April 3, 2013 | Dr Glenn Carter
Update from Medicines Australia (Ref http://medicinesaustralia.com.au/2013/04/03/new-report-highlights-medicines-industry-downturn/)
A new report published by Medicines Australia points to the tough business conditions currently confronting the medicines industry in Australia.
The latest Medicines Australia Facts Book, which contains key industry statistics and other information, shows the medicines industry is facing significant challenges.
The Facts Book reveals:
1.Medical sales and service income for the medicines industry fell to $9.718bn in 2010-11, down from $10.021bn in 2009-10 – a decline of 3%.
2.The number of new medicines listed on the Pharmaceutical Benefits Scheme fell from 22 in 2010-11 to just 15 in 2011-12.
3.The number of Australians employed in the medicines industry declined for the fourth consecutive year, to 13,375; since 2006-07 more than 1300 Australian jobs have been lost from the medicines industry.
4.Annual turnover of the Australian medicines industry in 2010-11 grew by just 2%, from $21.95bn in 2009-10 to $22.46bn.
5.Annual investment in pharmaceutical R&D grew by just 0.3% per cent, from $1.034bn in 2009-10 to $1.037bn.
6.Australia’s R&D investment growth between 2005 and 2010 compares poorly with other markets: 42 per cent, compared with 46 per cent in Africa, 112 per cent in Canada, 303 per cent in India and 455 per cent in Japan.
7.Company tax rate in Australia remains five percentage points higher than the OECD average.
8.Australia remains well below the OECD average total expenditure on health as a proportion of GDP.
Medicines Australia chief executive Dr Brendan Shaw said the report highlighted the impact of a challenging and unpredictable policy environment.
“There’s no way to sugar-coat it, 2012 was a tough year for the Australian medicines industry,” Dr Shaw said.
“While the industry is still proudly one of Australia’s leading manufacturing export industries, generating over $4 billion a year in exports, the fact is jobs have been lost, clinical trial numbers are down more than 30% over the past six years, sales growth is low, patents on many major medicines are expiring, and the operating environment is generally becoming much tougher.
“Late last year we saw several companies announce over 300 job losses in the industry partly due to the tough PBS operating environment from things like listing delays and major price cuts for patented and off-patent medicines.
“We’re keen to build the Australian industry so Australia can capitalise on our great medical research capability.
“The Australian medicines industry makes a considerable contribution to the national economy, with $4 billion in exports, $1 billion of R&D investment and 13,000 high-value Australian jobs.
“There is an opportunity to protect and grow that economic contribution and to protect and grow Australian jobs. What’s needed is a return to a more predictable and stable policy environment.”
December 20, 2012 | Dr Glenn Carter
The following is a copy of Mark Masterson’s (Medicines Australia’s Chairman) speech to the National Press Club 5th December 2012, titled: ‘A vision for the Australian medicines industry in the Asian Century’.
Members of the National Press Club, distinguished guests: thank you for the opportunity to address you today on behalf of Australia’s medicines industry. I want to start with an anecdote if I may. Some years ago I was Area Vice-President for Abbott Pharmaceuticals with responsibility for the Asia Pacific. I spent far more of that time than I care to remember flying from one country to another negotiating deals and making investment decisions to leverage the expanding Asian market around us. From Shanghai to Singapore, Mumbai to Manila and many other Asian capitals, I remember very clearly the many decisions we made to set up new manufacturing or R&D facilities and the ongoing discussions with Chicago-based headquarters about how best to allocate resources and capital to the growing Asian market. Not once in any of those meetings, or at least very rarely, was Australia mentioned. I tell this story simply to make the point that for all the talk of Australia’s place in the Asian Century, we’re not yet on their radar. We’re not part of the conversation there. So the opportunity won’t just come to us. We can’t just sit and wait for it to happen. We have to go and get it. And we will have to work hard to capitalise on the rise of Asia if we are to seize the opportunity. It’s in that context this afternoon that I will announce the Australian medicines industry’s vision for a new economy and how it can drive sustainable economic growth in this country. A vision for the Australian medicines industry in the Asian Century. I will share with you an insight into the industry’s current economic contribution. And I will present the 10-year vision for the medicines industry’s role in a new economy. An economy driven not only by the resources boom, but by high-tech, high-value manufacturing and innovation. And I will outline the four key areas on which we as a nation need to focus if we are to capitalise on a precious opportunity for future prosperity. So, where the medicines industry is positioned right now, where we need to get to and how we get there. 