To: Parliamentary Secretary for Health
Ethical Promotion of Therapeutic Goods
Dear Mr (Mark) Butler,
Before you meet with therapeutic industry associations next week to “discuss their respective codes and consider potential strategies for a way forward”, may I suggest you review the performance and behaviour of the prosthetics sector? Up until about eight years ago (until a review chaired by Peter Baume) the list prices of all brands of coronary stents were remarkably similar, at around $2500. You need to find out whether the “deregulation” achieved its aims of lower prices for consumers under competitive purchasing.
You refer to incentives being offered to promote sales, but it’s not so simple. You need also to appreciate the dynamics of hospital business. Do you have knowledge, for example, of whether surgeons and other procedural specialists have ownership interests in private hospitals? Do you know whether any surgeons, most of whom do operate in the private sector, have major influences on purchasing in those public hospitals where they are on the staff?
Until you understand how the real world of private medicine works, you have no hope of intervening on behalf of the tax-paying public in order to curb unethical practices. Let me paint out a scenario. Mr Sawbones is part owner of Punterville Private Hospital. He does lots of hip replacements and most of his customers come in under the BHA-preferred logo. A prostheses maker comes along and offers to sell 100 of their hips for the same price he is paying for his current model, but he will get 10 more for free. Sawbones is also head of the orthopaedic unit at Punterville Public. At the next meeting of staff, a strong recommendation is carried through to the hospital administration that the new model of hip has features that make it a better choice.
Mr Butler, under the proposed Medicare Select proposition (according to APH library website) –
The Commission outlines three main arguments in favour of introducing Medicare Select in the Australian health system. They are:
- it would empower consumers. This competition would encourage plans and health care providers to respond to consumers’ needs and preferences
- it would encourage plans to find more innovative ways of delivering and funding the highest quality care. If they did not, they would find it hard to attract and keep members, and
- it would stimulate health service providers to deliver the highest quality for the most efficient price. If they did not, they would not attract members or win contracts with plans.
I put it to you that your proposed regime of allowing the ‘therapeutic goods industry’ to act under their own codes of conduct, in effect, to self-regulate, is a backward step if the Government wants to bring purchasing power closer to the consumer. Your plan will ruin public confidence in the TGA and rip the guts out the whole idea of Medicare Select.
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