Health Policy Monitor
Skip Navigation

PBAC outcomes

Partner Institute: 
Centre for Health, Economics Research and Evaluation (CHERE), University of Technology, Sydney
Survey no: 
Marion Haas
Health Policy Issues: 
New Technology, Pharmaceutical Policy
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no


Since June 2003, the PBAC has published decisions not to recommend listing and deferrals. The objective of changing the policy is to open the decisions to greater public scrutiny.The policy change affects the pharmaceutical companies and (indirectly) any consulting groups or companies whom they employ, for example, to undertake economic modelling as part of a submission to the PBAC.It may also ultimately affect the PBAC as more companies may appeal decisions.

Purpose of health policy or idea

Since December 1999, the Pharmaceutical Benefits Advisory Committee (PBAC) has published its positive recommendations on its website, including the drug and form for which listing was requested, the type and proposed use of the drug and any reasons given for the proposed listing or request. Since June 2003, the PBAC has also published the following types of decisions:

  • first time decisions not to recommend listing
  • "subsequent" decisions not to recommend listing
  • deferrals

The objectives of changing the policy of publication are to put as much as possible of the material the PBAC considers and the reasons behind decisions in the public domain.

The policy change affects the pharmaceutical companies and (indirectly) any consulting groups or companies whom they employ to provide them with information (e.g. economic modelling) contained in any submission to the PBAC as the reasons for refusal or deferral are stated explicitly and publicly, thus potentially having an impact on their reputation. It may also ultimately affect the PBAC as, in explicitly and publicly addressing the reasons for not listing, they may be opening the way for more companies to appeal decisions.

Main points

Main objectives

The objectives of the change in policy are to make the material considered in decisions and the reasons behind the decisions available for public information and comment.

Type of incentives

The incentive for the PBAC is that making the information available would assist understanding of the decisions made and thus potentially reduce criticism of PBAC decision making as being not open to scrutiny and challenge.

Groups affected

pharmaceutical companies, PBAC, consumers

 Search help

Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal neutral fundamental
Public Visibility very low neutral very high
Transferability strongly system-dependent system-neutral system-neutral

In line with the innovative nature of the PBAC, publishing decisions to list or not list and the reasons behind such decisions are also relatively innovative. However, they have been made with the agreement of the consumer movement and the pharmaceutical industry, even though the former thinks that the move is a very limited one and the latter may be nervous of any expansion of the amount and/or type of information made available.

There is unlikely to be any broad systemic imoact due to the small and limited nature of this change. Public visibility has not been high. There is no reason why changes such as this could not be made by all health technology decision making bodies (eg NICE).

Political and economic background

The Pharmaceutical Benefits Advisory Committee (PBAC) is an independent statutory body established on 12 May 1954 under section 101 of the National Health Act 1953 to make recommendations and give advice to the Minister about which drugs and medicinal preparations should be made available as pharmaceutical benefits. No new drug may be made available as a pharmaceutical benefit unless the Committee has so recommended.

The Committee is required by the Act to consider the effectiveness and cost of a proposed benefit compared to alternative therapies. In making its recommendations the Committee, on the basis of community usage, recommends maximum quantities and repeats and may also recommend restrictions as to the indications where PBS subsidy is available. When recommending listings, the Committee provides advice to the Pharmaceutical Benefits Pricing Authority (PBPA) regarding comparison with alternatives or their cost effectiveness.

The Pharmaceutical Benefits Advisory Committee (PBAC) established the Economic Subcommittee (ESC) in December 1993 under section 101A of the National Health Act 1953 to review and interpret economic analyses of drugs submitted to the PBAC, advise the PBAC on these analyses and to advise the PBAC on technical aspects of requiring and using economic evaluations. The Pharmaceutical Benefits Advisory Committee (PBAC) established the Drug Utilisation subcommittee (DUSC) in 1988 under section 101A of the National Health Act 1953 to collect and analyse data on drug utilisation in Australia for use by the PBAC, make inter-country comparisons of drug utilisation statistics and to assist in generating information relating to rational use and prescribing of medicines. The DUSC secretariat is responsible for publishing the Australian Statistics on Medicines on an annual basis.

Recently, Australia and the USA have agreed on the terms of a Free Trade Agreement. One of the areas in which it is expected that the Agreement will have an impact is in relation to the Pharmaceutical Benefits Scheme. Under the terms of the agreement the following has been agreed:

  • Australia will make improvements to the transparency and timeliness of the PBS processes and provide more input for companies to have input to the processes
  • Australians will gain a better understanding of decisions about adding new medicines to the PBS
  • Acess to affordable medicines under the PBS will be maintained - the government has made a committment that the price of prescription medicines will not increase as a result of the Agreement.

Thus, this measure can be seen as part of the agreement to improve the transparency and timeliness of the PBS processes. It has also been suggested that one way in which the PBS will enable companies to have input to the processes will be to set up an appeal process. However, whether this will be independent of the PBS and the extent to which it will enable decisions of the PBAC to be reversed has not been clarified.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Origins of health policy idea

The PBAC has long considered it desirable to make as much of the material it uses in making its decisions and the reasons behind the decisions open to the public's view. The main purpose is to assist understanding of the decisions which are frequently based on information supplied by the pharmaceutical companies which is not available to either the wider medical community or the general public (including additional trial data, costing information and expert advice about the usefulness of the drug under evaluation).

