Row over lung cancer drug deal

Lung cancer

5 Jun 2018

The Opposition has questioned why the government gave a drug company a special pricing deal for its lung cancer drug, against the advice of the PBAC.

Labor has accused Health Minister Greg Hunt of “cherry picking” the PBAC’s recommendations after he allegedly signed off on a “special pricing arrangement” (SPA) for the tyrosine kinase inhibitor afatinib (Giotrif) which will allow the sponsor, Boehringer Ingelheim, to conceal the price of the medicine for commercial reasons.

The PBAC had recommended afatinib to be listed for non-squamous non-small cell lung cancer, but knocked back the request for a SPA in 2015, telling the Department of Health the drug did not qualify because it did not have any “unique characteristics” compared against other treatments for the same indication available in Australia.

According to Labor, department officials confirmed in Senate Estimates Wednesday that Health Minister Greg Hunt had approved the SPA.

Opposition spokeswoman Catherine King says the Government had maintained since 2014 that the medicine did not meet the Department of Health’s eligibility criteria for the arrangement.

“So why did Mr Hunt change his mind and decide to set aside the advice of the PBAC – which officials testified was an unprecedented move – in order to deliver a special deal to this company?” she said.

“Is it because he wanted the manufacturer’s support for a trial of new payment arrangements announced in the 2018 Budget? The SPA and the trial were both in the Government’s deed of agreement with the company.”

Ms King said she had asked the Australian National Audit Office to investigate.

“Health ministers should always follow the advice of the PBAC. Ministers who ignore or cherry-pick its recommendations risk chipping away at the trust in the drug listing system that has served us so well.”

Minister Hunt said the special pricing agreement was one of 124 that the government held with sponsors. Such agreements mean the price the sponsor agrees to accept is not published on the PBS Schedule.

“These important arrangements are put in place so that Australians are able to access medicines through the PBS that they may not otherwise have access to due to the negotiated price being lower in Australia than in other markets,” Mr Hunt said.

The May 1 listing will mean up to 220 patients who would have paid $33,550 a year for afatinib will now pay $39.50 per script ($6.40 concessional).

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