With the Zimmerman inquiry being told the PBAC is not up to scratch on delivering medicines to Australian patients, a ‘thinking outside the square’ option being pioneered by local pharmaSpecialised Therapeutics (STA) appears to be blazing a new funding trail.

STA has today announced that, after “six frustrating attempts” to secure government reimbursement for a cancer diagnostic without success, it has won backing from the private sector that will support patients financially while it continues to seek public funding.

The company has struck an agreement with Latitude Finance so breast cancer patients can access the Oncotype DX test, “which has been shown in large randomised clinical studies published in leading medical journals to identify the majority of breast cancer patients who do not benefit from chemotherapy”.

“Under the terms of the new agreement, Australian women who decide to take an Oncotype DX Breast Recurrence Score test can now use an interest-free two-year payment plan to help afford the $5000 one-off test,” STA said.

“We have tried on multiple occasions to have this test reimbursed for Australian women. These efforts are ongoing, but we trust that in the interim, this new third-party finance arrangement will help many breast cancer patients afford this important technology which in turn, may help them to avoid chemotherapy,” STA CEO Carlo Montagner said.

“As a company and a community, we must find new ways for all Australians to access new therapies and technologies that are recommended by their specialist doctors but are not reimbursed.

This is a step in the right direction. STA is proud to partner with Latitude Finance, which has an established presence in healthcare and is now extending its offering in this space due to strong patient demand,” Montagner added.

The Oncotype DX test is marketed in Australia by STA under exclusive license from US-based Exact Sciences and is appropriate for women who have been diagnosed with early breast cancer, whose cancer is hormone receptor positive, HER2 negative and has up to three positive lymph nodes, STA said.

“Without federal government funding and without accessible personal savings, hundreds of Australian women have been unable to afford this important test,” Montagner said.

Interest-free payment plans to access the Oncotype DX Breast Cancer Recurrence Score Test become available from today, STA said.

Click on the video banner above to watch CEO Carlo Montagner discuss STA’s 2020 Employer of Choice award on Ticker News.

For more information visit https://employerofchoiceawards.com.au/eoc-winners-2020/specialised-therapeutics-2020-eoc/

The owner of Australia’s largest independent pharmaceutical company says changes to PBAC fees mean small companies need to budget almost $2 million to make a submission for a medicine to be listed on the PBS, with no guarantee of success.

In a submission on new fees being introduced as part of PBS process improvements, Specialised Therapeutics Australia CEO Carlo Montagner said the proposed fee hikes due to take effect on 1 July presented “a major barrier” to PBS access for small, independent pharma companies like STA.

“These fee increases will mean the cost of submitting a major submission is now well in excess of $300,000 – irrespective of whether the application is successful,” Montagner said.

“STA has estimated that the combination of fee increases, new fees for various processes and internal costs of submission preparation will mean that the real cost per submission is approaching $750,000.

“Considering that it typically takes several submissions to achieve a PBS listing, companies need to budget almost $2 million for a
single submission, with no predictability that the submission will be successful or commercially feasible if onerous listing conditions are mandated by the PBAC.”

Montagner argues large, multinational companies are more able to bear the upfront cost of larger fees while for smaller companies, they “potentially mean the financial risk is simply too great, especially when the outcome of a PBAC submission is highly unpredictable”.

The STA submission proposes companies like STA with annual revenues of less than $50 million be granted an exemption from paying new fees ‘upfront’ for at least the first two PBAC applications, instead paying back the cost in instalments after a successful PBS listing and earnings of more than $3 million a year.

Montagner says STA’s experience was that demonstrating statistically significantly improved survival data and furnishing positive funding recommendations from key overseas agencies did not guarantee success at PBAC.

In the past year, STA has twice submitted unsuccessfully for breast cancer drug Nerlynx and also twice for myeloma therapy Aplidin at a combined fee cost of almost $1 million. The outcome of its second Aplidin submission will be released next week.

He said the proposed fee hikes, such as the $238,230 fee for the facilitated resolution pathway and the $72,000 cost of an associated facilitated workshop, “appear exorbitant”and “seem disproportionate to the work input required by the Department of Health”.

