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Ley tries to stymie opposition with hep C link

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Health Minister Sussan Ley has attempted to stifle opposition to controversial pathology and diagnostic imaging bulk billing incentive cuts by linking the changes to plans to eradicate hepatitis C within a generation.

The Health Minister said a $1 billion initiative to publicly subsidise access to breakthrough hepatitis C drugs had been “fully accounted for” in the mid-year Budget update unveiled on 15 December, but had not been announced at the time to enable confidential price negotiations with the drug companies to be finalised.

Ms Ley confirmed to the Adelaide Advertiser that axing and winding back bulk billing incentive payments for pathology and diagnostic imaging tests – collectively expected to save $650 million over four years – would help fund the subsidy for hepatitis C drugs.

“This demonstrates that the Government is prepared to make the tough decisions to prioritise where we should put our health dollar in Australia,” the Minister said.

By linking the two measures, Ms Ley will make it harder for political opponents of the bulk billing incentive cuts to block the measures in the Senate, where many previous health measures have foundered – most recently proposed changes to the Medicare safety net.

But, while he was “really pleased” hepatitis C patients would get access to potentially life-saving drugs, AMA President Professor Brian Owler warned the Minister she would be “on dangerous ground” if she sought to trade the interests of one group of patients against those of another.

Shadow Health Minister Catherine King told the Adelaide Advertiser that, while she welcomed the decision to list hepatitis C treatments on the PBS, it was “an absurd proposition” to make patients with cancer, diabetes and other serious health conditions pay for the treatment of other seriously ill people.

Professor Owler has criticised the bulk billing cuts, warning that they amounted to a “co-payment by stealth” because they would force pathology companies to begin charging patients a fee.

One of the nation’s largest providers, Sonic Healthcare, has already warned that patients could be charged $20 for a blood test.

Professor Owler said such a co-payment would hit chronically ill patients in need of frequent pathology tests particularly hard, and would discourage many from having diagnostic tests, increasing the risk of more serious health problems later in life.

But Ms Ley has vowed to confront providers over any plans to introduce a co-payment, claiming such a move was “not appropriate”.

She has argued that competitive pressures in the pathology industry meant that companies should absorb the cut, rather than passing it on to patients.

But the pathology market is dominated by two major providers, and the fact that they are contemplating introducing a co-payment suggests the Government’s analysis of the dynamics of the market is flawed.

But the Minister appears confident that she has the upper hand in the politics of the debate, particularly given her move to link the bulk billing incentive cuts to the hepatitis C announcement.

“I have every expectation that Labor will pass these savings, as they make perfect sense – and, particularly, in the context of an announcement like [the hepatitis C initiative],” she told the Australian Financial Review.

Under the measure, the Government will list four new frontline drugs for the treatment and cure of hepatitis C, including sofosbuvir with ledipasvir (Harvoni), sofosbuvir (Sovaldi), daclatasvir (Daklinza), and ribavirin (Ibavyr), on the Pharmaceutical Benefits Scheme from March next year.

The move is expected to benefit around 233,000 people currently infected with the blood-borne virus that attacks the liver causing serious illness, including cirrhosis and cancer. Around 10,000 people are diagnosed with the disease each year, and it responsible for about 700 deaths annually.

The Government’s decision came eight months after the Pharmaceutical Benefits Advisory Committee recommended that sofosbuvir be listed on the PBS because of “high clinical need”.

This overturned advice from the PBAC a year earlier, in which it recommended against listing the drug because it was likely to have “a high financial impact on the health budget”.

In recommending the drug’s listing, the PBAC warned it was likely to cost taxpayers $3 billion over five years to put 62,000 chronic hepatitis C patients through a course of treatment – three times the Government’s current budgeting.

Though sofosbuvir has been hailed as a “game-changing” medicine that can cure hepatitis C in as little as 12 weeks, its prohibitive price – a course of treatment can cost more than $110,000 – has meant that until now it has been out of the financial reach of most sufferers.

Listing on the PBS means a prescription will cost as little as $37.70 for general patients and $6.10 for concession card holders.

Ms Ley said the combination therapies listed on the PBS had a 90 per cent success rate, and caused fewer side effects than current treatments. She said in most cases patients will only need to take the drug as a pill.

The fact that the Government has budgeted just $1 billion for the measure suggests either that it has managed to negotiate a significant discount with the drug companies, or will eventually need to allocate more money to the effort.

Adrian Rollins

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