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									Human Tissue Review
     Discussion Paper




       11 May 2009




           Page 1 of 18
AN INVITATION TO MAKE A SUBMISSION

The Commonwealth Department of Health and Ageing is inviting submissions from
interested parties to the Human Tissue Review.

This discussion paper has been developed to assist in informing submissions.

This discussion paper is being targeted at individuals and organisations who have been
identified as likely to have an interest or expertise in the issues covered in it.

This paper can be downloaded from the following website:
http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealth-
prostheseslist.htm

How to make a submission

There is no specified format for submissions. However, submissions should provide
commentary on one, some or all of the terms of reference. Where possible, supporting
data and documentation should be provided. Submissions can be provided electronic or
hard copy.

A form seeking authorship and other details is included with this copy. Please complete
and attach the form to your submission. If you are making an electronic submission,
please use either an electronic signature or type your name on the signature line.

To make a submission, or for further information, please contact:

Human Tissue Review
Private Health Insurance Branch
Acute Care Division
MDP 86
GPO Box 9848
CANBERRA ACT 2606

Email: human.tissue.review@health.gov.au
Telephone: 02 6289 1712
Fax: 02 6289 9444

The closing date for submissions is Tuesday 16 June 2009.




                                        Page 2 of 18
Submission Form
PLEASE COMPLETE THE FORM BELOW AND ATTACH IT TO YOUR
SUBMISSION.

1. Does this submission reflect the views of the organisation or an individual?
❑An individual ❑An organisation
If the submission reflects the views of an organisation please include details of the organisation at Q2:


2. Contact Details
Name......................................................................................................................................................
Organisation................................................................................................................. ..........................
Address..................................................................................................................................................
...............................................................................................................................................................
Phone no............................................................. Fax.................................................... .....................
Email .....................................................................................................................................................


3. My submission is confidential / not confidential.
❑CONFIDENTIAL                                            ❑NOT CONFIDENTIAL
(Please note: You should be aware that any submission made to the Commonwealth Department of Health
and Ageing may be subject to the requirements of the Commonwealth Freedom of Information Act 1982.)


4. The Commonwealth Department of Health and Ageing has permission to quote from
my submission in any reports prepared about this review. (If you do not agree to your
submission being quoted, the issues you raised in your submission may be referred to.
However, no direct quote would appear.)
❑Yes                              ❑No


Name (please print)............................................................................................................................. .............


Signature.........................................................................................................................................................
(please type name if submitting electronically)




                                                                              Page 3 of 18
Table of Contents

1.     Introduction ................................................................................................................. 5


2.     Background ................................................................................................................. 5


3.     Terms of Reference ..................................................................................................... 8


4.     Discussion ................................................................................................................... 9

       4.1        Terms of Reference No 1 ................................................................................ 9

       4.2        Terms of Reference No 2 .............................................................................. 12

       4.3        Terms of Reference No 3 .............................................................................. 13

       4.4        Terms of Reference No 4 .............................................................................. 14


Appendix 1 ........................................................................................................................ 16




                                                            Page 4 of 18
   1.     Introduction
The Commonwealth Department of Health and Ageing is conducting a review of the
listing of human tissue items on Part B of the Prostheses List (the Human Tissue
Review). Interested parties are invited to provide submissions to the review.

The Human Tissue Review will consider specific human tissue benefit issues, and
complement the broader Health Technology Assessment Review currently underway.

It is anticipated that a final report will be available September 2009.


   2.     Background
There are currently 9,760 items on the Prostheses List, of these items 267 are in Part B
Human Tissue.

Part B of the Prostheses List sets mandatory benefits that private health insurers must pay
for human tissue items provided to their members during insured hospital treatment.

Part A of the List, which contains prostheses that do not comprise human tissue, was
subject to reforms in October 2005 and April 2007 to ensure that processes for setting
benefits are fair, transparent and consistent. Part B of the List has not been subject to the
same reforms.

Human tissue items on the Prostheses List are currently not subject to clinical assessment
or benefit negotiations, and gaps (out of pocket expenses) for patients are not permitted.
Also, there is no cost recovery from industry of the costs associated with producing Part
B of the Prostheses List – this is borne by the Commonwealth.

