Harry Jenkins (Scullin, Australian Labor Party) Share this | Hansard source

I rise to speak on the National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007. In doing so I make the comment that, in the debate so far, the importance of the Pharmaceutical Benefits Scheme has been well and truly canvassed. No member from either side of the parliament would have any great problem in agreeing that, as the Pharmaceutical Benefits Scheme has developed, it has become a very important plank in Australia’s healthcare system. Regrettably, when we talk about the Pharmaceutical Benefits Scheme we often do it in isolation from the rest of the health budget. I get a little amused when we hear comments in a debate like this on the need to have a sustainable PBS and, as the member for Cowper asserted, that the measures contained in this bill position the PBS for the future. I think that if we reviewed the different debates about the PBS we would see similar comments made quite often.

I would acknowledge that what is intended by this piece of legislation is a pretty big step—a great departure from the way in which the Pharmaceutical Benefits Scheme has presented drugs on the listings in the past. I do not intend to go into too much detail about the nature of the formularies and the two listings; I think that those very complex matters have been discussed quite sufficiently by others in the debate. I would just reflect that this debate really concerns me because it is very much an insiders’ debate. It is so technical that you really have to have had a great interest in the matters before you to actually understand what is going on.

This government’s policy development in these matters has been characterised by closed-door—though no longer in smoke-filled rooms—discussions with different interest groups. Then finally, when the legislation pops up, there is this opportunity for the Australian public to perhaps peruse it and have some input. I find that just a little disquieting. So I think it is quite proper that the member for Gellibrand, as the shadow minister and lead speaker for the opposition on this piece of legislation, has indicated that we are going to use the Senate processes to pose a number of questions that concern us about the contents of this bill. That should not be churlishly taken by those opposite as some form of attack for attack’s sake on the government. When we confront a change of this dimension it is proper that it not be given a cursory two- or three-hour debate in the House of Representatives—often with members not really being across the fine detail of the proposition—but rather that it be made open to public discussion, such as a Senate committee would provide.

I thought that the member for Moore, with his medical background, gave a very good overview of what is intended here. I have no dispute with the way he presented the facts and no dispute with the way he presented the comments from the interest groups that are out there in the public domain. But all this arose out of the minister’s announcement back in November 2006 and only came to light again, as this piece of legislation, last week.

The importance of the Pharmaceutical Benefits Scheme can be seen from the fact that it gives access to over 600 medicines, produced in 1,800 forms and marketed as 2,600 separately branded pharmaceuticals. And it does so to make sure that all Australians have access, in equity, to those drugs. The universality of the PBS has been one of the hallmarks of the system. It enables the health professionals—the medicos, the pharmacists and all those who are involved in the system—to provide these drugs to patients and to provide the advice that is required to patients. The PBS safety net ensures that the financial burden on those with chronic illnesses is appropriately lessened. Additionally, it ensures that concession health card holders and the like, who might otherwise be impeded by a lack of resources, can access these drugs.

Having said that, in the past I have related my concern at witnessing people lined up in pharmacies having to make decisions about whether they could afford the drugs they needed for the winter colds of four kids, having to juggle the family budget to gain access. This is not a reflection on the government and the other pressures that are on family budgets. But, where an illness is not planned for, families often have to make those decisions and, as many have said in the debate, the purpose of the PBS is to ensure that these drugs are accessible.

I have tried to take an interest in the Pharmaceutical Benefits Scheme for a long time. Listening to the debate, I realised that it had been a long time because today, for the first time, I heard the PBAC—which I take as a spelt-out acronym, P-B-A-C—referred to as ‘pea-back’, a word which I related to a legume returning! I do not know whether that is now the common jargon of this field, but if it is I had missed it until today.

Anyway, I think the PBAC will remain the PBAC—a body which is called upon, on behalf of the Australian public, to play a very important role, not just in the Pharmaceutical Benefits Scheme in isolation but in the whole health system. This is what I want to stress about this debate. It is disappointing that, when we talk about the sustainability of the PBS, we do it in isolation. I note that a number of my colleagues on this side of the House have emphasised that we have to remember that, for the large cost of the PBS—and it is nearly $6 billion a year—there are advantages to other aspects of our health system. Using drugs appropriately, and making sure that new drugs are accessible and used, can be ‘preventive measures’—can mean patients do not require more expensive medical procedures. Perhaps at some stage we should take a collective deep breath, step back and—in the context of the Treasurer’s Intergenerational report and the myriad reports that have come out about the way in which, as our population ages, there are going to be costs on this and that—not just zero in, in health, on the expanding costs of the PBS but look at it in the context of our overall health spend. It may be that we are not looking at the other expanding parts of our health budget where the appropriate use of modern drugs can prevent or lessen expenditure. So I hope that at some stage we will actually see that as a public debate.

My other interest in this debate is that it continues our struggle to get generics well and truly accepted. It is not as if the concept of generics is a new one. I remember that it was back in the days of Labor government that we first used pricing differences—using generic drugs, out-of-patent drugs—as a lever to lessen the costs in the PBS. And yet now, further down the track—and it is not a criticism; the point is that it is a fact admitted to by the need for this bill—this government has had to go to another level to try to continue to put downward pressure on drug prices, by using, yet again, the advantage that is given by the supply of generic drugs to put pressure on drug patent holders.

