Vincent So
Most Australians assume that when taxpayers subsidise medicines through the Pharmaceutical Benefits Scheme (PBS), the money goes to pharmaceutical companies whose business is improving health.
Many would be surprised to learn that there is currently no requirement to disclose whether tobacco, vaping and nicotine industry interests may also benefit from publicly funded medicines.
Australia has spent decades fighting the harms caused by smoking. We were among the first countries in the world to introduce plain packaging. Tobacco advertising has been heavily restricted. Successive governments have invested billions of dollars in prevention campaigns and smoking cessation programs.
These efforts have helped save countless lives.
Yet modern corporate structures have created an unexpected blind spot.
Over recent years, tobacco, vaping and nicotine companies have expanded beyond cigarettes and vaping products into pharmaceutical and healthcare businesses. Through acquisitions, licensing agreements and intellectual property arrangements, commercial links can exist between medicines and industries whose products remain among the leading causes of preventable disease, addiction and death.
The most well-known example was Philip Morris International’s acquisition of Vectura, a company that developed inhaled medicines used by patients with respiratory disease.
For many clinicians and patients, the optics were deeply uncomfortable. A tobacco company was profiting from treatments used by people suffering illnesses that tobacco, vaping and nicotine products help cause. It was akin to an arsonist selling fire extinguishers.
The controversy prompted widespread concern across the health sector. Some pharmaceutical companies reviewed their commercial arrangements. Medical organisations spoke out. Patients questioned whether they should continue using products associated with tobacco ownership.
But the episode exposed a larger problem.
The Vectura case is the most prominent example. It illustrates a broader issue in which modern licensing, ownership and intellectual property arrangements can create commercial links between publicly funded medicines and tobacco, vaping, or nicotine industry interests.
Australia currently has no formal mechanism requiring pharmaceutical companies seeking PBS funding to disclose whether tobacco, vaping, and nicotine industry interests have ownership stakes, royalty arrangements, licensing interests or other commercial connections to the medicines being subsidised.
The Thoracic Society proposal preserves patient access to treatment while strengthening transparency and accountability.
If a medicine is safe, effective and offers value for money, patients should be able to access it.
Nor is it an argument that medicines should automatically be excluded from the PBS because of historical corporate relationships.
Rather, it is an argument for transparency.
Australian taxpayers contribute more than $20 billion each year towards PBS medicines. Surely, they have a right to know whether some of that money may ultimately flow to tobacco, vaping or nicotine industry interests.
Transparency is hardly a radical concept.
Under Australia’s Modern Slavery Act, large organisations are required to report on risks within their supply chains, and explain what they are doing to address them. The Society’s framework promotes public accountability by making these risks and the actions taken to address them visible.
A similar approach could work for medicines.
Pharmaceutical companies applying for PBS listing could simply be required to declare any actual, potential, or perceived risks of tobacco, vaping, or nicotine industry ownership, investment, licensing or royalty interests associated with a medicine or its supply chain.
Those declarations could be published alongside existing PBS documentation.
The administrative burden would be modest. Patient access would remain unchanged. But Australians would gain information that is currently unavailable.
Importantly, such a reform would also be consistent with Australia’s obligations under the World Health Organization Framework Convention on Tobacco Control, which seeks to protect public health policy from tobacco industry influence.
Public confidence in institutions depends on openness.
Australians are often asked to trust government decisions about healthcare spending. In return, governments should ensure those decisions are as transparent as possible.
The question is how the PBS should identify and manage tobacco-linked commercial interests while preserving patient access to medicines.
The question is whether Australians deserve to know.
The answer seems self-evident.
Vincent So is Chief Executive Officer of the Thoracic Society of Australia and New Zealand, the peak professional body representing more than 1,800 respiratory health professionals across medicine, nursing, allied health, science, and research. He is also the PHAA Vice-President (Finance). Vincent has previously worked in healthcare, investment banking, government, and public policy.
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