Australia’s PBAC Submission Guidelines Are Under Review on Comparators and Discounting

The PBAC Guidelines set out how sponsors should prepare submissions requesting public subsidy of medicines through the Pharmaceutical Benefits Scheme. They cover the clinical evaluation, including selection of the main comparator, and the economic evaluation. The PBAC’s guidelines page lists version 5.0 as a September 2016 major revision and reorganisation, and this remains the published version.

Section 3A sets out the approach to economic evaluation. Section 3A.1.5 specifies a uniform annual compounding discount rate of 5 per cent per year for costs and health outcomes occurring beyond one year, with sensitivity analyses at 3.5 per cent and 0 per cent. The choice of main comparator, which is generally the therapy most likely to be replaced in practice, has long been a central issue in PBAC submissions.

The Health Technology Assessment Policy and Methods Review, published in September 2024, recommended changes to several methods. Recommendation 39 proposes a reduced base-case discount rate, no lower than 3.5 per cent, for technologies with upfront costs and long-term benefits. After the Implementation Advisory Group’s interim report in 2025, the government announced a rolling review of the PBAC Guidelines, with comparator selection and the discount rate as the first areas for review.

Industry bodies have pressed for both changes. Medicines Australia has argued that the 5 per cent base-case rate does not align with international practice and has called for a lower rate. A 2026 industry-commissioned report by Evohealth argues that use of the lowest-cost comparator can lead to lower price benchmarks and delayed decisions. Earlier stakeholder submissions on a draft revision of the guidelines objected to proposed wording that, in their view, would make comparator selection more of an economic than a clinical question.

The two areas chosen for the first phase have a direct influence on submission results. The choice of main comparator determines the incremental clinical claim and, frequently, the price benchmark against which a new medicine is assessed. The discount rate affects the present value of future costs and health outcomes and therefore has a greater effect on technologies whose benefits occur over long periods, such as some vaccines and gene therapies.

The PBAC’s April 2026 update stated that the first phase of the rolling review focuses on comparator selection and discount rates. The agenda for the July 2026 PBAC meeting listed, under other matters, an update on amendments to the PBAC Guidelines for discount rate and comparator selection. The outcome and the revised text of the affected sections had not been located at the time of checking.

Until revised sections are published, sponsors should continue to follow version 5.0. Where the PBAC publishes amended sections, it will be important to check the stated date from which they apply to submissions.

The PBAC has previously reviewed the discount rate through a two-phase consultation, which examined whether the base-case rate needed to change and commissioned analysis of rates used in other jurisdictions. In earlier advice, reported by trade press, the PBAC indicated that the rate should be no lower than 3.5 to 4 per cent, subject to broader government policy decisions following the HTA Review.

Sponsors preparing submissions for upcoming PBAC meetings should present results using the current 5 per cent base case while showing the required sensitivity analyses at 3.5 per cent and 0 per cent. For products with large upfront costs and long-term benefits, the lower-rate analyses may become more relevant if the review adopts the Review’s recommendation. Clear justification of the main comparator, grounded in expected clinical practice, remains essential.

Pubrica’s summary is for information only and does not represent the PBAC or the Department of Health. Sponsors should rely on the current published guidelines and PBAC communications.