The Department processes all applications for human tissue listings and makes
recommendations to the Minister for Health and Ageing on whether new items should be
placed on the Prostheses List. It also considers applications to increase benefits for
existing items and makes recommendations to the Minister for Health and Ageing on the
quantum of such increases.

The National Health Amendment (Prostheses) Act 2005 (the Act) required an
independent review of the operation of the October 2005 reforms. Mr Robert Doyle,
Chair of the Review, consulted widely on the prostheses listing arrangements and his
report, Report of the Review of the Prostheses Listing Arrangements, was tabled in the
Senate on 15 October 2007.

It was noted in the Doyle Report that there were very few submissions which addressed
the term of reference relating to human tissue items however that there appeared to be
anomalies in the benefits for these items.


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Recommendation 15 of the Doyle Report directly relates to Part B Human Tissue of the
Prostheses List and the Minister for Health and Ageing has agreed to its implementation.

       Recommendation 15:
       In relation to human tissue:
             The Department of Health and Ageing should carry out a comprehensive
              review of existing benefit levels for human tissue items, informed by cost
              accounting data provided by tissue banks, by June 2010.
             The Department should ensure it has appropriate clinical expertise
              available to provide advice to the Minister on the listing of human tissue
              items.
             In providing advice on items for inclusion on the List and benefit levels, the
              Department should have regard to the principles that no profit should be
              derived from trade in human tissue and items involving autologous tissue
              should not be listed.

This review is the first step in addressing recommendation 15 of the Doyle Report.

The Government is concurrently undertaking a Review of Health Technology Assessment
in Australia (the HTA Review), which was announced on 18 December 2008, by the
Minister for Health and Ageing, the Hon Nicola Roxon MP, and the Minister for Finance
and Deregulation, the Hon Lindsay Tanner MP, as a Better Regulation Ministerial
Partnership.

The HTA Review is one of the first Better Regulation Ministerial Partnerships to be
undertaken by the Australian Government, as part of its commitment to deregulation, to
reduce costs to business and consumers, and contribute to the Government’s productivity
agenda.

The objective of the HTA Review is to recommend options for improving process
efficiency and reducing regulatory burden for Commonwealth HTA processes to
facilitate medical innovation without compromising timely and affordable patient access
to medical services and devices that are demonstrated to be safe, effective and cost
effective and deliver improved health outcomes and value for money.

The Commonwealth HTA processes in-scope for the HTA Review are:
       regulation of therapeutic goods for market entry, currently undertaken by the
        Therapeutic Goods Administration (TGA) where there is duplication of Medical
        Services Advisory Committee (MSAC) and Prostheses and Devices Committee
        (PDC) processes;
       approval of funding under the Medicare Benefits Scheme (MBS), currently
        informed by the MSAC and relevant implementation consultative committees;



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          listing of prostheses for private health insurance coverage, as currently informed
           by the PDC; and
          listing of hybrid1 and co-dependent2 technologies as currently informed by the
           MSAC, Pharmaceutical Benefits Advisory Committee (PBAC) and PDC.

Further information on the HTA Review, including its terms of reference, is available at
http://www.health.gov.au/internet/main/publishing.nsf/Content/hta-review




1
  Where therapy involving the use of one health technology to directly improve health (eg a medicine or a medical device or a
procedure) is improved by the use of another health technology (eg a pathology or imaging diagnostic technology) which might more
accurately identify patient subsets most likely to gain from the therapy or monitors therapy response.

2
  Where the characteristics of different health technologies (eg a medicine or a medical device or a biologic) are combined in one
intervention (eg laser activated medicines such as photodynamic therapy, or drug eluting stents)




                                                             Page 7 of 18
   3.       Terms of Reference
The terms of reference for the review of human tissue listing arrangements for Part B of
the Prostheses List are:


   1. To assess items (and their sponsors) currently on Part B of the Prostheses List to
      ensure they meet Australian legislative requirements (including the Private
      Health Insurance Act 2007 and the various states/territories Human Tissue Acts)
      and are consistent with Government policy objectives. Consideration to be given
      to:
        -   whether a Medicare benefit is payable for the medical act associated with the
            provision of the prosthesis;
        -    whether autologous items should be listed;
        -   whether the listing of items is consistent with the principle that no profit
            should be derived from trade in human tissue; and
        -    whether TGA licensing requirements are met.