2012 may well go down as the year Australia got serious about securing its future prosperity and fulfilling its immeasurable potential as a major economy. Because we’ve started having, in earnest, the conversations about how we can grow from a resource-reliant economy, into an industrial powerhouse built on a foundation of high-tech, high-value manufacturing and innovation. The debate has been raging. And Medicines Australia has been a keen participant in that debate. Over the past 12 months we have contributed to the Prime Minister’s Manufacturing Taskforce, the Prime Minister’s Economic Forum, the Federal Opposition’s Industries for Australia’s Future Review, the Australia in the Asian Century Review, and the McKeon Strategic Review of Health and Medical Research. Our industry has been engaged in these debates because we already make a substantial contribution to the health and wealth of the nation. And we recognise the unique opportunity – perhaps a once-in-a-generation opportunity – for the medicines industry to dramatically expand that contribution. Here’s the plan to ensure we take that opportunity and capture the benefits available for industry, for the nation’s economy and ultimately for the Australians whose lives are made better by innovative medicines and vaccines. Importantly, the Australian medicines industry already has a robust foundation on which to build a strong future. We are an industry that today makes an extraordinary contribution to the health and wealth of the nation on many levels. First and foremost, by making the medicines and vaccines that save lives, reduce pain and prevent disease: the medicines that fill 271 million prescriptions a year. How do you measure the value of that? You measure it by the fact that the overall death rate for cancer in Australia fell by 23 per cent for males and 17 per cent for females in the 10 years to 2009. And that in the last decade or so, mortality due to asthma and meningococcal has almost halved. Second, industry’s investment of a billion dollars a year to drive the research and development undertaken in Australian companies, university laboratories, hospitals and other research facilities across the country. And as part of this investment the Australian medicines industry spends $650 million a year on clinical trials. How do you measure the value of that? You measure it by the 700 new clinical trials that are started in Australia every year. You measure it by the 18,000 Australians who take part in clinical trials and have early and free access to medicines that aren’t yet available on the open market. You measure it by the $100 million a year these clinical trials save the taxpayer, through hospital costs and savings to the Pharmaceutical Benefits Scheme because those costs are covered by companies running the trials. And ultimately, you measure it by looking at the monumental impact on human health that medicines developed in Australia are having on humankind, like the CSL vaccine for human papillomavirus developed by Ian Frazer. Or the antiviral developed in Australia by GlaxoSmithKline in partnership with Biota, that is now a weapon in the World Health Organisation’s arsenal to combat pandemic influenza. And a new cystic fibrosis treatment discovered and developed in Australia by Pharmaxis. In fact, that company recently completed a multi-million dollar, state-of-the-art manufacturing plant in Sydney to supply it to the world. Third, by contributing to Australia’s balance of trade though our exports. So I ask you, again, how do you measure the value of that? You measure it by the $4 billion worth of medicines that Australia exports each year. That’s more than the car industry; more than the wine industry; in fact more than any other high-tech manufacturing exporter. And exports of medicines are currently growing at 7% year-on-year. Fourth, by directly employing more than 13,000 Australians. How do you measure the value of that? These are high-skill, high-wage jobs that contribute to productivity, generate substantial economic activity and bolster the Government’s tax take. Fifth, we are a low-carbon industry. In fact according to the Government’s CPRS Green Paper, the pharmaceutical industry accounts for just 0.1 per cent of Australia’s total emissions. That makes us a lower emitter than the education industry, fruit and vegetable products and government administration. Sixth, we have a strong record of industrial relations and constructive relationships with our unions. And seventh, we should never underestimate the value of our Australian identity. The “kangaroo” is highly trusted overseas and in Asian markets. Australian science is well regarded and our production output is trusted. Our medicines are viewed overseas as reliable and high-quality. So Brand Australia is a valuable asset and we are able to leverage that trust as we grow our export base. That in a nutshell is a snapshot of the contribution the Australian medicines industry makes to the heath and wealth of the nation. And it propels our vision for the future. So where we want to get to? This vision is about sustainable growth, and creating an environment that can attract investment; that can establish Australia as a world-class centre for medical research and drive collaboration between industry and the broader research community. The vision for the Australian medicines industry I present to you is to double in size over the next 10 years. To double our manufacturing output from $7 billion in 2012 to $14 billion in 2022 and establish a number of highly specialised biomanufacturing plants. To double our exports from $4 billion to $8 billion. Double our R&D investment from $1 billion to two billion. Creating many more high-skilled jobs and increasing the number of Australians accessing clinical trials to 30,000. That is an ambitious vision. But it’s an achievable and realistic one. Because here we have two key opportunities going for us: the once-in-a-generation opportunity to capitalise on the rise of Asia; and our capacity to position ourselves as a high-end, highly specialised biomanufacturing hub. We can start to quantify this opportunity by considering the magnitude and the projected growth of the global industry. The global pharmaceuticals market, currently