Australia's Pharmaceutical Benefits Scheme Puts Damper On Roche's Avastin Sales

PERTH, Australia - Sales of the top 20 cancer drugs in Australia totaled $545 million in 2008, representing a growth rate of 30 percent since 2005, according to a recent Datamonitor report.

"The Australian oncology market's high value and growth opportunities have made it an attractive arena for drug developers to enter," the report notes, adding that the growth is expected to slow down considerably during the next 10 years, mainly due to maturing markets and the entry of generic products. Still, revenues are expected to reach $1 billion in 2018.

Molecular targeted therapies were the leading class of cancer therapies among the top 20 in Australia with sales of $320 million in 2008. In fact, targeted therapies were responsible for most of the overall growth seen between 2005 and 2008, driven by the increased uptake of high-priced products and a lack of generic competition.

Datamonitor forecasts that molecular targeted therapies will continue to drive growth in the oncology market in Australia over the next decade. While revenues of cytotoxic therapies and antihormonal treatments classes will reach $200 million combined, the targeted therapies class is set to grow to $750 million in 2018, according to the report.

Top-seller Herceptin Sees Exceptional Reimbursement Under PBS

Roche's targeted breast cancer drug Herceptin (trastuzumab) was the highest-selling Australian treatment in 2008, with sales of $120 million, representing an annual growth of 61 percent. Breast cancer is the leading cause of cancer in women in Australia, which accounted for 27 percent of all cancer diagnoses in women, Datamonitor Senior Healthcare Analyst Lisette Oversteegen told PharmAsia News.

The human epidermal growth factor receptor for the HER-2-positive breast cancer market received an exceptional reimbursement status both within and outside Australia's Pharmaceutical Benefits Scheme (PBS).

When Herceptin initially came on the market in the late 1990s, Australia's Pharmaceutical Benefits Advisory Committee initially rejected the drug for reimbursement "because of the high cost of the drug," Oversteegen said. "But there was a lot of media attention around that, and the government caved in and created 'The Herceptin Program,' which funded the drug outside the PBS in 2001.

This funding mechanism outside the PBS is "very unusual because normally if you get a prescription drug in Australia, it is reimbursed by the government PBS," she said. Under the Herceptin Program, patients are reimbursed "under strict circumstances" for metastatic breast cancer.

Herceptin is, however, reimbursed by the PBS for early-stage breast cancer as a "special authority" program, which is a common practice. Herceptin was covered for early breast cancer under the special authority program in October 2006; before that time, the PBS covered Gleevec, which is no longer covered for early breast cancer, she said.

After much heated debate, New Zealand's Ministry of Health overturned the Pharmaceutical Management Agency's decision to decline funding for 12-month treatment of Herceptin for HER-2-positive early breast cancer treatment (Also see "New Zealand Ministry Of Health Overturns PHARMAC Decision To Decline Funding Roche 12-Month Herceptin Treatment: New Zealand Regulatory Roundup" - Scrip, 10 Dec, 2008.).

Although Herceptin's sales will continue growing in the near future due to its popularity in the breast cancer market and an approval in HER-2-positive gastric cancer, its revenues will be somewhat dampened by the uptake of GlaxoSmithKline's Tykerb (lapatinib), which has the advantage of oral administration, according to Datamonitor.

Not yet approved by Australia's Therapeutic Goods Administration, Tykerb will most likely be approved and will probably result in a PBS listing for first-line and adjuvant treatment, placing it in direct competition with Herceptin, Oversteegen said. She also noted that it is uncertain for which indication Tykerb will ultimately be approved.

Avastin Slow To Get Reimbursed In Oz

Meanwhile, Roche's Avastin (bevacizumab), while reaching sales of $2.5 billion in 2008 in the U.S. alone, is not seeing strong uptake in Australia due to a lack of reimbursement in three of its four indications, leading to sales of just under $8 million. Its only PBS listing so far is for first-line treatment of metastatic colorectal cancer, which took place in mid-2009, nearly one year after it was recommended to be funded. That delay was likely due to price negotiations, according to Oversteegen.

An earlier submission had been rejected over concerns that Avastin would be used off-label and would therefore have an unacceptably high cost-effectiveness ratio.

Avastin sales are predicted to reach $190 million by 2018 due to aggressive indication expansion. Besides colorectal cancer, the drug is also approved by the TGA for breast cancer, non-small cell lung cancer and renal cell carcinoma.

"Assuming the Pharmaceutical Benefits Advisory Committee will not create too many hurdles on its path to reimbursement for these additional indications, Avastin is expected to become the second-highest selling cancer drug in Australia by 2018 behind [Roche's] Rituxan/MabThera (rituximab) ... with revenues of $225 million," according to Datamonitor.

- Tamra Sami ([email protected])