The 'Dispatched' Podcast
BioPharmaDispatch - discussing the issues impacting the Australian biopharmaceutical and life sciences sectors with Paul Cross and Felicity McNeill.
The 'Dispatched' Podcast
The 'Dispatched' Week in Review'- 5 December
A turbulent round of Senate Estimates, highlighted by a heartbreaking exchange about a mother with two children battling Crohn’s disease. Officials suggested that the family seek compassionate access from companies or seek treatment at a public hospital. We also canvass ‘MFN’ pricing risks, FOI controversies, ministerial travel blowouts and looming budget pressures that do not operate according to what might be a common understanding.
Hello and welcome to the Dispatch Podcast. Week in review. A lot to talk about this week. My name is Paul Cross. Delighted to be joined by my co-host, Felicity McNeil, PSM, Chair of Better Access Australia. Hi Felicity.
Felicity:Hi, Paul. How's your week been?
Paul:It's pretty good. Pretty, pretty, pretty good. It's we're well into December now. I see a lot of Christmas parties in the last sort of 48 hours. So they're all starting, which is fun. Everyone's in a in a mix of a good mood and a grumpy mood.
Felicity:Excellent. And you've got Heineken in what? Ten minutes. It's next week. Yeah, it's next week.
Paul:Uh yeah, Heineke, which is great.
Felicity:You know, it's my favourite um Jewish festivity because it's donuts. The donuts, all the bad food. Lemon it. Absolutely love it.
Paul:It is good. It is good.
Felicity:Yeah, well, I mean, as you know, you and I were talking about earlier before Siri rudely interrupted.
SPEAKER_00:Yeah.
Felicity:It's um we've got the chocolate, so nothing says new life reflection on on on what has been and what may come than dairy milk chocolate. Of course, after Sheroeve Tuesday, which of course is very important to let's how many people understand that the last supper was a Shabazz? Well I do.
Paul:I know. I know they they sort of skip over that bit sometimes, something.
Felicity:But that's because no one likes to eat the horse radio should.
Paul:That's right. That's right, yeah. Okay, let's uh let's get sucked into it. Uh 'cause we do have quite a long list.
Felicity:Big week in Parliament.
Paul:Big week in Parliament. Estimates.
Felicity:Yeah.
Paul:It was a spill over because the annual reports were late. Uh it was interesting. I thought the exchange between Senator David Pocock and officials over the family with two children, one with progressed Crohn's disease, another one with developing Crohn's disease. The mother was actually in the committee room, so she had to sit through this exchange, which is quite devastating. I I thought it's one of the it's one of the and I'd encourage people to try and find it online. The video will be available. I'm sure David Pocock has put it on his social, so I hope he is. But the the transcript went to a justice. It was a very good series of questions. Senator Rustin joined in later. They just revealed the sham. The population level sham of this system. The hiding behind an advisory committee. That's I that's really starting to drag on me. They've been doing it for 40 years now. These committees have no particular expertise. They have power, in one case, legislative power, but it's primarily positional. If you change every single member, they talk about the experts on these committees. If you just fire them all tomorrow, which the minister can do, and reappoint new people. Are we meant to believe the decision making will change? Well, no, of course it won't, because the framework is fixed. These committees don't establish their own framework, they operate within frameworks set by the parliament, their minister, and and officials. And I'm really fed up with the people who actually have the power to do something. Just hiding behind these committees. In some ways, I feel sorry for the committees, to be honest, because they're used as a as a force field. And I I sort of likened it. Watching the exchange yesterday, it was like watching you know an interview with Meghan Markle. It was that, it was that shit, it was that it had that level of substance. And it was I just thought it must have been devastating for that mother. Oh, it's under active consideration. No, it has been considered twice. At least one company, I highlight AD, submitted seeking early access so those children don't have to go through the process of using a drug that's literally older than the PBS itself. And I'm guessing the response was quite devastating for you. I just think it's tragic.
Felicity:Yeah, look, I think I suspect that the officials didn't realise that the individual parent was in the room at the time who was also present for Senator Rustin's uh series of questions. What what frustrated me w was the dance that went on. So the deliberate Do you mean someone can prescribe it, or do you mean they can prescribe it for a subsidy? Can we clarify, please? I mean we all know how to we all know how to play that game. We we do. We do understand that. And the the reality that it was put on the the record A making it sound like companies hadn't participated, which they have, which I found very disingenuous.
Paul:It's under active consideration.
Felicity:It's under active consideration. Of course, it's up to a company to bring something forward. Well they already have.
Paul:Yes.
Felicity:More than once. And that that was a theme that I know we're going to talk about later, which is the real perpetuation of the company's bad, poor little bureaucrats and the officials trying to do our best against them. And we'll go into that. But for me, it was really the system is designed at population level, and so therefore we don't have to look the patient in the face and understand the implications of our decisions.
SPEAKER_00:That's right.
Felicity:The this is something that I have been arguing against since your first conference in 2018, when with the promise that these are biologics, this was always supposed to be expanded once these medicines became cheaper. This was the promise. And then we ended up with as you've written about again, the targeted therapies a lot.
Paul:Where they bribed, they basically bribed these patient organizations to use their brand to promote methotrexate.
