ACCESS TO PHARMACEUTICAL SERVICES

ACCESS TO PHARMACEUTICAL SERVICES Access to cost-effective medicines, including through the Pharmaceutical Benefits Scheme and related subsidies, and assistance for medication management through industry partnerships. Outcome Outcome Summary Outcome aims to provide reliable, timely and affordable access to cost-effective (value-for-money), sustainable and high quality pharmaceutical services and medicines. The department worked to achieve this outcome by managing initiatives under the programs outlined below. This chapter reports on the major activities undertaken by the department during the year, reporting against each of the key strategic directions and performance indicators published in the Outcome chapters of the 009-10 Health and Ageing Portfolio Budget Statements and 009-10 Health and Ageing Portfolio Additional Estimates Statements. It also includes a table summarising the estimated and actual expenditure for this outcome. Outcome was managed in 009-10 by the Pharmaceutical Benefits Division. Programs Administered under Outcome and 009-10 Objectives Program.1: Community Pharmacy and Pharmaceutical Awareness Optimise the effectiveness and value of the health system, and the Pharmaceutical Benefits Scheme (PBS) in particular, through funding for evidence-based professional pharmacy programs and services. Improve access to medicines through community pharmacies. Program.: Pharmaceuticals and Pharmaceutical Services Maintain a sustainable PBS that provides all eligible Australians with affordable access to cost-effective and high quality medicines. Program.3: Targeted Assistance Pharmaceuticals Provide targeted assistance to certain patients with life-threatening conditions by providing free access to life saving medicines. Program.4: Targeted Assistance Aids and Appliances Assist people with Epidermolysis Bullosa. Improve sustainability of the Stoma Appliance Scheme. Annual Report 009 10 101

.3 Part.3 Outcome Access to Pharmaceutical Services Major Achievements Successful completion of negotiations with the Pharmacy Guild of Australia for the Fifth Community Pharmacy Agreement and a Memorandum of Understanding with Medicines Australia. The pharmacy agreement will save taxpayers money, provide better pharmacy services for consumers, and maintain a viable community pharmacy network. By 30 June 010, price disclosure had been applied to 4 multi-brand medicines across 173 brands, resulting in price reductions of between 13 and 71 per cent. Implementation of the National Epidermolysis Bullosa Dressing Scheme (a rare genetic skin disease primarily affecting children), which provides subsidised access to clinically appropriate dressings. This scheme has reduced costs, increased quality of life and improved health outcomes for eligible people with Epidermolysis Bullosa and their families. Challenges The supply of Fabrazyme and Cerezyme under the Life Saving Drugs Program, used to treat Fabry and Gaucher diseases (life threatening diseases caused by enzyme deficiencies) was limited worldwide due to manufacturing issues. The department worked with industry, clinical advisory committees and treating doctors to manage Australian supply of these medicines. P rogram.1: Community Pharmacy and Pharmaceutical Awareness Program.1 aims to optimise the effectiveness and value of the health system, and the PBS in particular, through funding for evidence-based professional pharmacy programs and services, and improved access to medicines through community pharmacies. Key Strategic Directions for 009-10 The department s strategies to achieve this aim were to: support timely access to medicines and professional pharmacy services for all Australians through the implementation of the Fourth Community Pharmacy Agreement; and support quality use of medicines through education initiatives for consumers and health professionals. Major Activities Fourth Community Pharmacy Agreement The Fourth Community Pharmacy Agreement between the Australian Government and the Pharmacy Guild of Australia ensured that the community received the PBS medicines they needed at affordable prices and in a timely manner. In 009-10, the department worked with the Professional Programs and Services Advisory Committee to manage programs assisting patients to better manage their medicines, supporting rural and remote pharmacies to service their local community and a range of other areas. During 009-10, the department evaluated 19 of the programs, the results of which will be used in the next 1 months to develop new programs and improve existing ones. In addition, the governance arrangements that will be introduced under the Fifth Community Pharmacy Agreement will simplify the program development process to ensure timely implementation. 10 Department of Health and Ageing