   2. To assess the appropriateness of the current structure of Part B of the Prostheses
      List and to make recommendations to ensure the use of consistent nomenclature
      for human tissue items;


   3. To assess current benefits for human tissue items on Part B of the Prostheses List
      taking into account:
        -    apparent anomalies for similar human tissue items; and
        -    freight and handling costs;


   4. To recommend a sustainable and efficient model to consider applications to list or
      amend human tissue items that is supported by appropriate clinical and financial
      expertise and is complementary to existing TGA and MSAC processes.


   This review will be undertaken in parallel with the Health Technology Assessment
   Review. Some aspects of this review may be subsumed by the Health Technology
   Assessment Review.




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   4.       Discussion

   4.1 Terms of Reference No 1

   To assess items (and their sponsors) currently on Part B of the Prostheses List to
   ensure they meet Australian legislative requirements (including the Private
   Health Insurance Act 2007 and the various states/territories Human Tissue Acts)
   and are consistent with Government policy objectives. Consideration to be given
   to:
        -    whether a Medicare benefit is payable for the medical act associated with
             the provision of the prosthesis;
        -    whether autologous items should be listed;
        -    whether the listing of items is consistent with the principle that no profit
             should be derived from trade in human tissue; and
        -    whether TGA licensing requirements are met.

Legislation
Legislation relevant to the Human Tissue Review includes:
    the Therapeutic Goods Act, 1989 which regulates the safety and the quality of
       human tissue facilities;
    State and Territory Human Tissue Acts cover the supply and sale of human tissue;
       and
    the Private Health Insurance Act (and associated Rules) set the benefits that
       private health insurers are required to pay for prostheses included on the
       Prostheses List.

See Appendix 1 for further detail.

Government Policy
The listing of items on Part B of the Prostheses List must be consistent with Government
policy objectives, including:
       be consistent with the Australian Government policy of regulating the safety,
        quality and efficacy of therapeutic products; and

       be consistent with Australian Government policy regarding access to, and
        financing of, medical procedures and therapeutic products, in particular the
        requirement for demonstrated safety, effectiveness and cost effectiveness to
        support public and private funding.

Medicare benefit
Under the Private Health Insurance Act 2007 private health insurers are required to pay
benefits for prostheses included on the Prostheses List:


                                          Page 9 of 18
        for which an insured person has appropriate cover;
        that are provided as part of an episode of hospital treatment or hospital substitute
         treatment; and
        for which a Medicare benefit is payable for the professional service associated
         with the provision of the prosthesis.

Human tissue items on the Prostheses List need to be checked to ensure that they have a
Medicare benefit payable for the professional service associated with their provision.

Some items have been identified that do not meet this requirement. The professional
services involved in implanting autologous chondrocyte implantation (ACI) items do not
have associated Medicare benefit items. A grandfathering arrangement is in place
regarding ACI items until the August 2009 Prostheses List to enable time for the
processing of an MSAC application for the procedure.

Autologous Items
The Doyle Report includes the following dialogue and recommendation on autologous
products:

        I also understand that Part B of the List containing human tissue
        prostheses includes a number of autologous products. These are
        produced by taking an individual’s tissue, manipulating it in some
        way and then implanting it in that individual. In my view this is
        essentially a therapeutic process rather than a manufacturing one,
        and these items should be excluded from the List.

        Recommendation 8: Items currently included on the List that do
        not meet the criteria for listing as a prosthesis and autologous
        tissue products should be removed by no later than December
        2008.


No profit should be derived from trade in human tissue
Traditionally, only not-for-profit bone and tissue banks and institutes have listed items on
Part B of the Prostheses List. More recently, for-profit businesses have been applying to
have human tissue items included on Part B of the List or are being subcontracted by not-
for-profit bone banks.

The prohibition of trade in human tissue, as outlined in the various Human Tissue Acts,
does not prevent cost recovery for services provided.