Felicity:Perhaps wasn't such a bad thing that they got rid of MPS medicine-wise after all, eh? Because that was their their their point of view. But this, you know, PBAC did a post-market review of F2 medicines and access to these several years ago, recognizing finally that as everything goes off patent, the need for um broader listings on the PBS to allow clinician expertise to shine through and say this is the best treatment for my patient, noting this thing's been off patent for, you know, five, ten years, it's at a good cheap price, and there's a whole heap of clinical evidence, but it's just not gone through the subsidy process because, as we know, it's very expensive to apply when it's off patent, there's limited value, and the type of data that we want for a subsidy, the submission churn is ridiculous. This child is suffering because of that. Uh, the desire to say, hey, but you know, the states could pay for it. So if you put your child in the public system to see a public clinician based with a hospital, now this was an ACT area, so we all know the problems with the um ACT is not a signatory to the pharmaceutical component of the national health reform agreements. Now that's and that's for discharging medicines. But we're literally saying instead of being able to see your clinician on a regular basis, can we go into the health hospital system and can you find, I mean, have you seen the ACT budget? We're broke and um that the system's bleeding, expecting them to fund it when also if you do that, if you go and give that different access outside of what's um the current process, there's a risk that then that child does not continue to have access to the subsidy into the future because they didn't qualify. Whereas the reality is these things work, they're available as as first line treatment in many other countries. And, you know, there's there's a list that we can go through, which I know that everyone beautifully avoided yesterday, but they are subsidized, not just clinically approved, but they are subsidized as first-line treatment in many countries overseas. And we're really proud of the fact that we're we're slowly getting to it. I can only assume that the reason it's been considered in December is maybe did the health minister is this like um uh uh what do you call it? Women's health. Women's health and all the medicines where he turned around and said, no, not good enough, come back with something better.
Paul:We're gonna talk about another example of that which has emerged today. The fact that a very senior health official suggested to Senator Pocock and Senator Rust that the solution here was for the family to beg for compassionate access from the company.
Felicity:Oh, that was offensive.
Paul:Or or to go to the state public hospital system. I'm sorry, the federal government of Australia legislates legislates this role for itself. It protects its monopsony power by not allowing general insurers, for example, to enter this space.
SPEAKER_00:Yes.
Paul:Or private health insurers to systematically provide this product. So we have a situation where NIB, one of Australia's largest private health insurer, provides a very limited pharmaceutical benefit in Australia for OTC and non-PBS medicines. It's probably around$500 a year for most people, and provides a very comprehensive version of that in New Zealand.
SPEAKER_00:Yeah.
Paul:Uh private health insurers can't do that in Australia. So I've got a real problem with them trying to flick the obligation to the parent to beg for free access. Really? I mean I mean I know that Australia positions itself as a global charity case on pharmaceuticals. I mean, and we got that yesterday from the Secretary. But to suggest that a mother should do it who is watching the impact of progressive Crohn's disease harm her now second child, it's inhuman.
Felicity:Yes, and and I I spoke to people yesterday, and I'm not going to disclose confidentialities about just what that experience is like for that mum and that child. And it was horrific. And there's someone who works in newborn blood spot screening, something that also came up yesterday. Uh I I wish that those officials actually had to address that specific issue and that specific information and that testimony from that child and that mother. But I I'm with you. I am so offended. I know when new innovative medicines and technologies come out, and I'm I used to write those letters, it's not currently subsidised. You know, you can't.
Paul:We've all written them. We've all you and I have written them. But when something's off patent, and has has been off patent for quite a long time now. And and the government response to that patent expiry was to try and stop people using them by promoting eighty-year-old medicines.
Felicity:Yeah, and and it goes to the broader issue, which is a really concern to me and and will be a lot of focus of budget proposals, is once again we're talking about the area of chronic disease. So if you look at the work of the Productivity Commission, the prevalence of chronic disease in younger people is increasing exponentially year upon year. And so when we sit there focus, and it's great, we're focusing on age care, and we need, you know, more residential aged care facilities every week to deal with the the the number of people that will be aged over 80 in in a few years' time. We are losing sight of the fact that chronic disease is becoming something of youth, not age. So we used to start to, you know, be diagnosed later and later at life with a complexity. Our world has changed, and for whatever reason, our children, people in their 20s and their 30s, you know, migraines are another classic example. These are young people's chronic diseases, and it's not their fault. And actually the delay to treatment causes irreparable harm. And that's what that mum was talking about, which is these are drugs for a condition that affects your gastrointestinal system. We already know that when we use those same drugs in musculoskeletal, the the preemptive, you know, the methotrexates, the salazoplirins, the luflinamides all do huge damage to the gastrointestinal system of someone with a musculoskeletal disease. We tell you you have to deteriorate to such a point before we will give you those the biologics and will allow the harm to be done to your joints and the harm to be done to your gastrointestinal system. The absurdity right now of putting highly toxic drugs that do damage to the gastrointestinal system to young children to allow them to deteriorate so that then they can qualify for a drug to stop damage to the gastrointestinal system is extraordinary. And we've kind of got to get over this. Uh, you know, I understand 30 years ago when we had biologics, we were concerned about the black box warnings about how you use them and the risks of complications of other diseases at a later point in time and how they could be used in children and whether that was safe to do so or not. We gradually learnt that it is particularly safe to use them and to understand the particular harms and risks. We've got to stop making you know, penny pinching. Government has to stop penny pinching on a children's life because what you're doing to that child right now, that damage can never be undone.
Paul:Well, yeah, yeah, I think it's a human rights issue here.
Felicity:Absolutely.
