Australia's 'fourth hurdle' drug review comparing costs and benefits holds lessons for the United States.

Two decades ago Australia introduced an assessment of value as a prerequisite for adding new medicines to its national drug formulary. Australia's program--a "fourth hurdle" process after a drug is assessed for safety, efficacy, and quality--stands in stark contrast to the situation in the United States, where comparing the clinical and economic value of a proposed new drug to those of existing ones only rarely plays a role in the drug coverage determination process. This article describes the role that Australia's Pharmaceutical Benefits Advisory Committee, a statutory independent expert committee, plays in determining which new drugs the government will help pay for in the nation's pharmaceutical benefit program. The program does not directly control drug prices or ration prescription drugs-policy options that are widely opposed in the United States. Australia's program supports patients' access to important, innovative medications deemed to be cost-effective. The US system could benefit if policy makers examined Australia's experience and adopted a comparative clinical and value review suited to the US political and economic landscape.