The global drug giant AstraZeneca has launched legal action against 17 members of the powerful Pharmaceutical Benefits Advisory Committee, as well as the Minister for Health.

The committee of independent advisers makes recommendations about which medicines get listed on the $8 billion dollar Pharmaceutical Benefits Scheme, and its decisions can have major impacts on a drug’s profitability in Australia.

It is uncommon for drug companies to take legal proceedings against individual members of the committee, and the action’s been slammed by a leading drug expert as “intimidation”.

There's more to Crikey than you think.

Get more Crikey for just $199 $99.

Subscribe now

“Taking legal action against individual committee members is an attempt at individual intimidation,” says Dr Ken Harvey, adjunct senior lecturer at La Trobe University. “Members of this committee are acting in the government and community’s interest and they should not be subjected to such malicious conduct.”

AstraZeneca will not comment while the matter is before the court, but I understand the company believes its pursuing appropriate legal process.

The government is also declining to talk, but Federal Court documents show the company is challenging a committee decision about its blockbuster cholesterol-lowering drug Crestor — one of AstraZeneca’s biggest products, generating annual global sales of $4.5 billion. Taxpayers in Australia spent about $300 million last year on this drug alone.

Technically, the company is challenging the recent committee decision to treat Crestor as “interchangeable” with a competitor drug called Lipitor, a decision that will reduce the price the government pays AstraZeneca because Lipitor comes off patent earlier than its drug.

While the company claims the drugs aren’t “interchangeable”, other independent bodies, including Australia’s Therapeutic Guidelines group regards many of the cholesterol-lowering drugs as being therapeutically equivalent and as equal first choices for patients.

The big money Australia spends on cholesterol drugs is becoming something of an international embarrassment, as this class alone accounts for about 16% of the total $8 billion scheme, a dramatically higher proportion than in some other countries.

Earlier this year, a Medical Journal of Australia study revealed we were paying far higher prices for these drugs than England, in one case more than four times as much. University of Sydney researchers estimated we could have saved almost $2 billion over five years, if we’d adopted English policies on pricing and generic drugs. Looking forward, the researchers predicted Australians could save $9 billion in the coming decade.

More broadly there are questions about the appropriateness of prescribing so many powerful, costly and potentially dangerous drugs to treat many essentially healthy people, who are simply at risk of future illness. While many doctors fail to mention it to their patients, this class of medicines can carry the risk of rare but very serious muscle damage.

Astute policy makers might identify more rational drug policies as a win-win — saving money and improving health — but they will immediately bump up against the extraordinary political power of this trillion-dollar industry.

Listed in London, New York and Stockholm, AstraZeneca employs more than 60,000 people and has annual sales of $32 billion. Coincidentally, news of the Australian court case came just days after the company’s chief executive reportedly spoke publicly about the need for the pharmaceutical industry to restore public trust.

*Ray Moynihan writes regularly for the British Medical Journal. His most recent book is S-x, Lies & Pharmaceuticals, more here.

There's more to Crikey than you think.

It’s more than a newsletter. It’s where readers expect more – fearless journalism from a truly independent perspective. We don’t pander to anyone’s party biases. We question everything, explore the uncomfortable and dig deeper.

And now you get more from your membership than ever before.

Peter Fray
Peter Fray
Editor-in-chief of Crikey
Get more and save 50%