Paul:This is not an unintended consequence of the system.
Felicity:It's a deliberate known consequence.
Paul:It's a known consequence. This is what happens. And I hope the officials were uncomfortable. I hope everyone was uncomfortable. I was uncomfortable watching it because it just devastates. It's very sad what this family, what this mother must be going through. The fact that she feels so strongly about it, that and there's a more what brought a rat backstory to this mother and their relationship with the government, uh, which means the Prime Minister should be taking a very close interest in this.
Felicity:Yes.
Paul:Uh the I hope everyone feels uncomfortable. My argument on patient advocacy going back 20 years is that the system one of the biggest challenges is that this institutional framework depersonalises through these aggregated economic models, that it says that this poor child, these children, and this mother, according to our system, live their experience in the aggregate. And of course they don't. Of course they don't. So I think making people uncomfortable is the way to go. I've always argued this. And the frustration for me is when industry and even some patient groups decide to remove the personalization of it, the suffering element. This is a child. This is a child. It's bad enough that this is happening in working-age adults, and the whole economy suffers the consequences of that beyond the the family. But these are children, and there is something particularly cruel about listing these medicines in pediatric indications, but not making them readily accessible. There's something particularly to me, I look, and people get upset when I criticize the institution. I'm not criticizing the institut the inst I'm not criticizing the individuals, I'm criticizing the institution that forces officials into these laughable responses. And I I'm just sitting there yesterday going, can you hear yourself? How do you feel when you go home at night? And we both work in this system, right? And it's hard. It's hard when you are in it and fighting it. It is really hard. I was very fortunate to work for a minister who hated the institution as much as I did. And he really fought it. And I worked for one who just saw herself as an administrator, an extension of the institution. And people don't realise ministers exercise enormous power. I hope, I hope the minister has heard from Senator Pocock. I hope this minister has shown himself someone who will intervene. And I and I hope he's heard, but I also hope he takes the right message. Is that this is not just an issue for this family. There's probably thousands of families in this situation.
Felicity:Correct. And and this is the broader issue for me, which is the pol, you know, there was a post-market review that said we know when things drive patent, we need to grow up. We need to actually let loose those restrictions. We need to let loose all the all all the checks and balances that are actually denying people access to contemporary care. There is no point giving me a bolt-billed GP appointment if my child needs specialist care and specialist, you know, continual hospitalization because I can't afford the access to the medicine because it's not being PBS subsidized, and yet technically it's there. It's actually there and within grasp. And that's where the more sophisticated conversation is needed, because this is but one example. This is no different to anybody who wants a biologic. That are actually probably best in their clinical treatment pathway, because the risk shares mean that the companies won't list. And chronic disease, and and I've said this in the Productivity Commission uh forum last week, it's chronic disease that's missing out. It's actually the biggest burden coming for the community, not the system, for the community. If you look at AIHW's report on preventable, possible preventable hospitalizations, which even the department mentioned over the last couple of days. Prevention is not stopping someone getting the disease altogether, because so many of these diseases cannot be stopped because of their genetic profile. What you can do is give early intervention in primary care that stops them leading to hospitalization and complexity and comorbidity of disease. And we are siloing the thinking on this to the fact that this it's a no-brainer. This child not only deserves quality of life, but this child also deserves not to be constantly in the hospital system for treatment. And if you treated properly in the primary care setting, you would relieve the the burden on, you know, acute care, the national health reform agreements, but you would remove the burden on that child and their prognosis for a healthy life.
Paul:This is Crohn's disease. People who don't understand this disease or know much about it, it's bad enough for adults. It must be absolutely horrific for children. Now, you mentioned something to me yesterday, and I I don't want to take your words. I'm going to credit them. You just said, well, this is actually pretty easy. The clinician just prescribe these first line therapies and get them back the next week and just say they're not working or they're faded or contraindicated and get them on the biologic. Of course, the companies can't do that. They're not allowed, they're not allowed to do that. Uh, but we can say just do it.
Felicity:And I and I'm not saying that I'm not actually asking the clinician to lie, because the testimony from Senator Pocock, paraphrasing the experience of that child and that mum, and understanding a bit more about it even subsequent, they are contraindicated. That that child is suffering excruciatingly from the medicines as much as the disease. And that's sometimes where clinicians do have the right to say, This is what we're doing. I mean, I know so many clinicians when biologics first came out, and the problem with again muscular skeletos, so you had to have four major joints or more than 19 minor joints. Like, seriously, and you know, and you had to count around, and then you had to have CRP scores of a particular amount, and you know, some days, you know, rheumatoid, psoriatic ankle, as if. Spongiolites, all those kinds of d um arthritic conditions all vary based on what's happening in your time. And so, what did all the doctors do? Because they couldn't get the consistency of the blood work? Put everyone on steroids because it suppresses the thing, and that's a qualifying substance for the fact that okay, you you you can qualify even though the blood work's looking a bit weird. And then we'd get the accusations of, oh well, people are working around the system. They're working around the system because you are making it so hard to treat. And like I said, the the volatility of any patient's blood work on any given week is so marked.
