Australians will be offered respiratory vaccines from next year without the usual assessment that ensures they are the most effective available at the best possible price, under the confidential $2bn onshore manufacturing deal the Morrison government struck with Moderna.
The agreement exempts Moderna’s mRNA vaccines from assessment by the Pharmaceutical Benefits Advisory Committee, a government memorandum has revealed.
The contract signed with the American pharmaceutical company in 2021 commits successive Australian governments to buying locally produced Moderna vaccines for at least a decade.
The vaccines will be manufactured at a specially built plant at Melbourne’s Monash University, which was opened by the health minister, Mark Butler, and the Victorian premier, Jacinta Allan, last week.
The existing check-and-balance system normally applies to all but the most urgently needed and highly specialised vaccines.
Before the plant opened, the federal government issued a regulation – which can be disallowed by the Senate – to enshrine the deal it inherited in law. The accompanying explanatory memorandum sheds new light on the secretive contract, including its exemption from assessment by the PBAC.
Comprised of medical experts, the PBAC is a key step in ensuring government-purchased vaccines are confirmed as the safest and best quality for their required task, at a reasonable price.
The memorandum says the Moderna vaccines “will not go through the … PBAC process and therefore will not be listed as designated vaccines on the National Immunisation Program”. PBAC assessment is required for inclusion in the program, now the vehicle for providing vaccines to Australians free of charge.
Under the Moderna deal, the government will pay an undisclosed price for an undisclosed percentage of the up to 100m vaccine doses to be produced at the plant every year.
The Australian National Audit Office announced last month it would investigate the deal.
Moderna said a new assessment process was being created for its vaccines replicating elements of the existing one, which has been criticised for taking too long to get vaccines to the distribution stage.
They emphasised the PBAC did not currently examine every approved drug or vaccine.
“All products manufactured under Moderna’s partnership are subject to the same rigorous standards of quality, safety and efficacy as other vaccines,” the spokesperson said, pointing to registration by the Therapeutic Goods Administration (TGA) and assessment by the Australian Technical Advisory Group on Immunisation (Atagi).
“They are also [to be] assessed through a rigorous independent Health Technology Assessment (HTA) consistent with PBAC guidelines.”
After checks by the TGA and Atagi for safety and efficacy, other vaccines undergo PBAC assessment against comparable products to determine relative benefits, side effects and cost.
The switch to an apparently parallel system for Moderna – which has not been publicly explained – has raised red flags in the health sector.
The PBAC has expressed concern about government proposals to change the system more broadly to make it faster and more effective.
The committee’s chair, Robyn Ward, wrote to Butler in October warning that moves aimed at speeding up the distribution process “should not come at the expense” of the other objectives, “including fairness, equitable access, and safe and judicious use of medicines”.
Ward emphasised that the PBAC considered “broader societal and consumer perspectives” within its processes “and thus advises against making exceptions for some groups by funding products that have not received rigorous evaluation”.
A spokesperson for Butler said “specific approval processes have been negotiated for domestically manufactured mRNA vaccines” to prepare for future pandemics.
“These approval processes guarantee the safety and effectiveness of the vaccines.”
The spokesperson said the Moderna agreement included “the determination of price” but that its terms and conditions were commercial-in-confidence.
Peter Collignon, an infectious diseases professor at the Australian National University, said the PBAC stage was crucial because it compared vaccine quality and involved a cost-benefit analysis, ensuring value for taxpayers’ money.
He said not every approved drug would be right for the general population and he feared the opaque arrangement with Moderna “muddies” the process.
“This is sort of bypassing that to a large degree, which I think is problematic,” Collignon said.
The Moderna mRNA vaccine deal was forged during the Covid-19 emergency but has been extended to cover all respiratory vaccines produced onshore and registered through the TGA – including any for influenza and respiratory syncytial virus, or RSV.
The rival Australian vaccine manufacturer CSL is concerned about the implications, including for its own domestically manufactured competitor vaccines which are subject to the PBAC process.
The international executive medical director of CSL Sequiris, Dr Jonathan Anderson, said: “The proposed regulation is deeply concerning because we risk creating two systems for the National Immunisation Program (NIP) without the usual comparative assessments of clinical and health economic data.
“If we don’t compare vaccines using the same transparent processes, we risk eroding trust that our funded programs will give access to the best vaccine at a good price for the taxpayer.
“We need to have this discussion now so we can protect our robust system.”
CSL has raised previous concerns about how the Moderna deal was struck, prompting the ANAO investigation, which will aso examine a vaccine contract with CSL. Butler told journalists on Monday that Labor in opposition broadly supported the onshore manufacturing deal which was “a significant addition to sovereign capability”.
“Although we weren’t across the commercial terms of the contract for very obvious reasons, at the time we indicated an intention to honour that contract, as we do so many other contracts … that endure beyond the change of government,” Butler said.
The chief executive of the Consumers Health Forum, Elizabeth Deveny, said attracting global pharmaceutical research partners was essential but the interests of Australian consumers and manufacturers should be paramount.
“Public investment must translate into public health, not profit,” Deveny said. “So we don’t want any inflated costs or restricted access or shortcuts … through not going through our normal regulatory and quality control processes.”
Medicines Australia represents the pharmaceutical industry. Its CEO, Liz de Somer, said industry supported sovereign manufacturing and research, but existing legislated checks underpinned Australia’s global reputation.
“These systems should not be disregarded as we build local capability, as doing so could create an unlevel playing field,” she said.
