Health Technology Assessment in Australia

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By Hansoo Kim1, Joshua Byrnes2, Stephen Goodall3, on behalf of ISPOR Australia Chapter executive committee

1Monash University, Australia 2Griffith University, Australia, 3University of Technology Sydney, Australia

Australia was one of the first countries to require health technology assessment (HTA) evidence be submitted to decision makers. In 1992, HTA was introduced for the reimbursement of pharmaceuticals in the following years for procedures, diagnostic tests and devices. An interesting feature of HTA in Australia is that drugs and vaccines are reviewed by one agency (Pharmaceutical Benefits Advisory Committee: PBAC), whilst procedures, tests and devices are reviewed by a different agency (Medical Services Advisory Committee: MSAC). This relates in part to the different funding streams for drugs and services in Australia. Below we briefly describe the HTA processes in Australia, and reflect on the current and future challenges.      

Pharmaceutical benefits advisory committee (PBAC):  All medicines have to go through a comprehensive evaluation process before they receive government subsidy through the Pharmaceutical Benefits Scheme (PBS). The pharmaceutical company submits an application to the PBAC who makes a recommendation to the Government. The PBAC is made up of doctors, health professionals, health economists, consumer representatives and an industry-nominated member.

New drugs can be submitted to the PBAC in parallel with the regulatory approval process (Australian Therapeutics Goods Administration: TGA). Submissions are categorized as either major or minor submissions. Major submissions can either be for a new medicine or a new indication for a currently listed medicine.

Submission costs are recovered by the Australian government through several fees, a major submission is approximately AUD 180,000, as of January 2020. In some instances, like orphan indications the fee is waived. A PBAC submission should include five sections as described in the PBAC guidelines. The submission includes all relevant information, including the clinical algorithm and restrictions, clinical evidence, economic model and budget impact model.

Applications to the PBAC follow a 17-week cycle with submissions possible three times a year in March, July and November. Major submissions are evaluated by an external group (selected from a number of pre-approved groups) during the first 10 week of the cycle with an evaluation report sent to the sponsor. The sponsor then has one week to respond to the report. The submission, evaluation report and the company response are then passed on to two technical subcommittees of the PBAC: the Economic Subcommittee (ESC) and the Drug Utilisation Subcommittee (DUSC). The ESC assesses the clinical and economic evidence, and advises PBAC on the technical aspects of these evaluations. DUSC assesses the projected usage and financial cost for medicines. The advice provided by these two subcommittees is provided to the company at week 15 after the initial submission and the company has one week to respond. Comments from individuals, health professionals and other interested parties can be submitted via an online form up to three weeks before the PBAC meeting. The PBAC then meets approximately 17 weeks after the submission.

A public summary document is published on the PBS website 16-18 weeks after the meeting on the PBS website. Following a positive recommendation, the company and the department of health will finalise a deed of agreement that includes the terms of the price (e.g. any special pricing arrangements), restriction of use and financial risk share agreements.

Medical Services Advisory Committee (MSAC): In 1998, MSAC was established to ensure that new and existing medical procedures were supported by evidence of their safety, effectiveness, cost-effectiveness and total cost. The main role of MSAC is to determine which medical services should be funded by the Medical Benefits Scheme (MBS). The MSAC meets three times per year and comprises individuals with expertise in clinical medicine, health economics and consumer matters. It is supported by two sub-committees, the Evaluation Sub-Committee (ESC) and the PICO Advisory Sub-Committee (PASC). The PASC committee determines the population, intervention, comparator and outcomes (PICO) of the application’s proposed medical service. The ESC’s focus is to consider the clinical evidence and economic assessment presented in an assessment report. Unlike the PBAC process, the MSAC process is fully funded by the Commonwealth Department of Health and not cost recovered from the applicant.

The first stage of a new application is to develop a PICO (Population, Intervention, Comparator and Outcomes) Confirmation and determine the relevant clinical algorithm. An HTA group (selected from a number of pre-approved groups) is contracted by the Department to develop the PICO Confirmation. Once the PICO confirmation is approved, an assessment report is developed. Assessment reports are undertaken either as a Contracted assessment or Submission based. For contracted assessments, the Department organizes, coordinates and covers the costs associated with developing and preparing the necessary MSAC documents for consideration. Applicants are allowed to engage with the HTA group contracted to undertake the assessment although this is facilitated via the Department. On the other hand, applicants are responsible for organizing, coordinating and covering the costs associated with developing and preparing MSAC documents under a submission-based assessment approach.

Similar to the PBAC submissions, MSAC assessment reports include: clinical context, summary of clinical evidence, economic model and financial implications and other. In addition, a summary of the feedback from any formal public consultation or otherwise received throughout the process as well as a consumer impact statement are also presented alongside the assessment report. The assessment phase of the MSAC process does not vary as greatly as the pre-assessment phase. Once the department receives an assessment report (either submission based or contracted), the assessment phase of the MSAC process takes approximately 4 months and then approximately 6 weeks between ESC and MSAC consideration.

MSAC’s advice to the Minister is made public in the form of by a Public Summary Document (PSD) that explains the rationale for MSAC’s advice and is made available on the MSAC website.

Co-dependent technologies: In recent years we have seen closer collaborations between PBAC and MSAC, this is in part a result of co-dependent technologies. Technologies are co-dependent when their combined use (sequentially or simultaneously) enhances the clinical effect of the technologies. To date, most co-dependent technologies assessed in Australia have been drug / test combinations, where the new drug is seeking listing on the PBS and a related diagnostic test is required to refine patient selection and eligibility for the new high cost drug. Hence the related test is simultaneously seeking listing on the MBS.

In terms of how co-dependent technologies are evaluated, there are a number of options in Australia. A MSAC co-dependent application is required if the co-dependent technologies include a medical service and diagnostic test. A PBAC co-dependent applicant is required if the co-dependent technologies include a combination of drugs. A MSAC/PBAC co-dependent application is required where the co-dependent technologies include a diagnostic test (or consultative service) and a therapeutic drug.

The future of PBAC and MSAC: The Australian HTA process has evolved over the years and there are many challenges ahead with respect to emerging technologies such as how to deal with high cost personalised medicine like CAR-T therapies and growing pressure for access by patients and advocacy groups. As such there is little doubt that the relationship between the pharmaceutical industry, academia and the payer will play an important part on how HTA will evolve in Australia. Further information in relation to the PBAC and MSAC can be found on and