Paul:But it also assumes that the system has some kind of moral authority to it. This is this is what really annoys me is that oh, you're working around the system. Well, yeah, because it's amoral. And so I have no issue there. We we we I'm I'm you know, I I would like to think that I am a law-abiding citizen of this country, but this is nothing legal about this. This is this is just a decision where the government has decided to prioritize it systematically chosen to prioritize its own economic interest. We were promised broader access to biologics because of biosimilars. That was the whole point of biosimilars. It was when they were first first raised as an issue in 2010, or even before then, the potential emergence of biosimilars. And in fact, the opposite has happened. Yeah, there are some general benefit listings, and that's that's great, but this needs to be approached more systematically.
SPEAKER_00:It does.
Paul:So I hope something can be done. I it was a tra I please go and get you can get the video, you can download it, it's all on YouTube. Uh people who have media monitors, media monitoring companies can get get get access to the snippet. The transcript won't do it justice. Congratulations to Senator Pocock and his team, and congratulations to Senator Rustin for supporting this. And we we need to see more of it. Uh a couple more interesting exchanges. We spent a lot of time on that subject because it's actually really, really important. MFN. Senator Rustin was asked about it yesterday.
SPEAKER_00:She was.
Paul:Uh, in the past week we had the formal arrangement between the UK and Australia. Oh, sorry, and the US, under which no tariffs, which is significant for the UK because they export around look, the it equates to ten times more than Australia does for the US in terms of pharmaceuticals. Pharmaceutical sector in the UK is far more embedded in its economy than than than it is here. So it's a much it's a much bigger issue for them. And in return, they're going to increase their spending on innovative medicines. Seems like a fair deal to me. I don't know why anyone is complaining about it. As I wrote this week a few years ago, let's 36 months ago, Australia agreed to spend hundreds, if not billions, more on generics in response to global pressures. But we had this very strange scenario. We had one official trying to play it down, saying we can't really compare the situation, we haven't done anything. And then we had the secretary coming in saying, Whoa, whoa, whoa, whoa, whoa. Uh we've done a lot of work on this, we're allocating a lot of resources to it, and we are very cognizant of the risk.
Felicity:Yeah, it was kind of funny. Um it it was it was symbolic of the the the previous day as well, too, where everyone was working hard to say that there was no modelling, there was no this, there was no that, you know, and we could talk about the bulk really, but it was this um but that also went to the the culture and the tone of estimates, which was talk to the hand. The the disrespect and and watching the different committees, you know, legal and constitutional affairs and how they run and others. But this one is really dismissive of the questions and the interest.
Paul:It's like Yeah, it's it's adopted that third-term government tied in at second term.
Felicity:Yeah, it's it's really quite um it it's it's shameful because you know, we and you want to talk about the fact that you know they didn't even bother to show up with the pre-requested information.
Paul:This is it, this is important. Let's f let's focus on that one, which is every Senate estimates going back I don't know how many years, the shadow minister submits questions to the Secretary. For a long time it was outstanding PBAC recommendations led to progressive listing. I don't know what that that one featured anymore, but the secretary just refused to answer them this time. And in response to Senator Rustin's fair quote legitimate questions, because it's obviously very disrespectful of the Senate, and if you're disrespecting the Senate, you're disrespecting 27 million voters or Australians. Uh Senator Russin said, Why? Well, we got questions from more senators, more than one senator. Well, how many? Or one other. It was embarrassing, and this sits against the backdrop of the the attempted FOI changes.
Felicity:Yeah, there's there's a lot going on here. So like I said, that the MFM was a an interesting um discourse with respect to just trying to look like something doesn't matter, nothing to see here, then versus realizing hang on, we have to say show that we are actually proactive and looking at things. So there's a little bit of um left hand not knowing what the right hand was intending to say. Um but yeah, I I'm more concerned about the lack of transparency, the like you said, that's kind of like third-term government approach, which is we just don't have it's not handing over information. I mean, my my favorite, I mean it was bad in the community affairs, but my favorite is um, you know, those of you who follow David, Senator David Pocock, who I do, his excerpt from legal and constitutional affairs, where he asked where his responses to his questions on notice were, and the secretary of that organization or CEO said, Well, I'll need to take that on notice. And he's like, sorry, can I just be clear that you want to take on notice to respond on notice about why you haven't responded to the questions on notice? Oh, yes. And he raised the very issue, which is this is not respectful of the Senate, this is not transparency, this is not accountability. He's you know, I'm a I'm a big fan of his on this, and and some of the other senators who are really trying to point to the issue, which is it's not just a nicety, you're you're not doing us a service. This is the parliament. Yes. This is the parliament. You are accountable to the parliament, and you are most certainly accountable to the Senate. And it was the other thing I noticed too, which is in those committees, when someone such as Senator Pocock gets a little bit bulgy about it and directive, like the old Senator Faulkner days, of saying, no, this isn't good enough, he's allowed to express that view. What really concerns me in the community affairs one is the bullying of the senators by the senators. So anytime you want to ask a question or raise a concern, so Senator Ruston basically said the exact same thing. You know, you promised me this information by lunchtime, it's still not here. I feel like you're willfully not hot holding this. Maybe we should hold it over to tomorrow. She's then accused of bullying, being disrespectful, not following the rules of the Senate. We have to break for a quiet meeting between senators to it's really scary.
Paul:What's ironic too, given that the chair of that committee, there have been multiple reports of bullying complaints against the chair of that committee. Whether they're true or not, I don't know. Uh, but there have been reports of that.
