Managed Entry Agreements for Pharmaceuticals in Australia

Managed Entry Agreements for Pharmaceuticals in Australia: A Closer Look

The cost of healthcare continues to escalate across the globe, and Australia is no exception. While the government is committed to providing affordable healthcare to its citizens, balancing it with the need to ensure the sustainability of the healthcare system is a constant challenge. One approach to manage the costs of pharmaceuticals is through a Managed Entry Agreement (MEA).

What Is a Managed Entry Agreement?

A Managed Entry Agreement is a contractual agreement between a pharmaceutical company and a health authority or payer. The agreement aims to facilitate the availability of a new medicine while providing an agreed-upon level of access and reimbursement. The agreement typically sets out the terms that the company would be willing to offer for a specific product, including price, volume, and performance-related considerations.

How Do Managed Entry Agreements Work in Australia?

In Australia, managed entry agreements typically involve the Pharmaceutical Benefits Advisory Committee (PBAC) and the Department of Health. PBAC is an independent expert committee that makes recommendations to the government on which medicines should be subsidized under the Pharmaceutical Benefits Scheme (PBS). The PBS provides subsidized access to essential medicines to Australian residents and citizens.

When a new medicine is being considered for PBS subsidy, the PBAC assesses the medicine`s clinical effectiveness, safety, and cost-effectiveness. It then makes a recommendation to the government on whether the medicine should be listed, and if so, what listing conditions should be attached.

Where the PBAC needs more information to make a recommendation, it may request the pharmaceutical company to submit a managed entry agreement proposal. This proposal outlines a set of alternative reimbursement arrangements that the company is willing to offer to the government to subsidize the medicine.

Managed entry agreements can take various forms, including discount pricing, performance-based rebates, risk-sharing arrangements, dose capping, and patient monitoring. The key aim of these arrangements is to provide the government with the certainty of the medicine`s cost and outcomes while providing patients with timely access to new medicines.

Benefits of Managed Entry Agreements

Managed entry agreements offer various benefits to both the government and the pharmaceutical industry.

For the government, managed entry agreements can provide a transparent framework for assessing the cost-effectiveness of new medicines. The contractual arrangements allow the government to set clear expectations for the price, volume, and outcomes associated with each medicine. This approach can help the government to manage the cost of medicines more effectively.

For the pharmaceutical industry, managed entry agreements can provide a pathway for access to the market while reducing risk. By providing the government with the certainty of the medicine`s cost and outcomes, the industry can improve predictability around revenue and market access.


Managed entry agreements provide a mechanism for offering new medicines to patients while balancing affordability and sustainability. In Australia, PBAC plays a crucial role in recommending the subsidy of new medicines under the PBS. Managed entry agreements enable the pharmaceutical industry to work collaboratively with the government and health authorities to ensure that new medicines are accessible to patients when they need them.


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