That of course is why we are coming up with the formularies—F1 and F2 drugs. It is to try and drive home the message by giving an advantage to the Australian public through taxes and through accessibility to lower price drugs if they choose not to take the least costly generic alternative and want to stick with the main brand. One of the original difficulties is in trying to convince the public that a generic drug is the same as a drug that has come out of patent. People do not simply take this on trust. I note that the government is going to devote resources to ensuring that people have more information so that they can be properly informed and have a great deal of confidence when they choose to use generic drugs.

In respect of generic drugs, a piece of jargon that has been important in the past is ‘bioequivalence’. What bioequivalence means is that, when patients use a generic drug—in which the active substance is packaged together with different binders, in different shapes and using different dyes to give it different colours—they get an equivalent outcome. I use the word ‘equivalent’ because it is important for the points I want to go to. When you use jargon like ‘bioequivalent’, people say: ‘Wait a minute, what’s at the edges here? Can we be confident?’ Over the last decade or so, we have had an argument about making sure that people can be confident about using drugs on the basis that they are bioequivalent.

Here is a definition of ‘bioequivalent’ that I found on the internet: ‘The condition in which different formulations of the same drug or chemical are equally absorbed when taken into the body.’ That is not a bad definition—it is much better than the one I fumbled with—and that is what we are looking for. When a drug comes out of patent it is important to get generic drugs on the market.

I note that one of the sets of amendments which have been circulated by the government will add to different parts of the legislation the word ‘biosimilar’. For example:

Schedule 1, item 34, page 12 (line 13), after “bioequivalent”, insert “or biosimilar”.

That comes as a bit of a surprise to me, because today is not only the first day I have heard of PBAC pronounced as ‘pea-back’; it is also the first time I have come across the notion of ‘biosimilar’. In the short time during which I have been trying to research this, I have not reassured myself that I really understand what this is. I think I understand it enough to know that it is part of a global discussion in the pharmaceutical industry and it is something that we need to get our heads around. I note that nobody on the government side has mentioned it—many of their contributions were on the basis of ‘bioequivalence’. I am not taking a shot at them, but, when the minister wraps up the second reading debate or when he moves these amendments during consideration in detail, we need to have a very full discussion of this concept, because it adds a new dimension to the way in which drugs will be adjudged.

In work done in the European Commission and in the US administration, there have been a number of interesting discussions about what is really meant by the term ‘biosimilar’, which is a different concept from ‘bioequivalent’. We ought to be careful that we are not looking at things that are interchangeable—and that will take some getting used to. At this early stage, I do not want to be part of a process that would cloud people’s confidence about using drugs that are listed on the basis of being biosimilar. I do not want to be seen to be creating tension in terms of people being satisfied that they can use these sorts of drugs. Again, trawling through the internet would indicate that this term has been around for several years, but only recently is it getting greater currency as a medico-legal term. Drugs of this type have been approved under the European Commission. This suggests that these classes of drugs arise out of biotechnological processes. I do not know why there is such a great departure from what has happened in the past. Is it that different processes are going to be used to create a generic drug once the original drug is off patent? If so, why do we have to move to the use of a new terminology and not still use the bioequivalence argument, which is really about the way a person reacts to the drug in a clinical situation?

It does worry me that there will have to be a full explanation, when one of the sources that I have—World Wide Words—that is trying to define biosimilars says:

Biosimilars are closely related to the brand of drugs that they’re designed to replace but they’re not necessarily identical—hence the name.

This goes back to that type of insider debate that I think we are having about the PBS, about therapeutic groupings and the like. Members like the member for Moore have the great advantage of being involved in the prescribing of drugs and being able to get their heads around this issue, unlike those of us who are here as representatives of the people and who do not have a detailed knowledge of pharmacology and the like. As we will be bridges to the community in ensuring that people can have confidence when these types of drugs are listed, we need a fuller explanation of what these issues are about. I am just a little concerned—and I apologise if I have got the wrong handle on this—that this new concept is to be tacked onto the bill by way of additional government amendments at the consideration in detail stage. In the global environment, because this is a new concept in the legal sense—perhaps not in the pharmaceutical industry sense—we need to get our heads around it.

I think we have agreement that what is intended by this bill is worth going forward with. The member for Gellibrand and others have outlined the provisos that the opposition have and these can be fully covered by a proper process in the Senate. That is not to say that the thing that is imagined in this package cannot be successful. I will try not to be too alarmist by saying that, if you have the starting point that Medicines Australia appear to have come up with this idea, we should jump to the conclusion that it is wrong—they have an important role to play.

Throughout the years of the Hawke and Keating governments there was a realisation by the Labor Party that, if we wanted the public to have access to these really important drugs, we had to have the pharmaceutical industry onside. And there has to be a balance between the impost on the consolidated revenue and the proper reward for these drug companies when they are moving forward. It seems simple when you say it that way, but these are multinational and transnational conglomerates who can get higher prices in overseas markets. We have been very successful in putting a lid on their prices and we are trying to screw them down even more, but at the same time we want them to continue. So, with those provisos, I support this legislation. (Time expired)

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