The role of pharmacoeconomic guidelines for formulary approval: the Australian experience

This paper provides a review and critique of the recently introduced Australian Guidelines for the Presentation of Submissions to the Pharmaceutical Benefits Advisory Committee (Guidelines), which require pharmaceutical companies seeking recommendation for national formulary listing and subsidization to provide a detailed economic analysis to support their case. As Australia is the first country to mandate such a requirement, it is important not only to consider the details of the Guideline's requirements for economic analysis and the expectations of the authors, but also to consider, from both theoretical and practical perspectives, whether the Guidelines are appropriate for drug evaluation purposes. Although the Guidelines have raised the level of awareness of the need to integrate economic analysis into the formulary approval process, their contribution as a model for other jurisdictions must be qualified by the prescriptive and unduly narrow view that is taken of allowable analytical techniques. By forcing drug evaluations into a straightjacket, the Guidelines run the risk of undermining the credibility and contribution of economic analysis to formulary decisions.