Felicity:Yes. And so of actual bullying. And so the thing for me is that this committee, which is now health, aged care, and disability, so all of the social services sector includes you know services Australia. So how we actually get all that information. That one which most impacts every individual in the country is the one that is the most dogmatic about not handing over information and using the um mystique of what is to be bullying and respectful conduct to prevent robust discussions that go to the ability of people to find out what's happening with their healthcare, what's happening with their disability services, what's happening with their payments that are being processed. Whereas, like I said, if it's legal and constitutional and so it relates to BHP bulletin or Qantas or a mining sector, someone else, or um aviation, there is a tolerance, sorry, there is an acknowledgement that questioning and demanding respect and information is not bullying. That's the job. And I I really am quite concerned about it because it leads to these wastes of time, these long-winded answers, and it gets governments in trouble too. Eventually. Well, one would hope so, but I I'm I'm s speaking as someone who wor you know, volunteers in the social services sector and say how hard is it to get information? Um and then like I said, and then we've got the FOI debacle coming in.
Paul:Well we're gonna talk about something else that I think suggests some worrying cultural issues inside the ministry. But uh yeah, the FOI changes. So thankfully whilst the Labour Senate is on a committee have said no, no, this should pass, the crossbench, the Greens, the coalition said no, no, no, no, there are significant problems with this. So hopefully that is a sign that these FOI changes will not navigate the Senate because they absolutely should not, unless there's another fifty million dollars in it for the ABC or something. If the Greens do some grubby deal like they did on those laws last week. More money for the ABC. More money for the ABC. Seriously. Uh unless something like that emerges, these FOI laws appear stuck. And look, the FOI the existing FOI laws are obviously imperfect, but you already see agencies, I think, adopting a far more assertive posture in hopeful anticipation that these laws were passed. No better example than the finance department, who generally I think are pretty good. I mean, health has stood out as a complete scoff law on FOI in recent years. Ten years ago, health were actually really good. I know really good. You got a lot of stuff, yeah. No, you would never get that now. Someone submitted an FOI seeking all relevant information on the finance department's plant and garden maintenance contracts. So if you've been to Canberra, you know that the finance department, which used to be in the old John Gordon. John Gordon Building, which is a beautiful old building. Uh which now has a massive, very ugly car park next to it, which I don't know why we know because everyone works from home these days. But uh that building would have been built in the 30s or the 40s, I think, John Gordon Building.
Felicity:Uh yeah, finally came into fruition in the 60s.
Paul:Yeah, beautiful. Like the Treasury. Uh the new finance building looks like belongs in Manhattan. It's all glass and it's gleaming.
SPEAKER_00:It's paleo bread.
Paul:Paleo is one of the greatest recruitment ads of all time. If if people are looking for a laugh, you should go to YouTube and Google Finance Department Australia recruitment video. Paleo bread. It's one of the paleo bread, yeah. Rosemary Huxley couldn't be bothered learning new lines. Uh she's reading off. Wooden doesn't do that performance. She used to do much better at estimates, just saying. Yes. It's it's one of the funniest things. I might include the video in the in the in the email. Uh so they're asked for the obviously they've got very nice plants, they've got gardens that have to be maintained. Completely fair enough. It's a standard thing. But they redacted the entire there was like six, six or seven contracts, and they've redacted them in their entirety. There's really nothing in this. We don't know, we're not allowed to know how much they spend on plan maintenance. Now I assume they went through a third-party process. But isn't it a coincidence that all the third parties objected? What a coincidence.
Felicity:Yeah, and you know, if you think about when your government introduced um CTC competitive tendril and contracting, and one of the things that was very clear on that, so I've got like the Murray orders, etc., was you couldn't use commercial and confidence as a reason not to disclose information to the Senate. It became very, very serious. And we have those those various orders. I mean, I looked at that FOI2, and as someone who actually used to, my first job was administering the indoor plant contract, whole of government contract. There were a lot of indoor plants just saying um, a bit of greenery around the office. Showing my age. But one of the things that the the absolutism of it is it didn't even just say, well, we could actually outline what the services are. We just we just blanketed it all.
Paul:And I think blanket the entire documents.
Felicity:Yeah. And I thought you made a really good point, which is imagine if we did that to the PBS. I mean, all our medicines, we know exactly what we're paying. We know how much we're paying for a pharmacist, we wholesalers. We know how much the wholesalers are getting, we know. We know how much each company gets paid. Yeah, we do. We've got them in their top 50, top 20.
Paul:We know the top brands. Now, obviously, 10 to 15% of prescription volume is covered by SPOs.
SPEAKER_00:Yes.
Paul:Right? So we don't we don't know a lot there, but for the vast majority of prescription volumes in Australia, we know exactly who's getting paid what.
SPEAKER_00:Yeah.
Paul:But we can't know. Like the guy that's walking around the finance department building, I don't know, they've probably got a lot of plants in there, I'm I'm guessing.
Felicity:Well, he does own that really big house on the corner of Muggleway, so that might explain.
Paul:It's got to mow the lawn because there's a bit of greenery outside. We're not we're not allowed, we're not allowed to know anything about those contracts.
Felicity:So dangerous.
Paul:And so that that that to me is that to me is disturbing. But another another interesting part of estimates was early on, Senator Rustin's first question, it was the obvious one about the five percent reprioritization.
Felicity:Oh yeah, she was allowed to ask that after Senator as Senator Minister Gallagher had gone that that dance with Senator Pocock previously about when is a letter not a letter.