STA supported a call by Medicines Australia for an independent audit of the proposed charges, with Montagner saying “more clarity is required”.

Montagner says while “there will always be risk when it comes to bringing new medicines to market”, “the reality is that with the new fees and increases to existing fees, pharmaceutical companies will be spending in excess of $3 million for every drug they try to list”.

“It’s a vast amount of money when there is no definitive predictor of listing success that a company can rely on to determine the degree of investment risk.”

Orphan drugs hardest hit

Montagner says orphan drug submissions will be particularly adversely impacted by the proposed fee hikes as their potential PBS revenue is insufficient to justify the multi-million dollar outlay required to submit them to the PBAC.

“I would like to propose that the first two PBAC submissions for orphan designated drugs are fee exempt, with a further minor submission included (if this is required following an unsuccessful second major submission),” he says.

Montagner says when the full impact of the July 2020 PBAC fee increases is realised in two to three years, small Australian-owned companies like STA “will not be able to take on the financial burden and associated risk to bring these new medicines to Australia”.

“Ultimately, this means that patients will miss out, because the international drug development companies STA partners with to make these therapies available do not have an established presence in this region.

“Of most concern is that Australia will end up like New Zealand, where many companies no longer submit products for regulatory approval due to the low probability of achieving reimbursement.”

Specialised Therapeutics Australia says proposed further increases in PBS submission and listing fees are “prohibitive” for smaller companies and risk becoming a “major barrier” to patient access to new medicines.

The Department of Health recently announced new and higher cost recovery fees for new vaccines and medicines that will be implemented from mid-2020. They build on the range of fee changes implemented from mid-2019.

Specialised Therapeutics Australia (STA) is a privately owned pharmaceutical company led by Carlo Montagner.

“Our mission has always been to fulfil unmet medical needs – we do not in-license ‘me-too’ therapies where there is a comparable competitor already in the market,” said the company in its submission on the proposed fees.

“All products in our portfolio are carefully and prudently selected for the incremental clinical benefit they provide, particularly to smaller patient populations. Typically, we partner with smaller European or USbased biotech companies that do not have a presence in our region. Therefore, if STA did not partner
with these companies, their products would not be available to patients in Australia,” it said.

The company said it backs the concerns raised by Medicines Australia.

“These fee increases will mean the cost of submitting a major submission is now well in excess of $300,000 – irrespective of whether the application is successful,” it said.

“STA has estimated that the combination of fee increases, new fees for various processes and internal costs of submission preparation will mean that the real cost per submission is approaching $750,000.

“Considering that it typically takes several submissions to achieve a PBS listing, companies need to budget almost $2 million for a single submission, with no predictability that the submission will be successful or commercially feasible, if onerous listing conditions are mandated by the PBAC.”

It said the cost of making a submission is “increasingly prohibitive” but that they present a “major barrier” for independent and privately-owned companies like STA.

“While these commercial considerations are matters for all pharmaceutical companies, larger multinational companies have far greater financial resources to bear this cost upfront,” it said.

It continued, “For smaller companies in this industry with a turnover of less than $50 million annually, these increased costs will potentially mean the financial risk is simply too great, especially when the outcome of a PBAC submission is highly unpredictable.”

The company highlighted its “own experience with recent major submissions” where it said high-level of evidence and improved outcomes for patients had still resulted in rejections.

It pointed to its submissions on breast cancer therapy NERLYNX (neratinib) and myeloma therapy APLIDIN (plitidepsin).

“Even based on the older fee structure and levels, these four applications have cost our company almost $1 million in fees,” it said, adding the new fee structure means pharmaceutical companies will be spending in excess of $3 million for every medicine they try to list on the PBS.

STA backed an independent audit of the changes and proposed special consideration for companies with annual revenues of less than $50 million.

“I am respectfully requesting that smaller companies with revenue <$50M annually be granted an exemption from paying new fees ‘upfront’ for at least the first two applications, and when, or if, a drug is listed on the PBS, the company then pays those fees in arrears, in instalments when PBS expense on that drug exceeds $3M per year.”

