A staggering but implausible saving from digitisation

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The Department of Health claims the digitisation of its health technology assessment processes will save the biopharmaceutical and medical device sectors a staggering but implausible $157 million every year.

The number has been reproduced in the third consultation paper for the planned reform of the Prostheses List (PL) but the claimed saving relates to all HTA committees. The PL is the framework under which the federal government mandates the private funding of medical devices.

According to the paper, "The HPP [Health Products Portal] will provide significant regulatory savings to industry, across a range of categories which build on each other over time to realise cumulative benefits.

"Once the project is fully implemented, the estimated savings to the pharmaceutical and medical device industry will be around $157 million annually. This estimate is based on digitisation of approximately 8,000 interactions per year between industry and government."

It means the claim is based on the pharmaceutical and medical device sectors saving an average $20,000 on each digitised interaction equating to around $600,000 every day.

The claimed figure saving has 'amused' both sectors given their aggregate spending on health technology assessment interactions with the government is likely a fraction of the $157 million claimed savings from the digitisation process.

The claimed savings, calculated by the agency responsible for assessing the economic impact of new health technologies, equates to almost $1.6 billion over ten years.

Sources in both sectors told BioPharmaDispatch they were unaware of how the figure was calculated.

However, in response to questions, the Department of Health said, "The Health Products Portal (HPP) is being expanded to include the receipt of applications for the Pharmaceutical Benefits Advisory Committee (PBAC), Medical Services Advisory Committee (MSAC), the Prostheses List (PL) and the National Immunisation Register. The saving to companies of $157 million is calculated based on companies having streamlined access to the HPP for all of these committees and not just the PL.

"The Australian Government invested $503 million in the 2021-22 Budget to transform digital health in Australia, resulting in a modern, integrated health system. This investment includes $36 million for streamlining reimbursement approvals for health products through the HPP. This will create a streamlined application process for PBAC, MSAC and PL applications and faster patient access to new therapies and treatments. By digitising the application and assessment processes for the PBS, MSAC and PL applications, the pharmaceutical and medical device sector will save around $157 million each year. This will save approximately 400 companies (across the pharmaceutical industry, medical colleges, device manufacturers, diagnostic and other technology companies) time and money by digitising an estimated 8,000 interactions they have with Government each year."