worth $950 billion, is estimated to break through the $1.6 trillion mark by 2020. Australia is ideally placed to capture a much bigger share of that growing market. On our doorstep today we have an Asian market of 4 billion people – 200 times the size of Australia. This market offers exciting and unprecedented opportunities for many industries in Australia, including the medicines industry. While some manufacturing plants in Australia have closed over the past decade or relocated production to countries such as China, Indonesia or Singapore, other plants in Australia have been able to capitalise on these opportunities. Earlier this year, GlaxoSmithKline announced a $60 million investment in its Victorian manufacturing plant to supply markets in Asia. CSL are undertaking a $300 million expansion of their Broadmeadows site in Melbourne, and have finished construction of a large biotech facility for the late-stage development of new life-saving therapies for cancer, bleeding disorders and infection. And AstraZeneca have made a $60 million investment in their manufacturing plant in Sydney to supply the entire Chinese market with the company’s asthma treatment. To give you a sense of the size of this market, consider the population of China is 1.3 billion people. And consider the Chinese Government is reckoned to have spent something in the region of $124 billion in healthcare over the last two years, with 1500 new dedicated respiratory treatment centres scheduled for construction. Demand for asthma treatments in China is expected to grow by 500 per cent in a decade and by 2015, AstraZeneca’s site will be producing 360 million units a year for the Chinese market alone. What an opportunity this represents. With the right policies and investment incentives our exports could double over the next decade, especially if Australia succeeds in securing major investment in the new field of biomanufacturing over the next three to five years. Biological medicines are the cutting edge of modern medicine. They have already revolutionised the field and in the medium-term are likely to deliver the most effective means of treating a variety of illnesses and diseases such as cancer, arthritis, diabetes and Alzheimer’s. Biologics are different from most of today’s medicines. They are developed using biological processes, with living cells and organisms, and involve a highly sophisticated and costly process to manufacture in commercial quantities. Here is a real opportunity for Australia, with its highly skilled labor force, tightly regulated system and mature distribution infrastructure, to attract major investment in biomanufacturing in the next five years. In fact, the Government’s own Pharmaceutical Industry Strategy Group has already identified Australia’s potential to build on its competitive advantages in highly specialised areas of manufacturing and research such as these. The convergence of these two elements – the burgeoning Asian market and the emergence of biomanufacturing – presents the Australian medicines industry with a valuable, unprecedented opportunity for growth. How do we get there? Well, there are four key areas that we need to focus on and in which we need to get central policy settings absolutely right if we are to capitalise on these opportunities. First, establishing a significant, industry-neutral, Government-led strategic co-investment fund. Second, ensuring Australian R&D becomes much more globally competitive. Third, ensuring Australia’s taxation regime is more globally competitive. And fourth, securing a stable, predictable business and policy environment in Australia. Let me take each of these in order. A strategic Government co-investment fund is critical if we are serious about growing our innovative manufacturing sector. This should be a consolidated, industry neutral fund to which companies from different sectors would have access on a competitive basis. And I‘ll explain why. In November 2008 the Government announced a $5.4 billion fund to assist the car industry. According to The Australian Financial Review, the car industry’s production in 2011 was close to its lowest since 1957 and barely half of its 2004 peak. Indeed, exports of Australian-made vehicles fell 42 per cent between 2008 and 2010. Compare that with the Government’s investment in the Australian medicines industry in the 10 years to 1998 through the Factor F program. The program’s one billion dollar investment led to the creation of more than 1000 new jobs. It achieved a cumulative increase of $4 billion in production value-add and over $600 million in additional R&D expenditure. Since 1990, pharmaceutical exports have increased by more than 800 per cent, and in 2012 topped $4 billion, almost twice those of the car industry. If not for the Factor F investment, CSL arguably would not exist. Today it’s a $23 billion business. My point is not to denigrate Australia’s car industry. It’s an important industry with a long and proud history that still makes a key contribution to the local manufacturing sector. The point is that the Government needs to stop trying to pick winners. Instead, it must broaden its outlook and establish an industry-neutral strategic co-investment fund that is distributed on merit to the most deserving projects, so the winners would pick themselves. Under such a scheme the Government would fund 20% of the cost of a new manufacturing or R&D project judged by an independent panel, or by Innovation Australia with Treasury input, to provide significant and substantial benefit to the nation. Companies like Baxter, Pfizer, MSD, AstraZeneca and CSL would compete with innovators in other sectors: General Electric, Lockheed Martin and Google – and Holden and Ford. An independent agency would be charged