On 3 May 010, the Fifth Community Pharmacy Agreement was signed by the Australian Government and the Pharmacy Guild of Australia. The five-year agreement commenced on 1 July 010 and recognises the key role played by community pharmacies in primary health care through the delivery of PBS medicines and related services. The agreement will provide $15.4 billion in remuneration to about 5,000 community pharmacies to dispense PBS medicines, provide pharmacy programs and services, and to support the Community Services Obligation arrangements with pharmaceutical wholesalers. The agreement will result in a gross saving of $1 billion over five years. Quality Use of Medicines Since its commencement in November 008, the Quality Use of Medicines Maximised for Aboriginal and Torres Strait Islander Peoples Pilot Program has delivered improved access to PBS medicines for more than 30,000 patients of urban and rural Aboriginal Community Controlled Health Services. In 009-10, more than 0,000 clients were assisted through the pilot program. This included more than 190,000 PBS patient co-payments, more than 50,000 dose administration aids to patients to assist in managing medicines, and the allocation of medication aids and assistance packages totalling 75,000. The success of the pilot will see the program continue into 010-11, with amendments to take into account the new COAG Indigenous Chronic Disease Package Closing the Gap PBS Co-payment Measure. The department finalised arrangements for the PBS Co-payment Measure commencing 1 July 010. The measure has been introduced to overcome the financial barriers some Aboriginal and Torres Strait Islander people experience in accessing PBS medicines for chronic disease. It is one of 14 components of the Closing the Gap Indigenous Chronic Disease Package which aims to tackle chronic disease risk factors, improve chronic disease management in primary care and follow up treatment, and increase the capacity of the primary care workforce to deliver effective healthcare to Aboriginal and Torres Strait Islander peoples. Through the package s evaluation framework for 010-11, the department will monitor the performance of the measure in improving access to necessary PBS medicines. Improved Use of Medicines through Awareness The department has continued its commitment to quality use of medicines through enhancements to the National Prescribing Service. Through increased funding, the service has expanded the reach of its education programs for health professionals. Increased participation of general practitioners and specialists in activities such as case studies and clinical audits aims to reduce inappropriate prescribing and result in savings in PBS expenditure and safer use of medicines by patients. In 009-10, the number of health professionals participating in National Prescribing Service education programs increased from 1,699 participants in 008-09 to 1,77 participants in 009-10. The department also provided additional funding in 009-10 for the National Return of Unwanted Medicines program so that consumers can return their unwanted and expired medicines through community pharmacies across Australia. This program helps minimise the risk of medication misadventure, including accidental childhood poisoning and errors in medicine use by older Australians. Disposal occurs in an environmentally friendly manner, minimising landfill and water contamination. In October 009, the Minister for Health and Ageing approved the five key National Medicines Policy priorities, which are currently being implemented by the National Medicines Policy Committee. The priorities are: integrating the medicines policy framework into health system reform; informed and active consumers; incorporating evidence into practice and policy; monitoring medicines in use; and informing the research agenda. Sustainability and cost-effectiveness will be a theme across these priority areas. These priorities benefit the community through a better understanding of medicine benefits and harms, better targeting of medicines, and avoidance of preventable wastage or inappropriate prescribing..3 Part.3 Outcome Access to Pharmaceutical Services Annual Report 009 10 103

.3 Figure.1.1: Number of Pharmacies and Average Number of People per Pharmacy, by State and Urban-Rural Part.3 Outcome Access to Pharmaceutical Services Average Number of People per Pharmacy 10000 9000 8000 7000 6000 5000 4000 3000 000 1000 0 Source: Medicare Australia pharmacy approval data 30 June 010; Census 006; PhARIA 008-09* Other locations Christmas Island, Cocos (Keeling) Islands and Jervis Bay Performance Information for Outcome Program.1: Deliverables Qualitative Deliverables Fourth Community Pharmacy Agreement Qualitative Deliverable: People per Pharmacy Urban People per Pharmacy Rural Urban Pharmacies Rural Pharmacies NSW VIC QLD SA WA TAS NT ACT OTHER* State and Territory Regular stakeholder participation in program development and implementation: Programs under the Fourth Agreement are overseen by the Professional Programs and Services Advisory Committee and its steering committees. Membership includes pharmacists, pharmacy owners, consumers, Indigenous organisations, relevant peak bodies and academics. 1600 1400 100 1000 800 600 400 00 0 Number of Pharmacies Consultation with stakeholders through their representation on the Professional Programs and Services Advisory Committee and its steering committees has been a regular part of program development and management under the Fourth Community Pharmacy Agreement. In 009-10, the committee oversaw the implementation of three new programs, including the Hepatitis C Public Health Promotion Pilot Program. In addition to representation from peak stakeholder groups through the Hepatitis C Steering Committee, implementation of the program included engagement with the Australian Society for HIV Medicine, the Australian Injecting and Illicit Drug Users League and the Australian Hepatitis Council. Consultation with stakeholders was also undertaken in 009-10 on programs that had been established in prior years. For example, consumers, general practitioners and hospital pharmacists were approached on ways to improve the effectiveness of the Home Medicines Review Program, including targeting the reviews to patients who would benefit most. The Fifth Community Pharmacy Agreement broadens opportunities for stakeholder participation in program development through the Programs Reference Group, which will include representatives from peak stakeholder groups. Improved Use of Medicines through Awareness Qualitative Deliverable: Regular stakeholder participation in program development and implementation: Enhancements to the National Prescribing Service program recognise input from the service s 45 member organisations and information gathered through stakeholder workshops. Stakeholder participation is integral to the work of the National Prescribing Service. The service s 45 member organisations include doctors, pharmacists and other health professionals and consumers, and contribute to the development and delivery of the service s strategies and programs. The service consulted members and stakeholders through its annual Members Planning Days, stakeholder reference groups, regular communications and surveys. 104 Department of Health and Ageing