Paul:Yeah, the Secretary read from a prepared oh yes, that was good. From a prepared statement, which I thought was interesting, so that's been issued. Uh unusual for him, I would say, but probably makes sense because it's budget. They'd be a bit stressed about that. He confirmed that they have to identify five percent of program spending, which is for them. I mean, there's not a not a lot of discretionary spend in health when you think about it, because you've got PBS, Medicare, health insurance, rebuttal, that might be true. I don't know whether it's NDIS. Yeah, NDIS, you've got uh public hospitals. There's not a huge amount of discretionary spending. I mean 90% of it fixed. But I presume maybe I'm wrong on that, but I think a lot of it is is fixed. So it's gonna be hard to identify 5%, because 5% like how do you identify potentially low priority spending in Medicare, the PBS, private health insurance rebate, NDIS, and public hospital. Like where's the where's the low priority spending in that? So you they might do some programs, it's gonna be quite hard for them. But he also talked about the budget budget operational rules for the the offset requirement. Obviously, they have that most years, except during COVID. Uh and they've got it again this year, which was interesting that he confirmed that. And there's already starting to be a lot of discussion about the May budget. We're yet to see my IFO. It's pretty unusual for a government to announce a lot of new policy measures in my IFO. It's literally a budget update on things announced since the budget.
SPEAKER_00:Yeah.
Paul:And occasionally it might include a few announcements. I don't think you'd put massive announcables in my EFO unless it related to an urgent matter.
SPEAKER_00:Yeah.
Paul:I wouldn't expect much. But I just want people to understand that no one can speak with any confidence in early December or late November about what is going to be in the May budget. Agencies will not have may not have even made their submissions to the process yet, likely to come. Certainly next year, early next year. And it's going to be a very rigorous process. Stuff will be submitted, stuff will come out, stuff will be resubmitted. I would we've done a lot of writing about budget processes over the years because the cabinet document release.
Felicity:Yeah, you've got a good year coming up this year.
Paul:Yeah, yeah. There's there's a lot coming up. Now, unfortunately, they don't release everything on 1 January, but you do tend to get them used to be very slides, quickened up in the last couple of years. But that describes a very iterative process. And those of us who've worked on it know that, that the ministers, ministers, including the health minister who is an ERC member, when he has to sit on the other side of the table of ERC, probably walking back to his office pretty grumpy. Because in the context of a 5% prioritization demand, it's gonna be I think it's gonna be a very brutal process this year. So just everyone, no one should speak with any confidence.
Felicity:No, and you know, the the reality of the of the budget process is that you get that lovely letter that, like I said, it's correspondence, so Senator Patterson says, just let me know what how I have to describe something to be able to ask for it. Oh, that was so funny. But once you do that, we're we're in that process right now where initial you you have your big think pieces, like everything you think of could possibly come forward. Yeah.
Paul:Placeholders, all sorts of things.
Felicity:And so then you go into the process right that has been undergoing right now, is about taking that list of 500 ideas for this portfolio and reducing it to 300 ideas for this portfolio, uh, both spends and saves, based on what the expenditure review committee determines. And so people don't understand that's your first pass of the pro. So you you start with one list and then it truncates, and then you spend all of January fully costing those matters that you are allowed to still bring forward for the budget process. Thereafter you're negotiating, and things drop in and drop out again based on something. Some things just get automatically rejected through the ERC process. Some things evolve over the year based on, you know, there's a lot of things.
Paul:Yeah, ministers put stuff in knowing it's going to get knocked off. They need some sacrifices.
Felicity:And so you just need to any there is no guarantee at this point in time at all.
SPEAKER_00:Yeah.
Felicity:Uh this this is the real where the hard yards are done. I mean, this is where the community is putting in their budget submissions right now to say this is what matters to us and what doesn't matter to us.
Paul:And some poor, you know, EL1 has to read them all.
Felicity:And look, and you know, as I say to community groups and others, it's very important because that's that is your opportunity and you put it in. It shouldn't be anything that's a surprise that you haven't already s socialised with people in the past. But also I have watched multiple ministers in different portfolios and their staff go through and see the summary of the stuff and go, well, what is this and why is that? And you know, particularly when they're looking for for different ideas and different reforms. So um ignore it at your at your peril. But don't anything that you you can't commit something. So if I'm a bureaucrat or I'm in a minister's office, I cannot tell you anything is happening right now because there is a process under uh the the conventions of the budget process that Yeah, that's confidential and it forces people like advisors into the position of lying, and that that's kind of the job, you know, in a way.
Paul:But they they weren't unlike it like explicitly, you know, but you would never say Oh we definitely, you know, yeah, that's the you you would say things like well, you know, the budget process, it's an iterative process, and everything's everything's on the table for consideration, which is positive enough for any stakehold like a stakeholder can take whatever they like from that statement. But you've mu you've said nothing effectively.
Felicity:Yeah, this this is the time of year when you don't take anyone at face value.
Paul:No, you've got to be you gotta be careful. And for companies, I would suggest think about your own annual budgeting processes, which pretty can be my experience pretty fierce, and multiply it by a hundred. That that Mark Butler and his budget. My senior officials are going to be spending an enormous amount of time on this, particularly in the new year. But certainly, you know, think it's like an AFL pre-season, right? So the pre-Christmas time it's about getting some fitness in your legs, getting some match, doing a lot of running, you know, and then you start kicking the football in the new year. It's it's a bit like that, is how I would describe it. I don't mean to diminish it, but no one should speak with any confidence. Because you and I both experienced you at a much sharper way than me, the stuff gets pulled out at the last minute. Like your little six point six billion dollar package, the only thing they forgot to pull out was the footnote.