The Prostheses List forms for Human Tissue items specify the following in relation to the
benefit listed:
         the benefit for a human tissue prosthesis is based on the service cost of providing
          the product. The service cost includes only those costs legitimately incurred for




                                           Page 10 of 18
        the retrieval, processing, storage and transport of the product from the supplier to
        the hospital, or from one supplier to another; and
       it is the responsibility of suppliers of human tissue prostheses listed in the Private
        Health Insurance (Prostheses) Rules to ensure that they comply with relevant
        state and territory legislative requirements in relation to the sale of their products
        and the service cost.

The Australian Health Ethics Committee is developing an Issues Paper on ethical issues
involved in the commercialisation of human tissue. Topics included in the paper are:
ownership of tissue; commodification; biobanks; legislation; different organisational
models and community interest; relationships between not-for-profit and for-profit
organisations; consent issues; and the need to protect recipients from harm.
The Ethics and the exchange, sale of and profit from Products derived from Human
Tissue: an issues paper public consultation draft can be found at the following website:
www.nhmrc.gov.au/health_ethics/ahec/human_tissue. The final Issues Paper will be
published later this year.

TGA licensing
Human tissue and cellular products, and tissue and cell based derivatives are regulated by
several different routes within the Therapeutic Goods Act 1989 (amended June 2003).
Some human tissue products only require the manufacturer to be licensed to the
Australian Code of Good Manufacturing Practice, Human Blood and Tissues, whilst
others require both the licensing of the manufacturer and the product to be registered on
the ARTG.

The new human cellular and tissue therapies regulatory framework is expected to be
implemented in 2010 with a transition period for products to move into the new scheme.



QUESTIONS
   1. Are all items on Part B Human Tissue of the Prostheses List consistent with
      legislation?
   2. Should autologous items be removed from the Prostheses List? Why? Why not?
   3. What implications are there from the statement – no profit should be derived from
      trade in human tissue?
   4. The draft Issues Paper, Ethics and the exchange, sale of and profit from Products
      derived from Human Tissue: an issues paper, (available for consultation from the
      Australian Health Ethics Committee), proposes a distinction between human
      tissue and products derived from human tissue and suggests that in some
      circumstances such products may be used to generate a profit. What ramifications
      would that proposal have for the way in which products derived from human
      tissue for therapeutic purposes may be regulated?




                                         Page 11 of 18
   4.2 Terms of Reference No 2

   To assess the appropriateness of the current structure of Part B of the
   Prostheses List and to make recommendations to ensure the use of consistent
   nomenclature for human tissue items.

Part B of the Prostheses List is divided into three categories – cardiothoracic, ophthalmic
and orthopaedic.

The number of items within these categories has increased over time with little
consideration for establishing consistent naming conventions. This has made it difficult
to compare benefits of similar items when considering new applications and applications
to increase existing benefits.

The naming conventions should take into consideration levels of manufacture eg non-
processed, freeze dried, irradiated etc. and provide consistent units of measure.



QUESTIONS
   1. Is the current structure of Part B of the Prostheses List appropriate? Should there
      be more categories or subcategories?
   2. What are appropriate naming conventions for each of the categories?




                                         Page 12 of 18
   4.3 Terms of Reference No 3

   To assess current benefits for human tissue items on Part B of the Prostheses
   List taking into account:
        -    apparent anomalies for similar human tissue items; and
        -    freight and handling costs.

Addressing the second term of reference will assist in determining the extent of the
anomalies in benefits for similar human tissue items.

As previously advised, the Prostheses List forms for Human Tissue items specify that the
benefit for a human tissue prosthesis is based on the service cost of providing the product.
The service cost includes only those costs legitimately incurred for the retrieval,
processing, storage and transport of the product from the supplier to the hospital, or from
one supplier to another.

Transport costs are currently incorporated in the benefit for the item however the
department is aware that there are a range of issues arising from various freight and
handling cost scenarios including:
     special freight requirements (eg temperature controlled, time critical, special
       handling)
     Dangerous Goods associated costs
     interstate transfers
     emergency and off hour supply
     returned goods
     obtaining and storing items on behalf of end user

Other issues to consider are:
    the effect of TGA regulations on the cost of providing a human tissue item
    the effect of donation rate and transplantation rate on the cost of providing a
       human tissue item

It should be noted that all items in Part B of the Prostheses List are no gap items.