with assessing competing claims and making strategic co-investment decisions based on the relative merits of those claims and the likely return on investment. This would be a much better use of taxpayer dollars because it would direct investment not to one industry over another, but to those projects that were most likely to deliver a return to the nation through jobs, innovation and output. Particularly in the current challenging economic environment where public funds are scarce, making sound, strategic, long-term targeted investment decisions on the basis of a robust business case and the promise of a strong return is a far more compelling approach than throwing taxpayer dollars into a particular industry basket and hoping it’s the right one. There are already examples of government doing this in an ad-hoc fashion. Projects undertaken by CSL and GlaxoSmithKline have been part-funded by strategic Government co-investment and are either already delivering healthy returns or are promising growth in the future. But we need a planned, sustained, strategic program driven by an overarching vision for Australian industry. The second key focus area is R&D. This is the bread and butter of the medicines industry. It is what we do for a living. It is what sustains our companies and it is where Australia has a great opportunity for growth. Medical research is part of this country’s DNA, from Howard Florey’s development of penicillin in the 1940s to Ian Frazer and the cervical cancer vaccine which has become available in the last five years. Since 2004 the Australian medicines industry has invested more than $6 billion in R&D, including over 5000 clinical trials in more than 30 therapeutic areas such as cardiovascular disease, oncology, diabetes and mental health. Australia has a reputation as a global centre for R&D excellence, boasting some of the best medical research scientists and research infrastructure in the world. But that reputation is under challenge. The world is changing and Australia is losing out on R&D investment to developing economies in Asia and South America. An international report published earlier this year showed that out of 174 pharmaceutical company R&D centres worldwide, Australia has only two. Moreover, between 2007 and 2010 the number of new clinical trials started in Australia fell by 34 per cent. This last point bears repeating: the number of new clinical trials started in Australia has fallen by 34 per cent. We must take urgent action not only to arrest this decline but to capitalize on our strategic advantages and reassert ourselves a major contributor to the global technology development supply chain of industry. The draft recommendations of the McKeon Review of Health and Medical Research, released in October, clearly recognise the importance of clinical research both as generator of economic benefit, but more importantly as a generator of health benefits for Australian patients. Investing three per cent of the Federal health budget on medical research will certainly help grow our national research base. But we need more than investment. We need to make a policy commitment to embed a culture of research and innovation in the health system. This is critical because as long as research remains an optional activity it will always be cast as the poor cousin, the first to be forgotten when times are tough and dollars are tight. It needs to be part of core business. Additionally, if Australia is to be globally competitive as a destination for R&D investment, Federal and State Governments must implement urgently the recommendations of an earlier review undertaken by the Government’s Clinical Trials Action Group, which reported in June 2010. In particular, we must harmonise the complex and cumbersome regulatory review processes for multi-centre clinical trials. We need a coordinated national patient referral network to facilitate recruitment of patients into clinical trials. And we need to ensure that systems of electronic medical records in public hospitals are compatible with industry requirements. In the two and a half years since the Clinical Trials Action Group reported to Government, nine of its 11 recommendations have not yet been implemented. It is no quicker to start a clinical trial than it was two and a half years ago. It is no cheaper to start a clinical trial than it was two and a half years ago. It is no easier to recruit patients for a clinical trial than it was two and a half years ago. And every month, patients are missing out on early access to new medicines and Australia is losing investment. There are human reasons why this is important as well as economic ones. Medical research is not some nebulous, esoteric pursuit that goes on in a lab. It has an immeasurable humanitarian dividend. Imagine for a moment that you are so debilitated by disease, you can’t even perform everyday tasks like turning a key, or writing a shopping list. Your condition continues to worsen and existing medication has limited effect. 