Quantitative Deliverables Quantitative Deliverable: Percentage of variance between actual and budgeted expenses. 009-10 Target: 0.5% 009-10 Actual: 4.3% Result: Deliverable not met..3 Several large demand driven activities are administered under Program.1, some of which have parameters that change throughout the year. Fourth Community Pharmacy Agreement Quantitative Deliverable: Proportion of community pharmacies participating in programs to assist patients in managing their medicines. 009-10 Target: 60% 009-10 Actual: 70% Pharmacy participation in programs that assisted patients in managing their medicines was higher in 009-10. For example, more than 70 per cent (3,676) of eligible community pharmacies registered to participate in phase two of the Dose Administrations Aids program, which was a significant increase from the 50 per cent (,460) of eligible community pharmacies that completed phase one. The increased participation rate indicates that more patients could access a service to help them to better manage their medications and therefore reduces the risk of a medicine related adverse event occurring. In addition, the number of providers registered to participate in the Home Medicines Review Program (community pharmacies) at June 010 was 4,36 (around 83 per cent of community pharmacies). This means that patients have good access to medicine review services should they be identified by their general practitioner as being in need of a review. Quantitative Deliverable: Number of pharmacists accredited to provide medication reviews. 009-10 Target: 1,790 009-10 Actual: 1,900 As at June 010, more than 1,900 pharmacists were accredited to undertake medication reviews. Improved Use of Medicines through Awareness Part.3 Outcome Access to Pharmaceutical Services Quantitative Deliverable: Number of therapeutic topics in NPS News provided to doctors and pharmacists. 009-10 Target: 5 009-10 Actual: 6 The National Prescribing Service has provided independent, evidence-based information on therapeutic topics through publication of the NPS News, which is supplied to doctors and pharmacists. This year s topics of focus were: antidepressant use, hypnotic drugs, smoking cessation, treatments in menopause, the use of analgesics and urinary incontinence. Annual Report 009 10 105

.3 Program.1: Key Performance Indicators Qualitative Key Performance Indicators Part.3 Outcome Access to Pharmaceutical Services Fourth Community Pharmacy Agreement Qualitative Indicator: The impact of the Fourth Agreement will be measured by the services provided by community pharmacies, the extent to which they improve access to quality community pharmacy services, and the extent of community pharmacy participation in new programs. Each new program under the Fourth Agreement is being conducted as a trial to determine how the services should be provided to meet the needs of patients and which patients will most benefit from the service. This information is being obtained from comprehensive evaluations of the programs, which will be completed in 009-10. The department implemented three new programs in 009-10. The Pandemic Influenza Preparedness Program assisted up to,500 community pharmacies in the development of a business continuity plan to help them maintain services to the community during a pandemic. The program provided education and training in basic infection control measures and the use of personal protective equipment to enable pharmacy staff to stay at work during a pandemic. The Practice Change Program also began in 009-10. The program encouraged community pharmacies to embed programs and services under the Fourth Community Pharmacy Agreement as part of their core business. More than,000 pharmacies enrolled. This program is also likely to result in improved uptake of the programs to be delivered under the Fifth Community Pharmacy Agreement. In 009-10, the department evaluated 19 Fourth Community Pharmacy Agreement programs. The results of these evaluations will inform the development of new programs under the Fifth Community Pharmacy Agreement as well as improve existing programs. Qualitative Indicator: Several broader reviews being conducted under the Fourth Agreement are investigating issues impacting on community pharmacy. The reviews will be completed in 009-10. The department completed five strategic policy reviews examining complex issues significantly impacting on community pharmacy as required under the Fourth Agreement, including the review into the staged supply of PBS medicines by a pharmacy when requested by a prescriber to do so for patients who are unable to manage the full quantity of their medications safely. All reviews agreed with the Pharmacy Guild of Australia were completed during the term of the Fourth Community Pharmacy Agreement. The findings of many of these reviews relate primarily to improving current systems, reducing the administrative burden on pharmacies in providing specific services, and providing funding for the provision of the service to support better health outcomes for patients. Several new programs under the Fifth Agreement address the findings of the reviews, including the introduction of the Staged Supply Allowance for pharmacies that comply with a set of quality standards in the provision of this service. 106 Department of Health and Ageing

Quantitative Key Performance Indicators Fourth Community Pharmacy Agreement Quantitative Indicator: Number of evaluations of new and continuing programs completed. 009-10 Target: 11 009-10 Actual: 13.3 The department completed 13 evaluations covering 19 Fourth Community Pharmacy Agreement programs. Preliminary findings were considered during the development of the Fifth Community Pharmacy Agreement. Findings will inform the operating arrangements for continuing programs and the development of new Fifth Community Pharmacy Agreement programs. Quantitative Indicator: Number of reviews of issues impacting on community pharmacy completed. 009-10 Target: 4 009-10 Actual: 5 The department completed five reviews of complex issues impacting on community pharmacy during 009-10. All reviews agreed with the Pharmacy Guild of Australia were completed during the term of the Fourth Community Pharmacy Agreement. Quantitative Indicator: Proportion of urban and regional Aboriginal Community Controlled Health Organisations participating in the Quality Use of Medicines Maximised for Aboriginal and Torres Strait Islander Peoples program. 009-10 Target: 94% 009-10 Actual: 98% Ninety-eight per cent of urban and regional Aboriginal Community Controlled Health Organisations participated in the Quality Use of Medicines Maximised for Aboriginal and Torres Strait Islander Peoples program. This compares with 94 per cent in 008-09. Improved Use of Medicines Through Awareness Quantitative Indicator: Number of general doctors participating in education initiatives. Part.3 Outcome Access to Pharmaceutical Services 009-10 Target: 1,500 009-10 Actual: 1,77 A major focus of the National Prescribing Service is providing educational activities to health professionals. In 009-10, 1,77 general practitioners participated in at least one education initiative, in comparison to the 1,699 participants in 008-09. Annual Report 009 10 107

