Review of discount rate in the PBAC guidelines - Phase 2 consultation

Overview

The Commonwealth has entered into a new Strategic Agreement in relation to reimbursement, health technology assessment (HTA) and other matters (the Agreement) with Medicines Australia acting on behalf of the innovator medicines industry. As agreed under Clause 5.2 of the Agreement, advice was sought from the Pharmaceutical Benefits Advisory Committee (PBAC) on whether the base case discount rate at 3A.1 of the PBAC guidelines aligns with international best practice. The PBAC intends to provide its advice at its July 2022 meeting following:

• consideration of an independent analysis of discount rates used in other jurisdictions and their rationales
• consideration of Medicines Australia’s submission on the discount rate used by the PBAC
• consideration of impacted stakeholders' feedback received via this consultation
• consideration of stakeholders' response to the independent analysis of discount rates
• consideration of advice from its sub-committees such as the Economic Sub-Committee
• consultation with the Medical Services Advisory Committee.

The PBAC will use a two-phased consultation approach to:

• invite your feedback on the review of discount rate (Phase 1). The purpose of this consultation is to capture the perspectives of parties that may be impacted by a decision to change the base case discount rate at 3A.1 of the PBAC guidelines
• provide you with an opportunity to make further comment following release of the independent analysis (Phase 2).

Feedback from both phases of the consultation will be considered by the PBAC before it provides it advice.   

Timeline

Phase 1 consultation opened from 5 April 2022 and closed on 29 April 2022.

Phase 2 consultation will open on 25 May and close on 1 June 2022.  No extension will be granted.

Consultation scope

Scope

• Whether the base case discount rate outlined in section 3A.1 of the PBAC guidelines aligns with international best practice
• Whether the base case discount rate outlined in section 3A.1 of the PBAC guidelines needs to be changed
• Impacts and ramifications of any change to impacted stakeholders

Out of scope

• The Health Technology Assessment Policy and Methods Review
• Review or change of previous PBAC recommendations

Phase 2 Consultation:

The PBAC has commissioned an analysis of discount rates and practices used in other jurisdictions nationally and internationally and the rationales provided to justify these rates. The analysis was undertaken by Centre for Health Economics Research and Evaluation (CHERE) at the University of Technology Sydney (UTS). The Report is based on a review of recent peer-reviewed and grey literature regarding discounting practices in both HTA and non-HTA settings in Australia and internationally. The Report considers economic arguments underpinning the practice of discounting and choice of discount rate, from both theoretical and practical perspectives. The Report also includes a discussion of matters raised in submissions by Medicines Australia and other stakeholders to the Review.

The Report is available to download below under 'Related'. Please provide your comments on the Report in the Online Survey below.