Australia compared with England and many other developed countries, and prices of numerous other generics remain higher than in the USA and New Zealand. Recently there has been increasing interest in why these differences exist. WHAT DOES THIS PAPER ADD? By including a much larger range of commonly used and costly generic drugs, this paper builds significantly on the limited previous investigations of generic drug prices in Australia and England. Additionally, this is the first comprehensive investigation of multiple supply- and, in particular, demand-side factors that may explain any price differences between these countries. WHAT ARE THE IMPLICATIONS FOR PRACTITIONERS? Practitioners may contribute to the higher prices of generic medications in Australia compared with England through relatively low rates of generic prescribing. There are also significant implications for health policy makers, as this paper demonstrates that if Australia achieved the same prices as England for many generic drugs there could be substantial savings for the Pharmaceutical Benefits Scheme.