.3 Part.3 Outcome Access to Pharmaceutical Services Program.: Pharmaceuticals and Pharmaceutical Services Program. aims to maintain a sustainable PBS that provides affordable access to cost-effective and high quality medicines. Key Strategic Directions for 009-10 The department s strategies to achieve this aim were to: gain better value from competition between brands of medicines listed on the PBS; and improve access for the community to a range of pharmaceutical benefits when prescribed by appropriately trained and certified nurse practitioners and midwives. Major Activities Pharmaceutical Benefits Scheme The PBS aims to provide Australians with timely access to a wide range of affordable and cost-effective medicines. In 009-10, the PBS subsidised more than 750 medicines available in more than 1,800 forms and marketed as more than 3,600 differently branded items. The Government and Medicines Australia signed a Memorandum of Understanding on 6 May 010. The memorandum brings forward further PBS medicine pricing reforms, reduces red tape and improves the process for medicines to be subsidised through the PBS. The memorandum also provides for a period of stable pricing policy for all suppliers in the market for the next four years. Medicine Price Reductions Throughout 009-10, the department continued the PBS Reforms announced in 007. On 1 August 009, the second of three annual two per cent price reductions was applied to medicines with multi-brand competition and medicines contained in the Formulary A (FA). In addition, on 1 December 009, the first price reductions as a result of the introduction of price disclosure for medicines in FA occurred. By 30 June 010, price disclosure had been applied to 4 medicines across 173 brands, with price reductions of between 13 per cent and 71 per cent achieved. These price reductions will contribute to the sustainability of the PBS by ensuring that the Government and Australian taxpayers get value for money for medicines supplied under the PBS. In some cases, these price reductions may also result in direct savings to patients. For example, as a result of price disclosure, the price of 500mg of Vancomycin was reduced from $45.80 (co-pay $33.30) to $17.96 on 1 April 010. This represented a saving for general patients of $15.34. On 1 September 009, based on the advice of the Pharmaceutical Benefits Advisory Committee, the department implemented a new therapeutic group consisting of two lipid lowering (cholesterol) medicines (atorvastatin and rosuvastatin). The formation of this therapeutic group means the medicines prices were referenced to each other. The price paid for rosuvastatin was reduced to match atorvastatin s price on 1 April 010. The amount patients pay for these medicines did not change from the 010 co-payment amounts of $33.30 (general) and $5.40 (concessional), however taxpayers will benefit from better value for money for these medicines. From 1 December 009, PBS Reference Pricing Policies were applied to all non-exempt items on the PBS. The Reference Pricing Policies price items in a therapeutic group according to the same method, ensuring that all companies with medicines in a therapeutic group can compete fairly. In 009, the Pharmaceutical Benefits Advisory Committee completed a cost-effectiveness review of biological disease-modifying antirheumatic drugs listed on the PBS for the treatment of rheumatoid arthritis. The review was conducted in consultation with the sponsors of the drugs and the Australian Rheumatology Association. The committee recommended changes to the restrictions and a price reduction to ensure that these medicines are cost-effective. The department commenced implementation of these recommendations on 1 August 010. 108 Department of Health and Ageing

Cost recovery arrangements for the listing of new medicines or vaccines, or to vary the listing of existing products, were introduced from 1 January 010. Revenue from 1 January to 30 June 010 was estimated to be $4.6 million, however interim figures indicate that the actual revenue received was only $1.413 million. Applying for a listing is a commercial decision of the product sponsor. As such, revenue projections were based on historical information and projections provided by industry of the likely number and type of submissions. A number of submissions expected to be lodged in March 010 were lodged in late December 009 before the commencement of the cost recovery arrangements. In addition, the number of applications seeking exemption or waiver from fees was higher than originally projected. Three therapeutic groups, formed in January 010, were disallowed by the Senate in March 010, and were rescinded at that time. Under current legislation, a decision to reform the three groups cannot be made until September 010. The groups were: venlafaxine group (used for the treatment of depression), oral bisphosphonates Paget disease group (used for the treatment of Paget disease of bone), and oral bisphosphonates osteoporosis group (used for the treatment of osteoporosis). Nurse Practitioners and Midwives On 1 November 010, the Australian Government will extend PBS prescribing to authorised midwives and nurse practitioners. This will improve access to PBS medicines for consumers and increase the efficiency of the health workforce. Midwives and nurse practitioners will play an important role in responding to increasing demand for health services. In September and October 009, the department established two technical advisory groups to provide advice on which PBS medicines should be subsidised when prescribed by authorised midwives and nurse practitioners. These technical advisory groups comprised midwifery, nursing, medical, pharmaceutical and consumer Pharmaceutical Benefits Advisory Committee Medicines are listed on the PBS on the advice of the independent, expert advisory body known as the Pharmaceutical Benefits Advisory Committee (PBAC), comprised of doctors, other health professionals and a consumer representative. The committee considers applications from companies (sponsors) for PBS listing having regard to the clinical effectiveness and cost-effectiveness of medicines, in comparison with other available treatments. The committee is committed to using sound evidence-based principles to decide which products should be subsidised through the PBS and under what circumstances. The same requirements for listing medicines on the PBS are applied in all cases to ensure consistency and fairness in the listing process. A full report of the processes leading to PBAC consideration in 009-10 can be found at Appendix in this Annual Report. representatives. The advice received by the department was provided to the Pharmaceutical Benefits Advisory Committee in March and April 010 for consideration in making its recommendations to the Minister for Health and Ageing. The PBS listings approved for each prescriber group will be incorporated into the Schedule of Pharmaceutical Benefits effective from 1 November 010..3 Part.3 Outcome Access to Pharmaceutical Services Annual Report 009 10 109