Felicity:They didn't forget, that was deliberate. That's the one thing I managed to say to send my smoke signal to the industry. I'm still doing this.
Paul:Yeah. So yeah, just exercise caution. Hey, ministerial travel.
Felicity:Yeah, I was gonna say, is um, you know, I'm I'm glad you're not a minister. What will people actually have to say?
Paul:This is infuriating to me. Yeah.$94,000 for three people to travel to New York on airfares for two days for a six-minute presentation at a sidebar event about the social media ban on under 16-year-olds, which we all know is going to be incredibly effective. But but I thought her defense at the press club was quite funny. I thought Annika Will should have said, Yeah, look in hindsight, I don't think it passes the pub test. And I have asked my department to look into that. So for those of you who don't know, every department has kind of big travel, like international travel team. Because they have to travel international. There's no I don't begrudge that. Should the CEO of the future fund be sending his executive assistants to check out hotels in Europe or America? I don't think so. Probably not. I want that job. Yeah, I want that job, but probably not. But uh but we all know airfares to the US are particularly expensive, but I I just think this is absolutely appalling. Absolutely appalling.
Felicity:It is, and it's you know, it's getting a lot of traction also because it was during the triple zero crisis in Australia and and dealing with that as a communications minister. I can't work out if you didn't have first class how you paid that much.
Paul:Like I went I went and had a look.
Felicity:Yeah, like it's just I tried really hard to spend that amount of money, yeah. And I I can't create the money.
Paul:And the issue is just Couldn't she have called the Chairman's Lounge Hotline or something to get a good deal or something?
Felicity:Oh you know, you're not like to do that. That's you're not supposed to use your influence. We've had that conversation, but I it was I think sometimes we find that people come to positions and influence an opportunity and it's like an entitlement, and it isn't really an entitlement. And that$100,000, let's think about what that could have funded. So that's the opportunity. You know how you know how PBSC always says opportunity cost? Well, what was the opportunity cost of that$100,000 in the budget? What was that? You know, people go, oh, it's just nothing, it's loose change, which, you know, when I was in finance, PBS people used to say to me all the time, well, it's just a rounding error. Yeah, your$5 million rounding error is the entire budget for a small statutory agency. So let's let's get real.$100,000 is something that can go into a programme, it's it's um allowing the indexation of the costs of you know, which you've written talked about, and uh the CEO of um Cystic Fibrosis Queensland has written about, you know, we're not we're not incrementalizing the the grants that they're getting to make sure that they can keep up with wages, etc. That's what that money covers. Did we really get so much out of that that that was the you know, if if you have to do the cost-benefit ratio, if that was the quality of life you gained under PBAC, would they have recommended it? No, they wouldn't.
Paul:Well let's be clear, the UN is a useful organization at best, hate-filled in a lot of ways. Yeah. And a side event to talk about a social media band that only exists within Australia's border. It's a complete waste of money. And my experience of this is the ministers don't just get to decide if they can travel overseas, it's a formal process. I think you generally write to the Prime Minister or the Prime Minister's chief of staff, and you've got to outline the costs and you've got to make a business case. It's like a company. So it's not just the minister who's at fault here, but she seemed to be making a virtue of it was a war because this we believe in transparency, so we release the information. Yeah, in response to an FOI, yeah, you didn't release the information, it was an FOI. And I wonder why, given that we can't know the gardening contracts of finance, why Qantas didn't, obviously, I presume it was Qantas. Why didn't they say, well, this was commercial inconfidence?
Felicity:And the and the hotels overseas, oh no, don't don't tell anyone else we charged you.
Paul:It's absolutely infuriated me. But there's a lot of that, you know, my view on travel is that when I travel, it's my money. Because I'm a business person, it's just taxpayer money. Yeah. And there's got to there would be very few things that would be a bigger waste of money than sending a minister and two staff to a sidebar event at the UN, even to the UN to be honest. So you just get to sit there and listen to all the hate field speeches. But it's it really infuriated me. But moving on, I I noticed, and we talked about it before uh before we started recording is that uh Mike Butler's out there doing a lot of press conferences today because he's gonna take over specialty practice, medical practice, apparently.
Felicity:Get on him, you might want to really focus on that constitution. But anyway.
Paul:Uh and he was asked about Bixero, the mening cockle B vaccine.
Felicity:Ugh, something I've been doing.
Paul:And he asked and he said he wanted the company to make another submission. I think they've made three or four.
Felicity:They have.
Paul:I think the final one was recommended for uh Indigenous children. Indigenous children. And nobody else, I think. I think anybody else gets it. And he's urging them to make a a new submission based on updated advice from another advisory committee, which I assume he was referring to Otagi. Uh hang on Otagi recommended Bexero for inclusion in the NIP ten years ago. It's at their first the first time they considered it, I think they said yes, it should be on. Yes. They fund it in New Zealand. Yes. That's the that's the test. Like if they fund it in New Zealand and we don't, what's wrong with it? What's what's wrong with us, Bard? Yeah. It's HTA and vaccines. Like down what down steps are to my basset hounds.