On orphan drugs, STA said, “While the PBAC provides an exemption on the initial PBAC submission for drugs that have been orphan-designated, this is not the case for subsequent submissions.

“As stated earlier, it typically takes two to three submissions for a drug to receive a positive PBAC approval.

“Given this statistic, we are now faced with a real barrier for orphan drugs to be PBS listed as the likelihood of success in the only fee exempt round (first submission) is low, and the revenue that would be generated by the orphan drug insufficient to justify the multi-million dollar outlay required for subsequent submissions.”

The company proposed that the first two PBAC submissions for orphan designated drugs should be fee exempt with a further minor submission included.

Government denies funding to help avoid chemo

A $5000 test that can indicate whether a breast-cancer patient needs chemotherapy has been rejected for a government subsidy even though it could potentially save thousands of women from having to undergo the harrowing cancer treatment.

The Federal Government’s Medical Services Advisory Committee said there was not enough evidence to support a Medicare rebate for the test.

But breast cancer support groups are furious with the decision.

And US breast cancer expert Dr Eric Winer, from the Dana-Farber Cancer Institute in Boston, said he was “shocked” by the MSAC decision.

In the US, all insurers paid for the genetic test for women with HER2-positive breast cancer when the cancer had not spread to the patients’ lymph nodes, he said

“I think it’s a mistake,” he said. “To put it simply for a sizeable group of patients the decision tools you have will continue to be from the year 2000, instead of taking advantage of new tools for treatment decision.”

The Oncotype DX test analyses 21 genes from a breast tumour and can help predict the risk that a woman’s breast cancer may recur, and the likely benefit chemotherapy may have in reducing that risk.

Specialised Therapeutics performs the test in a single laboratory in the US and it has not been approved for use by regulatory authorities such as the US Food and Drug Administration nor by the Australian Therapeutic Goods Administration.

A clinical trial of 10,273 women with breast cancer found nine years after diagnosis the rate of disease-free survival was similar for women with a mid range score in the gene test. Disease-free survival for those who received hormone therapy only was 83 per cent compared with women who received both hormone therapy and chemotherapy (84.3 per cent).

Specialised Therapeutics Australia Pty Ltd had applied for public funding of the Oncotype DX test in Australia but MSAC rejected the application on Thursday night.

A spokeswoman for Breast Cancer Network Australia said they were disappointed the test had been rejected. “We urge the companies supplying these tumour profiling tests to get together with the Government to find a way forward,” BCNA chief executive Kirsten Pilatti said.

Rejection angers support group

A $5000 test that can indicate whether a breast cancer patient needs chemotherapy has been rejected for a government subsidy, even though it would mean thousands of women could avoid the harrowing treatment.

The government’s Medical Services Advisory Committee said there was not enough evidence to support a Medicare rebate for the test.

Breast cancer support groups are furious with the decision, which has also shocked at least one US expert.

“I think it’s a mistake,” Boston’s Dama Faber Institute expert Dr Eric Winer said. In the US, all insurers paid for the genetic test for women with HER2-positive breast cancer when the cancer had not spread to the patient’s lymph nodes, he said.

The Oncotype DX test analyses 21 genes from a breast tumour and can help predict the risk that cancer may recur and the likely benefit chemotherapy may have in reducing that risk.

The test, performed in a single lab in the US, has not been approved by authorities such as the US Food and Drug Administration, nor by the Australian Therapeutic Goods Administration.

Specialised Therapeutics Australia Pty Ltd applied for had public funding of the Oncotype DX test in Australia but was rejected this week.

MSAC advised that the evidence “did not give the committee confidence that the test would identify those patients who could safely avoid chemotherapy”.

Breast Cancer Network Australia was disappointed the test had been rejected. “If we can identify those people who will benefit from not having chemotherapy, it is essential that we save them from over-treatment,” CEO Kirsten Pilatti said, adding chemotherapy has significant long-term impacts on patients’ health.

Kari Svensen (pictured) was able to afford the genetic test when diagnosed with breast cancer five years ago. The now 73-year-old from St Ives said it found she didn’t need chemotherapy and instead she underwent radiation treatment — and is still cancer-free.

“I fervently wish this test was available to all Australian women,” she said.