.3 Performance Information for Outcome Program.: Deliverables Qualitative Deliverables Part.3 Outcome Access to Pharmaceutical Services Qualitative Deliverable: 1 Regular stakeholder participation in program development: The Department of Health and Ageing and the Pharmaceutical Benefits Advisory Committee have undertaken regular and structured meetings to facilitate ongoing dialogue and consultation with industry, consumers, professional associations and other stakeholders. The Pharmaceutical Benefits Advisory Committee agenda is now made publicly available six weeks before each meeting. The public is encouraged to make comments on the medicines before being considered for subsidy especially in relation to living with the condition that the medicine treats. The Access to Medicines Working Group will continue to liaise with the Pharmaceutical Benefits Advisory Committee to evaluate the benefits of this initiative. The National Medicines Policy advisory structure provides an opportunity for all National Medicines Policy partners, including the chairs of related organisations/ committees, Australian Government representatives, individual experts and stakeholder groups to contribute to implementation of Australia s National Medicines Policy. Regular meetings, both formal (such as the Access to Medicines Working Group and the Pharmaceutical Industry Working Group) and informal, have provided industry with an opportunity to engage in open and ongoing dialogue about medicines and industry issues, such as the uptake of generic medicines. In 009-10, the Access to Medicines Working Group undertook pilots for the early and extended evaluation of complex Pharmaceutical Benefits Advisory Committee submissions, and for enhanced pre-pharmaceutical Benefits Advisory Committee submission meetings. The Access to Medicines Working Group also worked to provide greater clarity and transparency about the evidence expected of pharmaceutical companies by the Pharmaceutical Benefits Advisory Committee and continued to evaluate the impact of the Pharmaceutical Benefits Advisory Committee guidelines. An evaluation of the generic consumer medicines campaign was also concluded in July 009. The report found that the campaign had delivered a five per cent increase (7-77 per cent) in the number of consumers who felt confident in using generics and that 89 per cent of media coverage was favourable towards generic medicines. Based on this, a further $10 million will be provided to the National Prescribing Service to conduct another campaign in 010-11. A formal assessment of the benefits of consumer input to the Pharmaceutical Benefits Advisory Committee process will be undertaken by the Access to Medicines Working Group in 010-11. However, discussions held with peak health consumer organisations indicate that there may be a general lack of understanding of the committee s approval process, the type of information consumers could provide and the impact of consumer input on the consideration process. Consequently, a project to prepare answers to Frequently Asked Questions based on consumer inquiries has begun. The project will also focus on the type of information consumers can provide to the committee, ways in which consumers can provide input, and how the committee will use this information. A consultation process to finalise this information for publication on the consumer sub-site of the PBS website <www.pbs.gov.au> will begin shortly. The consumer sub-site has been redesigned to prominently feature links to the committee agenda and the consumer input form. Consumer education sessions will be provided to further promote this initiative. Regular reports are being provided to the Access to Medicines Working Group on these developments. 1 Deliverable changed from 009-10 Portfolio Budget Statements for factual accuracy. 110 Department of Health and Ageing

Qualitative Deliverable: New listings on the PBS must be clinically effective and cost-effective. In 008-09, the Pharmaceutical Benefits Advisory Committee considered 13 submissions, of which 78 were major submissions requiring cost-effectiveness analysis, and 135 were minor submissions which did not require a cost-effectiveness analysis..3 The Pharmaceutical Benefits Advisory Committee, when considering the listing of a new medicine on the PBS, must take into account the requirements of the National Health Act 1953, that the treatment be clinically effective, and cost-effective. Medicines considered in minor submissions are considered on a cost minimisation basis against existing PBS listed medicines. In 009-10, the Pharmaceutical Benefits Advisory Committee considered 16 submissions, of which 73 were major submissions requiring cost-effectiveness analysis, and 143 were minor submissions which did not require a cost-effectiveness analysis. Qualitative Deliverable: After a positive recommendation by the Pharmaceutical Benefits Advisory Committee, listing a medicine occurs after completion of other processes including price negotiations with the sponsor, finalisation of the conditions for listing, quality and availability checks and consideration by the Australian Government. In 009-10, 119 new medicines were listed on the PBS after consideration by the Pharmaceutical Benefits Advisory Committee against appropriate criteria such as quality, availability and price. Quantitative Deliverables Quantitative Deliverable: Percentage of variance between actual and budgeted expenses. 009-10 Target: 0.5% 009-10 Actual: -1.7% Result: Deliverable not met. Several large demand driven activities are administered under Program., some of which have parameters that change throughout the year. Pharmaceuticals Benefits Scheme Part.3 Outcome Access to Pharmaceutical Services Quantitative Deliverable: Percentage of submissions in the PBAC for PBS listings that are considered within 17 weeks of lodgement. 009-10 Target: 100% 009-10 Actual: 100% In 009-10, all submissions lodged with the secretariat of the Pharmaceutical Benefits Advisory Committee, on or before the advertised cut-off date, were considered by the committee at its next scheduled meeting, within 17 weeks of lodgement. Annual Report 009 10 111