QUESTIONS:
   1.       What cost components should be included in the setting of the benefit?
   2.       Should similar products have similar benefits? Are there costs specific/unique
            to a State or Territory that may warrant a different benefit?
   3.       How should financial information be supplied to clearly identify costs
            associated with specific items?



                                           Page 13 of 18
   4.4 Terms of Reference No 4

   To recommend a sustainable and efficient model to consider applications to list
   or amend human tissue items that is supported by appropriate clinical and
   financial expertise and is complementary to existing TGA and MSAC processes.

The Department processes all applications for human tissue listings and makes
recommendations to the Minister for Health and Ageing on whether new items should be
placed on the Prostheses List. It also considers applications to increase benefits for
existing items and makes recommendations to the Minister for Health and Ageing on the
quantum of such increases.

The complexity of human tissue applications (both clinically and financially) and the
increasing range of new types of products for a growing number of different applications
requires greater resources and skills to assess.

The development of a model for assessing human tissue applications for the Prostheses
List should take into consideration:
       recommendation 15 of the Doyle Report that includes, in relation to human tissue
        the Department should ensure it has appropriate clinical expertise available to
        provide advice to the Minister on the listing of human tissue items; and
       opportunities to improve alignment with TGA and MSAC processes and reduce
        any unnecessary duplication of process experienced by applicants (Note: this will
        be a key consideration of the HTA Review).

Consideration could be given to including Part B under the current arrangements for Part
A of the Prostheses List.

Arrangements for listing products on Part A of the Prostheses List include an evidence-
based assessment of products and a centralised benefit negotiation process. Items on Part
A of the Prostheses List can be either no gap or gap permitted items.

A ministerially appointed advisory committee, the Prostheses and Devices Committee
(PDC), makes recommendations to the Australian Government Minister for Health and
Ageing (or their delegate) about which products should be included on Part A of the
Prostheses List and appropriate benefits for these products. In making its
recommendations, the PDC considers the safety, clinical effectiveness and cost relative to
the clinical effectiveness of other products. The PDC recommendations are informed by
expert clinical advisory groups and a Prostheses and Devices Negotiating Group.

Consideration could also be given to the more simple human tissue items (eg class 1 and
2 as per the TGA HCT regulatory framework) remaining in Part B of the Prostheses List




                                        Page 14 of 18
while the more complex human tissue items (eg class 3 and 4) are transferred to Part A of
the Prostheses List and are subject to more stringent clinical and financial assessment.

The Private Health Insurance (Prostheses Application and Listing Fees) Act 2007
imposes fees as a tax for:
       making an application to list a prosthesis;
       initially listing a prosthesis where the Minister has granted an application; and
       maintaining an ongoing listing of a prosthesis.

Currently the fees for Part B applications are nil. A new model for assessing human
tissue applications may require consideration of imposing fees to recover costs.



QUESTIONS:

   1.     What is an appropriate model for assessing (both clinically and financially)
          human tissue applications?
   2.     Are there merits for applying the current arrangements for assessing
          applications for Part A to assessing applications for Part B of the Prostheses
          List?
   3.     Should the classes of human tissue defined in the HCT Regulatory Framework
          guide the level of assessment required for human tissue applications?
   4.     Is the Prostheses List the appropriate tool for establishing the benefit to be paid
          by Private Health Insurers?




                                          Page 15 of 18
          Appendix 1
LEGISLATION

Regulation
Human tissue and cellular products, and tissue and cell based derivatives are regulated by
several different routes within the Therapeutic Goods Act 1989 (amended June 2003).

Relevant examples include:
       Human Tissue for implantation in the human body that is obtained, stored and
        supplied without any deliberate alteration to its biological and mechanical
        properties must comply with the Australian Code of Good Manufacturing
        Practice, Human Blood and Tissues, but are exempt from the requirement for
        entry on the ARTG, under the Therapeutic Goods Regulations, Schedule 5 Item 7
        (q). This includes most banked tissue, such as dura mater, heart valves, skin,
        corneas and bone.
       Human derived tissue and cell products that
        a. are not regulated as medicines; and
        b. are produced by deliberate alteration of tissue or cells in defined
            manufacturing processes
        are being regulated as “therapeutic devices” and declared other therapeutic goods
        (OTG) by a subsection 41BD(3) Order. Such products are to be manufactured in
        compliance with the Australian Code of Good Manufacturing Practice, Human
        Blood and Tissues (Part 3-3 of the Act), and to be registered on the ARTG (Part
        3-2 of the Act).
     Medicines and OTGs of human origin produced or prepared for a particular
      person are regulated differently.