One of the reasons this has not been done until now is that the companies were sensitive about information being made available which was "commercial in confidence". This included the information about the effectiveness and cost-effectiveness of the drug being evaluated (submitted by the company) and the analyses that the PBAC develops from these submissions.

Discussions between the PBAC and the pharmaceutical industry resulted in the decision being made to publish a list of decisions "not to list" including a limited amount of information about the reasons for the decision.

Initiators of idea/main actors

  • Government
  • Providers
  • Patients, Consumers: Consumer groups have criticised the PBAC for making decisions behind closed doors. They have also criticsed the amount of information available now as not
  • Scientific Community: The PBAC and the wider medical community are interested in having as much information as possible available for public scrutiny.
  • Private Sector or Industry: Have criticised decisions of the PBAC for not being open to scrutiny or challenge but for reasons of commercial interest are sensitive to what information is made available.

Stakeholder positions

All the actors involved in this policy change (the PBAC, the pharmaceutical industry and consumer advocates) support, in principle, greater transparency including publication of the decisions of the PBAC and the justification for these decisions. However, while the industry is nervous about what and how much information is made available, consumers have criticised the PBAC on the grounds that the information being provided about decisons not to list are too vague and do not provide consumers and members of the public with enough detail.

Actors and positions

Description of actors and their positions
Governmentvery supportivesupportive strongly opposed
Providersvery supportivesupportive strongly opposed
Patients, Consumers
Patients, Consumersvery supportivevery supportive strongly opposed
Scientific Community
Scientific Communityvery supportivevery supportive strongly opposed
Private Sector or Industry
Private Sectorvery supportivesupportive strongly opposed

Influences in policy making and legislation

not applicable

Actors and influence

Description of actors and their influence

Governmentvery strongneutral none
Providersvery strongneutral none
Patients, Consumers
Patients, Consumersvery strongneutral none
Scientific Community
Scientific Communityvery strongstrong none
Private Sector or Industry
Private Sectorvery strongstrong none
Patients, ConsumersScientific CommunityGovernment, ProvidersPrivate Sector

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The implementation of the policy change has taken place. In June 2003, 22 positive recomendations were made by the PBAC as well as 8 "first time" decisions not to recommend listing, 3 "subsequent" decisions not to recommend and 3 decisions to defer listing. In September 2003, 20 positive recomendations were made by the PBAC as well as 1 "first time" decision not to recommend listing and 3 "subsequent" decisions not to recommend.

The main reasons given by the PBAC for not recommending listing were:

  • problems or issues with claims regarding clinical or cost effectiveness
  • uncertainties regarding clinical or cost effectiveness
  • inadequate economic modelling
  • cost-effectiveness ratio too high or unfavourable cost-effectiveness ratio

In response, most pharmaceutical companies affected by the decision stated that they disagreed with the decision; however, some followed this with a statement about intending to clarify the decision with the PBAC, while others stated that they would need to consider their position. A stated decision to re-submit was made in relation to 3 decisions.

Monitoring and evaluation

The aim of the PBAC is to move to a position of even greater disclosure but it acknowledges that there is a substantial way to go before this occurs.

Consumer advocates consider that the disclosure now available is a very small step in the right direction - "the glass through which we viewed the PBAC and the processes of the PBS was entirely black, now it's very dark grey" (Goddard, 1/8/2003).

In the future, the pressure of consumer groups and the desire of the PBAC for greater disclosure will be pitted against the pharmaceutical companies' nervousness about commercially sensitive information being made public, which underpins their agreement with the government that information made available to the PBAC for the purposes of evaluation are confidential.

Expected outcome

The policy as it currently stands satisfies neither the objective of the PBAC nor the demands of consumers. However, it does go some way to making the decision making process of the PBAC more transparent and open to scrutiny.

It seem unlikely that it will have an impact on the costs of the PBS. It may have an impact on the way in which future submissions to the PBAC are made and on decisions of consumers and doctors regarding the use of drugs which are not listed - which in turn may have some impact on the quality of care delivered.

The provision of more information than has previously been made available has increased the equity of information but, given the limited information available, any improvement must be regarded as marginal.

Impact of this policy

Quality of Health Care Services marginal marginal fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low neutral very high

The changes may, in some instances lead to higher quality health services being delivered. For example, the information given may change consumers' and/or providers' decisions about requesting or prescribing drugs which may enhance the quality of care for individual patients.

Increased information about the decisions of the PBAC has the potential to increase equity, but, given the limited information currently being made available, any increase is likely to be marginal.

This change is unlikely to have any impact on efficiency as it has not changed the decisions of the PBS, hence no change has been made to either the costs of the PBS or the effectiveness of the drugs made available under this scheme.


Sources of Information

Pharmaceutical benefits Scheme Accessed 16/3/2004

Australia-United States Free Trade Agreement - Health. Accessed 1/4/2004

Wilson, A. personal communication. 7/4/2004

ABC online. PM- criticisms the PBAC website information too vague. Accessed 1/4/2004

Author/s and/or contributors to this survey

Marion Haas

Suggested citation for this online article

Marion Haas. "PBAC outcomes". Health Policy Monitor, April 2004. Available at