.3 Program.: Key Performance Indicators Qualitative Key Performance Indicators Qualitative Indicator: Achieve better value from medicines that are subject to price competition by applying statutory price reductions to medicines in Formulary by 1 August 009. Part.3 Outcome Access to Pharmaceutical Services Under PBS Reform, implemented on 1 August 007, more than 1,100 brands of medicines in Formulary A had their reimbursed price to pharmacist reduced by two per cent on 1 August 009. These price reductions provide Australians with continued access to new and high cost medicines, while ensuring the PBS remains affordable into the future. Qualitative Indicator: Achieve better consumer participation in the consideration of PBAC submissions. Seventy-eight submissions were received from consumers for medicines considered at the November 008 PBAC meeting. Fifty-eight submissions were received from consumers for medicines considered at the March 009 PBAC meeting. The number of submissions received from consumers is expected to fluctuate according to the number of submissions being considered by the PBAC and the actual medicine being considered. In 009-10, there were 187 consumer submissions on matters before the Pharmaceutical Benefits Advisory Committee, which was higher than the 136 received in 008-09. Consumer submissions on medicines under consideration by the Pharmaceutical Benefits Advisory Committee, are provided to the medicine s sponsor and are taken into account by the committee in its decision making process. In addition, the Consumer Health Forum, at the request of the Pharmaceutical Benefits Advisory Committee, also prepares consumer health impact statements. This information is used to assist the committee and sponsors understand the effect the availability of medicines has on patients. In 009-10, the Consumer Health Forum prepared a consumer health impact statement on intermittent claudication, a condition caused by peripheral arterial disease. During the year, the department also organised a half-day session with peak consumer groups to map out strategies to facilitate greater consumer engagement. As a first step, the department is developing Frequently Asked Questions for publication on the consumer sub-site of the Pharmaceutical Benefits Scheme website and is redesigning the consumer pages to give greater access. Quantitative Key Performance Indicator Pharmaceutical Benefits Scheme Quantitative Indicator: The proportion of prescriptions listed on the Schedule of Pharmaceutical Benefits subsidised on the Pharmaceutical Benefits Scheme. 009-10 Target: 80% 009-10 Actual: 80% The estimate for the proportion of subsidised prescriptions listed on the Schedule of Pharmaceutical Benefits was 80 per cent for the period 1 July 009 to 30 March 010. The remaining 0 per cent of prescriptions were priced at or under the co-payment level (currently $33.30) and dispensed to general, non-safety net patients. 3 Accessible at <www.pbs.gov.au>. 3 Information on the number of non-subsidised prescriptions supplied, that is, those under the patient co-payment amount, is generally not available. Information from a sample of pharmacies is only available after the end of a reporting period. This is due to the nature of the survey used as a source of data, and the length of time pharmacies take to submit prescriptions. The latest prescription supply data available for 009-10 reporting year is to end of March 010. 11 Department of Health and Ageing

Program.3: Targeted Assistance Pharmaceuticals Program.3 aims to provide targeted assistance to certain patients with life-threatening conditions by providing free access to life saving medicines. Key Strategic Direction for 009-10 The department s strategy to achieve this aim was to: improve access to new and existing medicines to patients with life-threatening conditions. Major Activities Access to New and Existing Medicines Life Saving Drugs Program The Life Saving Drugs Program provides subsidised access, for eligible patients, to expensive and potentially life saving drugs for very rare life-threatening conditions. In 009-10, eight drugs were funded through the program for the treatment of 159 patients with six separate disorders due to inherited enzyme deficiencies, including: imiglucerase (Cerezyme ) and miglustat (Zavesca ) to treat Gaucher disease; agalsidase alfa (Replagal ) and beta (Fabrazyme ) for Fabry disease; laronidase (Aldurazyme ) for Mucopolysaccharidosis (MPS) Type I; idursulfase (Elaprase ) for MPS Type II; galsulfase (Naglazyme ) for MPS Type VI; and alglucosidase alfa (Myozyme ) for infantile-onset Pompe disease. The department also actioned a number of the Government s decisions from the 009 review of the Life Saving Drugs Program to improve the administrative processes of the program to assist doctors, patients and pharmacists. This included revising the funding criteria and conditions for the program, which took effect on 10 May 010. Since July 009, there has been a worldwide shortage of Fabrazyme and Cerezyme due to manufacturing issues. This has reduced the availability of these drugs through the program. The department worked with its clinical advisory committees, doctors and industry to manage the drug supply shortage and to minimise the impact on patients. This approach ensured that all eligible patients have continued to receive treatment. Herceptin Program The Herceptin Program, established in 001, provides treatment, free of charge, to eligible patients with Human Epidermal Growth Factor Receptor (HER) positive late stage metastatic breast cancer. In the 009-10 Budget, the Government announced the extension of the Herceptin Program for a further four years with no changes to the current eligibility criteria. This extension enables continued access for people with HER positive late stage metastatic breast cancer. At 30 June 010, 1,093 patients were receiving treatment with Herceptin through the program. Since the program commenced, 3,935 patients have been assisted. The Herceptin Program is not part of the Pharmaceutical Benefits Scheme and is administered by Medicare Australia. Applications for treatment are submitted by the patient s specialist medical practitioner and assessed for eligibility against the criteria by Medicare Australia. The presence of metastatic disease, demonstrated by pathology and/or diagnostic imaging reports, must be provided with the initial application for treatment..3 Part.3 Outcome Access to Pharmaceutical Services Annual Report 009 10 113

