GSK threatens to withdraw its r&d investment

Pharmaceutical giant GlaxoSmithKline (GSK) has warned that Australia risks losing millions of dollars in r&d investment because of a lack of transparency in how drugs are listed on the nation's A$4bn Pharmaceutical Benefits Scheme (PBS).

GSK is reviewing the allocation of its US$7bn (€5.9bn) worldwide research budget, and has told an Australian Senate committee it is considering reducing its A$30m ($20m) annual r&d commitment to Australia. The move follows lengthy delays in listing a new diabetes drug on the PBS despite the drug being recommended for inclusion by the government's Pricing Advisory Committee two years ago.

GSK government affairs manager Catherine McGovern told the committee the lack of transparency in how and why drugs are being listed on the PBS had adversely affected international perceptions of Australia as a location for r&d. The dispute comes as the government is struggling to contain an explosion in the cost of the PBS, prompting concerns that some drugs are being held back due to budgetary constraints.

This was apparently confirmed when health minister Kay Patterson said the drug had not been listed due to concerns that it would be overprescribed. She said: 'The recommendation from the PBS Advisory Committee is only to make the drug available for very complex cases where other treatments have failed. I am advised, however, that strong demand outside the defined patient group means substantial use of the drug would occur.'