Australia has a comprehensive system for regulating prescription medicines that is designed to give us access to safe, effective and affordable medicines when we need them. Unfortunately, the complexity of the system means that few of us understand how it works. This article will endeavour to explain the processes involved in making new prescription medicines available to consumers. Please note that it does not explain the entire process.

Making new prescription medicines available to consumers involves two separate processes. One process decides which medicines can be sold in Australia. The other process decides which medicines will be listed on the Pharmaceutical Benefits Scheme.

Marketing approval process

All prescription medicines must be evaluated for safety, effectiveness and manufacturing quality before the company can sell them in Australia.

The body responsible for evaluating prescription medicines is the Therapeutic Goods Administration (TGA), which is part of the Department of Health and Ageing.

The TGA evaluates a medicine by weighing up the risks and benefits associated with its use. In doing so, it looks at the medicine’s strength, side effects, toxicity and likelihood of harm with prolonged use, as well as the seriousness of the medical condition for which it will be used.

This approach ensures that safety is a prime concern when evaluating medicines used for less serious and long-term conditions. It also allows more toxic but potentially life-saving medicines to be approved for use in serious conditions, such as cancer, if the benefits outweigh the risks.

When evaluating a medicine, the TGA uses information derived from studies of the medicine’s chemistry, studies of its effects on animals, and studies of its effects when used to treat people with the condition for which it will be used (clinical trials).

When the Therapeutic Goods Administration has completed its evaluation, it usually seeks the advice of an independent committee known as the Australian Drug Evaluation Committee (ADEC) before making a decision about its approval. Most of the committee’s members are eminent medical doctors but a few are experts in other fields such as toxicology.

If approved, the medicine is listed on the Australian Register of Therapeutic Goods. It can then be sold by the manufacturer for use by Australian health consumers. However, the price charged will be determined by the manufacturer.

PBS listing process

After a medicine has been approved for sale in Australia, the manufacturer can apply to have the medicine listed on the Pharmaceutical Benefits Scheme (PBS). Listing on the PBS usually makes the medicine available to consumers at a cheaper price, because the Government subsidises the amount consumers pay.

Making a prescription medicine available on the PBS involves two stages. First, deciding if the medicine should be listed on the Scheme. Second, setting the price the Government pays the company for it.

The Pharmaceutical Benefits Advisory Committee (PBAC) is the body responsible for recommending whether a prescription medicine should be listed on the Pharmaceutical Benefits Scheme. When evaluating an application, it considers the medicine’s cost, effectiveness and safety compared with the other treatments available for the condition for which the medicine is intended, including any non-drug treatments.

The Pharmaceutical Benefits Advisory Committee also recommends how much of the medicine should be available on a prescription and the number of repeat prescriptions allowable. It may also recommend that use of the medicine be restricted under the PBS if it feels such restrictions would enhance its safe and wise use, and ensure that it is used only for those people for whom its cost effectiveness (value for money) has been proven.

For example, the osteoporosis medicine alendronate is available under the PBS only if the person has had an X-ray that shows they have had a fracture caused by osteoporosis. This is because it has been shown to have greater benefits for people who have already had a fracture compared with those who have not.

If the Pharmaceutical Benefits Advisory Committee recommends that a prescription medicine be listed on the PBS, it forwards its advice to the Pharmaceutical Benefits Pricing Authority (PBPA). The Authority then evaluates all the relevant information and recommends the price it thinks the Government should negotiate with the company for the medicine.

Both sets of recommendations then go to the Minister for Health for a final decision. If listing is recommended and the Government can negotiate an agreed price with the company, the medicine is listed on the Pharmaceutical Benefits Scheme. It is then available to consumers for the price they normally pay for PBS prescriptions. (see box below).

Implications

Australia’s drug regulation system is recognised as being one of the best in the world. However, its comprehensiveness sometimes results in frustrations for consumers. In particular, the time needed to complete the evaluation processes can mean long waits for people wanting to use new medicines. In addition, not all medicines approved for sale end up being listed on the PBS, which makes them available only to consumers who can afford to pay the price charged by the company.