.3 Performance Information for Outcome Program.3: Deliverables Qualitative Deliverable Part.3 Outcome Access to Pharmaceutical Services Access to New and Existing Medicines Qualitative Deliverable: More efficient and streamlined processes are used in the administration of the Life Saving Drugs Program. The department introduced streamlined ordering and stock allocation processes to improve efficiency in the Life Saving Drugs Program. The department also developed clear requirements to monitor patients responses to therapy and to measure patients against the drug continuation criteria and disseminated revised program funding criteria and conditions. The department also developed new patient and doctor consent forms, for treatment under the program, and audited existing consent forms. Quantitative Deliverables Quantitative Deliverable: Percentage of variance between actual and budgeted expenses. 009-10 Target: 0.5% 009-10 Actual: 4.4% Result: Deliverable not met. Several large demand driven activities are administered under Program.3, some of which have parameters that change throughout the year. Access to New and Existing Medicines Quantitative Deliverable: Approximate number of patients assisted through the Life Saving Drugs Program. 009-10 Target: 173 009-10 Actual: 159 Result: Deliverable substantially met. The department provided assistance to 159 patients through the Life Saving Drugs Program. All eligible patients that met the criteria for access to the program were assisted in 009-10. The lower than forecast number is a result of this being a demand-driven program. Several large demand driven activities are administered under Program.3, some of which have parameters that change throughout the year. Quantitative Deliverable: Number of patients assisted through the Herceptin Program. 009-10 Target: 1,000 009-10 Actual: 1,093 During 009 10, 449 new patients accessed the Herceptin program. At 30 June 010, 1,093 patients were active on the Herceptin program, compared with 1,05 patients at 30 June 009. Active patients are those patients currently receiving treatment on the program. 114 Department of Health and Ageing

Program.3: Key Performance Indicators Qualitative Key Performance Indicators.3 Access to New and Existing Medicines Qualitative Indicator: The establishment, collection and monitoring of performance data under the Life Saving Drugs Program. The department collected data through a combination of international data registries, internal records, and through liaison and collaboration with treating doctors. Data collected was used by the clinical advisory committees to monitor patient response to treatment under the program. Qualitative Indicator: Evaluations and reviews of Program.3: Targeted Assistance Pharmaceuticals. In 009, a review of the Life Saving Drugs Program was completed. As a result of the review, the Government made a number of decisions on how the program should continue to operate. In 009-10, the department consulted with stakeholders on the outcomes of the review and the Government s decisions. The department has begun implementing these decisions, including revising the funding criteria and patient conditions for the Life Saving Drugs Program, and commissioning a review by the Pharmaceutical Benefits Advisory Committee of the available international evidence of the relative clinical efficacy of Fabrazyme and Replagal. Quantitative Key Performance Indicator Access to New and Existing Medicines Quantitative Indicator: Eligible patients with access to fully subsidised medicines under the Life Saving Drugs Program. 009-10 Target: 100% 009-10 Actual: 100% The department provided fully subsidised medicines to eligible patients. However, due to shortages of Fabrazyme and Cerezyme, the dose for some patients was reduced. This was managed in consultation with relevant clinical advisory committees and the doctors of affected patients. Part.3 Outcome Access to Pharmaceutical Services Trend data cannot be provided for this indicator as it was new in 009-10. Annual Report 009 10 115

.3 Part.3 Outcome Access to Pharmaceutical Services Program.4: Targeted Assistance Aids and Appliances Program.4 aims to assist people with Epidermolysis Bullosa and improve sustainability of the Stoma Appliance Scheme. Key Strategic Directions for 009-10 The department s strategies to achieve these aims were to: improve access to necessary and clinically appropriate dressings, and improve the quality of life for people with Epidermolysis Bullosa; and continue to assist people with a stoma to manage their condition by providing free stoma related products. Major Activities Epidermolysis Bullosa Dressing Scheme In 009-10, the department improved access to clinically appropriate dressings through the establishment of the National Epidermolysis Bullosa Dressing Scheme. This scheme improves the quality of life for people with Epidermolysis Bullosa by providing subsidised access to necessary bandages and dressings for eligible patients. Stoma Appliance Scheme During 009-10, the department continued to administer the Stoma Appliance Scheme, which assists people with a stoma to better manage their condition, by providing free access to more than 440 different stoma related products such as pouches, skin protectors, hernia support belts and garments, and creams. The department also managed the quarterly release of the Stoma Appliance Scheme Schedule, which lists the products available under the scheme and conducted one meeting of the Stoma Product Assessment Panel. This panel provides advice to the department concerning the appropriate listing of products on the scheme s schedule. Performance Information for Outcome Program.4: Deliverables Qualitative Deliverable Stoma Appliance Scheme Qualitative Deliverable: Through the review of products on the Stoma Appliance Scheme in 009-10, increased downward pricing pressure on the scheme will lead to a more efficient and cost-effective program. The department engaged an independent consultant to review products on the scheme. The department commenced consideration of the final report in June 010. The report outlines ways in which the scheme s sustainability could be improved. The department also made a number of administrative changes during 009-10, including clarifying eligibility requirements to improve the scheme s efficiency. 116 Department of Health and Ageing