The Australian Government has recently agreed to proceed with the establishment and
implementation of the human cellular and tissue therapies (HCT) regulatory framework.
The HCT regulatory framework is expected to be implemented in 2010 with a transition
period for products to move into the new scheme. For further information go to the TGA
website: www.tga.gov.au/bt/hct.htm.

The HCT regulatory framework comprises four classes of HCTs with varying levels of
regulation applying, based on a risk benefit analysis of the types of HCTs.

Class 1 biological
A biological is Class 1 if:
-   it is not banked; and
-   it is not processed (that is, manufactured by a process other than minimal
    manipulation); and



                                         Page 16 of 18
-   in any respect, it is not a Class 2, 3 or 4 biological; or
-   it is declared by Order to be a Class 1 biological.


Class 2 biological
A biological is Class 2 if:
-   it is banked; and
-   it is not processed (that is, manufactured by a process other than minimal
    manipulation); and
-   in any respect, it is not a Class 3 or 4 biological; or
-   it is declared by Order to be a Class 2 biological.


Class 3 biological
A biological is Class 3 if:
-   it is processed beyond minimal manipulation, in a manner that may alter the structure
    and properties of the cell or tissue but does not purposefully alter the biological
    activity; and
-   in any respect, it is not a Class 4 biological; or
-   it is declared by Order to be a Class 3 biological.

Class 4 biological
A biological is Class 4 if:
-   it is processed in a manner that deliberately manipulates the biological property(ies);
    or
-   the intended use is not its usual biological function; or
-   it is declared by Order to be a Class 4.


Supply and sale of human tissue
All states and Territories have legislation restricting the trade or sale of human tissue:
     Transplant and Anatomy Act 1978 (ACT ) – section 44
       Transplant and Anatomy Act 1979 (Qld) – section 40
       Human Tissue and Transplant Act 1982 (WA) – section 29
       Human Tissue Act 1982 (Vic) – section 38
       Human Tissue Act 1983 (NSW) – section 32



                                           Page 17 of 18
       Transplantation and Anatomy Act 1983 (SA ) – section 35
       Human Tissue Act 1985 (Tas) – section 27
       Human Tissue Transplant Act 1979 (NT) – section 24


Private Health Insurance Benefits
Under the Private Health Insurance Act 2007 private health insurers are required to pay
benefits for prostheses included on the Prostheses List:
       for which an insured person has appropriate cover;
       that are provided as part of an episode of hospital treatment or hospital substitute
        treatment; and
       for which a Medicare benefit is payable for the professional service associated
        with the provision of the prosthesis.

The authority to make the Prostheses List rests in sections 72-1 (2) and 72-10 of the
Private Health Insurance Act. The Prostheses List arrangements are set out in Division
72 of the Act and the Private Health Insurance (Prostheses) Rules. The Minister makes
the Rules and Schedule A of the Rules is known as “the Prostheses List”.

Mandatory cost recovery arrangements, which were introduced in the April 2007, are set
out in the Private Health Insurance (Prostheses Application and Listing Fees) Act and
the Private Health Insurance (Application and Listing Fee) Rules.

The Private Health Insurance (Prostheses Application and Listing Fees) Act imposes
fees as a tax for:
       making an application to list a prosthesis;
       initially listing a prosthesis where the Minister has granted an application; and
       maintaining an ongoing listing of a prosthesis.

The fees are set out in the Private Health Insurance (Prostheses Application and Listing
Fees) Rules. The fees for human tissue are nil.

The Private Health Insurance (Prostheses Application and Listing Fees) Rules provide
the following definition for human tissue prosthesis:

       human tissue prosthesis means a product that is substantially
       derived from human tissue where the tissue has been subjected
       to processing or treatments and the supply (however described,
       including trade, sell, give or gift) of which is governed by State
       or Territory law.




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