Review of discount rate in the PBAC guidelines - Phase 1 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, the Minister for Health has sought the advice of 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 to the Minister 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 will open from 5 April 2022 and close on 29 April 2022. No extension will be granted.

Phase 2 consultation is expected to occur from 18 May 2022 subject to delivery of the independent analysis and close on 30 May 2022. No extension will be granted.

Any feedback received after the conclusion of the consultation will not be presented to the PBAC for consideration. 

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 1 Questions:

1. How does the discounting method in section 3A.1 of the PBAC guidelines compare with discounting methods used in economic evaluations that support other public funding decisions in Australia and in comparable overseas jurisdictions?
2. Does the base case discount rate outlined in section 3A.1 of the PBAC guidelines need to be changed? If so, what should it be and why?