Quantitative Deliverables Quantitative Deliverable: Percentage of variance between actual and budgeted expenses. 009-10 Target: 0.5% 009-10 Actual: -1.3% Result: Deliverable not met..3 Several large demand driven activities are administered under Program.4, some of which have parameters that change throughout the year. Quantitative Deliverable: Average amount of Australian Government expenditure on Epidermolysis Bullosa dressings per patient who accesses the program (funding commenced January 010). 009-10 Target: $14,000 (6 months) 009-10 Actual: $19,70 (6 months) Result: Deliverable substantially met. The department provided assistance to all eligible people under the National Epidermolysis Bullosa Dressing Scheme. The average expenditure per person for the last six months of 009-10 was $19,70. The average cost of treating patients was higher than anticipated. Different patients have different levels of severity requiring different volumes and types of dressings. Levels of funding to the patient are not capped as this is a demand driven treatment to ensure patients have the best health outcome. The department receives a quarterly report that monitors dressing volumes and expenditure. Program.4: Key Performance Indicators Quantitative Key Performance Indicators Epidermolysis Bullosa Dressing Scheme Quantitative Indicator: Approximate number of persons with Epidermolysis Bullosa benefiting from access to subsidised dressings through the dressing scheme. 009-10 Target: 98 009-10 Actual: 43 Result: Indicator substantially met. Part.3 Outcome Access to Pharmaceutical Services In 009-10, 43 people were being assisted under the National Epidermolysis Bullosa Dressing Scheme. While this number is less than anticipated, the number of new applications is increasing and participation is expected to improve as awareness of the program increases. A review of the program will be conducted 18 months after implementation of the program. Trend data is not available for this indicator as the Epidermolysis Bullosa program commenced in 009-10. Stoma Appliance Scheme Quantitative Indicator: Approximate number of people who receive stoma-related products. 009-10 Target: 37,750 009-10 Actual: 37,808 The Stoma Appliance Scheme is a demand driven program and the number of people assisted can vary throughout the year. Trend data is not available for this indicator as it was new in 009-10. Annual Report 009 10 117

.3 Part.3 Outcome Access to Pharmaceutical Services Outcome Financial Resources Summary (A) Budget Estimate 009-10 $ 000 Program.1: Community Pharmacy and Pharmaceutical Awareness Administered Expenses (B) Actual 009-10 $ 000 Variation (Column B minus Column A) $ 000 Budget Estimate 010-11 $ 000 Ordinary Annual Services (Annual Appropriation Bill 1) 371,83 387,85 16,00 61,695 Departmental Expenses Ordinary Annual Services (Annual Appropriation Bill 1) 13,493 13,408 ( 85) 13,608 Revenues from other sources 05 145 ( 60) 14 Unfunded depreciation expense 1 - - - 375 Operating loss / (surplus) - 5 5 - Total for Program.1 385,51 401,383 15,86 75,89 Program.: Pharmaceuticals and Pharmaceutical Services Administered Expenses Ordinary Annual Services (Annual Appropriation Bill 1) 187,79 187,439 ( 353) 19,974 Special appropriations National Health Act 1953 - Pharmaceutical Benefits 8,486,519 8,34,035 ( 144,484) 9,038,67 Departmental Expenses Ordinary Annual Services (Annual Appropriation Bill 1) 34,33 34,910 578 34,64 Revenues from other sources 53 378 ( 145) 544 Unfunded depreciation expense 1 - - - 954 Operating loss / (surplus) - 14 14 - Total for Program. 8,709,166 8,564,776 ( 144,390) 9,67,73 Program.3: Targeted Assistance - Pharmaceuticals Administered Expenses Ordinary Annual Services (Annual Appropriation Bill 1) 76,15 79,501 3,349 119,36 Departmental Expenses Ordinary Annual Services (Annual Appropriation Bill 1) 1,301 1,477 176 1,31 Revenues from other sources 0 16 ( 4) 1 Unfunded depreciation expense 1 - - - 36 Operating loss / (surplus) - 1 1 - Total for Program.3 77,473 80,995 3,5 10,695 Program.4: Targeted Assistance - Aids and Appliances Administered Expenses Ordinary Annual Services (Annual Appropriation Bill 1) 617 617-1,51 Special appropriations National Health Act 1953 - Aids and Appliances 30,098 7,18 (,916) 48,579 Departmental Expenses Ordinary Annual Services (Annual Appropriation Bill 1),36,784 4,38 Revenues from other sources 36 30 ( 6) 37 Unfunded depreciation expense 1 - - - 66 Operating loss / (surplus) - 1 1 - Total for Program.4 33,113 30,614 (,499) 5,585 118 Department of Health and Ageing