life sciences policy, research + analysis

The cost of comparison: When the benchmark becomes the barrier

March 2026

The cost of comparison: When the benchmark becomes the barrier

A central pillar of Australia’s Health Technology Assessment (HTA) system is comparative evaluation, where a medicine or vaccine is assessed for clinical and economic value against a given comparator. [1] The current Pharmaceutical Benefits Advisory Committee (PBAC) guidelines state:

“Where there is more than one comparator, the main comparator should be the therapy that prescribers would most replace with the proposed medicine.”

– PBAC Guidelines v5.0 (2016), p.13 [2]

Comparator selection is intended to ensure therapies subsidised under the Pharmaceutical Benefit Scheme (PBS) deliver additional clinical benefit or cost savings for the healthcare system. [3] However, over time, comparator selection has increasingly defaulted to the lowest cost comparator (LCC), regardless of alignment with real-world clinical practice. [4] This trend has resulted in economic assessments anchored to irrelevant therapies, distorting the relationship between the price and value of a medicine. [5]

An economic evaluation in HTA is only valid if it measures the new medicine against what it displaces.

The issue of comparator selection is not new, yet until now, there has been little assessment of its true impact. The cost of comparison: When the benchmark becomes the barrier provides the first independent and comprehensive analysis of this critical issue.

Our analysis finds that LCC has become systemic and now imposes structural barriers to access.

80% experienced comparator substitution in the past five years. Of substitutions made-11231

100% were for the lowest cost alternative-1123

These barriers shape reimbursement outcomes, investment decisions, and Australia’s attractiveness as a launch market for innovation.

100% of sponsors who did not proceed to price negotiations after positive PBAC recommendation said the LCC-related price was a significant factor. [6]

95% agreed the LCC undervalues clinical innovation.12232

• Nine in ten agree comparator selection affects the timing of launch or indication sequencing in Australia

These impacts are flowing through to the healthcare system, where clinicians and advocates report patients are experiencing real-world consequences.

• 89% of patient advocates agree that the people they represent do not have access to innovative medicines to meet their clinical needs that are equivalent to other countries

Without access to innovative medicines,

Australians experience worse physical, psychosocial and financial outcomes,
Clinical practice is being constrained, and the healthcare system is being put under pressure, and
Clinical trial activity is at risk, including Australia’s access to emerging innovations.

While approaches to fixing comparator selection remain contested, there is strong consensus that reform is necessary, and that the system must move from review to action.

• 100% of survey respondents agreed major reform to comparator selection is required

Swift action is now required to secure timely and equitable access to the next generation of medicines. Evohealth’s phased roadmap proposes eight actions for short-, medium- and long-term reform efforts over the next five years. These reforms are necessary to restore economic and scientific integrity to HTA and re-establish Australia as a credible destination for innovative medicines.

Short term: Contemporise HTA practices in the next 12 months

Action 1

Align PBAC Guidelines with clinical reality to restore economic validity.

Action 2

Amend the National Health Act 1953 (Commonwealth) to reference the PBAC Guidelines.

Action 3

Transition to a PICO (Population, Intervention, Comparator, Outcome) model where the comparator is agreed with the PBAC during the early stages of the submission pathway.

Action 4

Fast-track implementation of HTA Review Recommendations 7, 32, 41 and 42.

Medium term: Invest in Australia’s future over the next two years

Action 5

Embed flexible approaches for medicines responding to high patient needs, particularly where comparator prices have been eroded from ongoing pricing policies.

Action 6

Initiate structured Government-industry dialogue on the interplay between Statutory Price Reductions and innovation.

Action 7

Increase investment in medicines by aligning PBS funding with the growth in health needs.

Long term: Elevate Australia’s global position in the next five years

Action 8

Co-design a national life sciences sector strategy.

References

Department of Health and Aged Care. National Medicines Policy 2022. 2022; Available from: https://www.health.gov.au/sites/default/files/2022-12/national-medicines-policy.pdf.
Pharmaceutical Benefits Advisory Committee. Section 3 Economic Evaluation: Guidelines for preparing submissions to the Pharmaceutical Benefits Advisory Committee (PBAC). 2016; Available from: https://pbac.pbs.gov.au/section-3-economic-evaluation.html.
Review Reference Committee. Health Technology Assessment Policy and Methods Review – Final Report. 2024; Available from: https://www.health.gov.au/sites/default/files/2024-09/health-technology-assessment-policy-and-methods-review-final-report_0.pdf.
Medicines Australia. HTA comparators: Evaluations of innovative medical technologies should compare their benefits and costs against standard clinical practice in Australia. 2022; Available from: https://www.medicinesaustralia.com.au/wp-content/uploads/sites/65/2022/11/HTA-DP-Comparators.pdf.
Medicines Australia. Fact Sheet: Comparator Selection. 2024; Available from: https://www.medicinesaustralia.com.au/wp-content/uploads/sites/65/2024/10/Fact-sheet-Comparator-selection.pdf.
Evohealth, Survey of innovative pharmaceutical companies: Exploring how comparator choice is shaping access to innovative medicines in Australia. 2025.
Evohealth, Survey of patient advocates: Impact of comparator choice on medicines access. 2025.