Felicity:Yeah, but it's also like I said, what what concerns you about it, and it was a bit like a lot of what was uh the positioning in in estimates, which is, you know, it's all about the companies and it's all about this. The misrepresentation of what the blockages are in the system, the the demonization of providers of devices, diagnostics, pharmaceuticals, vaccines. We've got to stop allowing that to happen, and we've got to call the cods wallop. The minister misrepresented what's been going on here. Yes, he did. That that was, you know, and he's done that a bit. I'm sorry. Now, whether it's because he's given poor advice or he thinks he can get away with it, I don't know. I like to think that he's been given a poor briefing. We saw it when um uh insulins were delisted as part of uh the catch-up price reductions, and the information he put out there about the process and the company was incorrect. We get systemic misrepresentations of the purchaser-provider relationship in this part of the health system, and we've got to start calling it out.
Paul:I always need to challenge it, though.
Felicity:Yeah, I know they do, because the likes of you and me always calling it out is just you know, the minister rolling his eyes when he sees you going, Goodness gracious me, what's she gonna say today?
Paul:Yeah, they're criticising me again.
Felicity:Yeah, as opposed to why couldn't you just be honest and say this is something that you know has been recommended for over you know a decade and with hindsight and what else is going on in the community and the increasing rates, we're gonna have a look at it again. I mean, at least, you know, under successive governments when we had the problem with access to hooping cough vaccines for herd immunity and and different uh examples of you know parents, grandparents, etc. I really respected the governments both federally and state levels, the the ministers in that space and the the bureaucrats just going, Well, we're looking at different things. This is what we've had, this is where we're moving. But don't don't pretend, don't I really am concerned about this whole them and us, the the the evil big global of whatever versus the poor little Australia.
Paul:Yeah, because these officials are doing their jobs for free too.
Felicity:Yeah, exactly.
Paul:No, they're not getting paid. I I thought Blair Comley's comment yesterday. I don't look if he genuinely believes what he said about commercial decisions made by pharmaceutical companies, during the MFN discussion he said, Well, you know, these are commercial decisions made by companies. Most most of these products are made at very low cost.
Felicity:Oh, that was dog.
Paul:That's your understanding of how companies operate. And if if that's true, uh maybe there was a bit of a Maybe he just moved the GBMA. Yeah, but if that's if that's is that really your understanding? If your understanding is that companies are making these biologics at super low prices and then asking for high reimbursement prices, why are there so few biosimuls? Well, like there are there are multiple biologics of patent from very high profile ones for which there are no biosimuls. But it's why is that exactly?
Felicity:But it's also the point of you know, oh well, we we are only one to two percent of the world, but you you know, you you you're producing so much anyway, you might as well just, you know, give us the crumbs off the table and give it to us at a cheap price. You know, we have looked at what MFN means. If you are obliged by the US government to disclose the actual price you sell for in Australia, then you cannot list it. But second of all, I'd like to remind the Secretary to perhaps read the experience of of COVID-19. I know we I know we haven't done a Royal Commission into that. But what happened when that attitude was taken into getting access to a vaccine where we were we missed the first round of first in a round of 58 and moved to first in a queue of two ahead of New Zealand. Because that kind of approach, which is you'll just give us some extra, it's all good, it's all cheap and area. No, it's not.
Paul:We don't understand when it's like trying to get into a nice golf club. You know, so you gotta you you you've got to make an effort. And I thought their comments on that, his comments on that yesterday, I have to I have to believe he understands it's more complex than that. And I have to believe the industry have tried to explain to him how this the complexity of global pricing. But we will see. All right, Felicity. Alright, Paul. Well, thank you. That was a good conversation. As the estimates was the stuff about bulk billing, trying to get the the annual, it's like searching for Smurf berries.
Felicity:Yeah, I'd just like to remind everyone that if you read the um impact analysis, it does say that in 28-29 the the the target was 87.8%. So I don't understand what the partner couldn't say that.
Paul:I understand why they were so reluctant. We got in the last 48 hours, is it gonna get formal further nationalization of medical practice in Australia? And I the fact that the doctor groups are not going to the mattresses on this, it's still it's gobsmacking. It is. When they were talking about setting up government funded competitors to private clinics, and Senator Ruston was saying, Well, you know the private clinics is a family business.
unknown:Yeah.
Paul:I was like, well.
Felicity:These are small businesses. Like dentists are small businesses, like so many are small businesses. But look, my final favourite moment of estimates, which also relates to my weekend this weekend, is Senator Canavan asking the Secretary of Transport about whether he agreed that there was a conspiracy against Oscar Phiastrians.
Paul:That was AI. I didn't even realise that was real.
Felicity:No, that's real, man. That's totally real. So um it's good to know that in the very serious world, at least there was an honest answer and full transparency.
Paul:Yeah, there were some funny moments in estimates this morning. The James Patterson stuff trying to get hold of it's not a letter.
Felicity:It was a letter. So it was it was attached to an email, so it was correspondence, it was a letter. Okay.
Paul:We all know we had responsibility, but I pass a responsibility, but now that responsibility has shifted, and that is nomenclature matters. Yeah, okay. Uh thanks everyone. Uh I uh there's probably a lot of Christmas parties going on. I know a lot of people don't call them Christmas parties these days. They're idiots, they are definitely Christmas parties, uh, and it's something we're celebrating. And I love the Christmas decorations, and I love the fact that Christmas is coming back. There's a bit of red and green. You know, when they went through the drab period of Christmas decorations where it was just shocking. That thankfully has all gone and we got some colour back.
Felicity:Go the reindeer. Yay, Santa.