19 Some years ago, I had the pleasure of speaking to a number of rheumatoid arthritis patients who were part of a clinical trial being run by Abbott Pharmaceuticals. What struck me most was the lengths to which these people would go to find some relief from the burden of their disease. One lady in particular, Judy, had three small children to care for. Judy was unable to work as her condition deteriorated and eventually found it impossible to perform these daily tasks. She found herself becoming increasingly desperate for a cure and was prepared to try any new medication that might relieve her symptoms. She signed up for the clinical trial and started a process that was to completely change her life. It may seem like a simple thing to you and me but I’ll never forget her saying that the thing that brought her most joy was the task of being able to cut fruit for her children. Early access to disease-changing medication not only changed Judy’s life, it allowed a family to feel normal again. So we need these reforms NOW. Not in 12 or 18 months. Patients who take part in clinical trials do not have the luxury of time. And frankly, nor does Australia if it wants to protect its reputation of R&D excellence from the threat of global competition. The third key focus area is accelerating the debate about Australia’s corporate tax arrangements and bringing greater courage and vision to that debate. We need to rethink our tax treatment of Australian companies and bring it into line with that of our international competitors. The circular discussion we’re currently locked into about whether the corporate tax rate should be 28 or 29 per cent is frankly pointless when many of our competitors including Canada, Denmark and Switzerland set corporate tax in the vicinity of 25 per cent. The world’s largest generic medicines manufacturer Teva is headquartered in Israel where the tax rate is 25 per cent. In markets like Singapore where the tax rate is 17 per cent, the pharmaceutical industry has made massive investments because capital is mobile and will always go to where companies can get the best return on their investment. It may be fanciful to suggest that Australia cuts its tax rate to those levels and I’m not going to do that. But if the United Kingdom can set a corporate tax rate of 24 per cent, there is no reason why Australia should not set ours at 25. This is not my recommendation. It’s the recommendation of the former Treasury Secretary Ken Henry, who I’m led to believe knows a thing or two about tax policy. The second point to make on taxation is the importance of the R&D tax credit that was introduced by the current Government last year. This incentive effectively reduces the cost of eligible R&D by up to 10 per cent and will help make Australia a more internationally competitive destination for medical research investment. Any winding back of this program, as was rumoured recently, would discourage investment in Australia and cost high-value research jobs. It would be extremely damaging to R&D investment in Australia and to our reputation as a predictable investment environment. Australia currently attracts more than $1 billion a year in pharmaceutical R&D investment. That investment would diminish if there were any winding back of the tax credit. And some companies would simply stop bringing R&D investment dollars to Australia. This is precisely the kind of incentive that Australian innovators need if we are to remain competitive on the global stage. The fourth key focus area is securing a stable, predictable business and policy environment in Australia. The medicines industry hates policy surprises. In particular, unilateral Government intervention in the way the Pharmaceutical Benefits Scheme is managed undermines confidence in the business environment and places ongoing investment at risk. That is why Medicines Australia agreed with the Commonwealth in 2010 a Memorandum of Understanding. Through this MoU the industry agreed to price cuts for PBS medicines worth $1.9 billion. And the Commonwealth committed to a five-year period of no further price-related savings measures, providing the industry with a relatively predictable business environment. Such stability is essential for ensuring ongoing industry investment in Australia, because company decisions about bringing new medicines to Australia, and investing in clinical research and manufacturing, are directly affected by business confidence in the regulatory and pricing environment. So we need a strong, stable and predictable medicines policy framework such as that provided by the current MoU. And we need a strong, stable and predictable intellectual property framework in Australia, because without intellectual property we wouldn’t have a medicines industry. But there is increasing concern among the industry and research community that the government is focussing on the wrong end of the stick when it comes to patents. In the past three months the Government has announced THREE new reviews or pieces of legislation designed to reduce intellectual property rights. This approach does little to inspire confidence globally. It is being interpreted overseas as a troubling agenda. And these concerns are being raised with me by executives in global companies who are questioning the stability of Australia’s intellectual property framework from an investment standpoint. Let’s be absolutely clear about this. Intellectual property is the lifeblood of innovation. Developing new medicines just won’t happen in Australia if companies cannot be confident of securing sufficient commercial return on their investment. And regulators who undermine intellectual property for short-term gain do so with flagrant disregard for the certain long-term impact of that action. We are a smart, clever, innovative country and we need a strong and stable IP system so that we can invest with confidence in high value-add both in research and manufacturing. So to conclude, we have a genuine, once-in-a-generation opportunity to grow the medicines industry into one of the key Australian high-tech industries that can lay the foundation for a new economy. An economy driven by innovation, ideas and high-technology that isn’t over-reliant on mining and resources. The two drivers of that opportunity are: first, the emergence of biologic medicines and the growth of high-value, high-tech biomanufacturing; and second, the rise of Asia on our doorstep and the dramatic escalation of demand for healthcare. Whether or not Australia can capitalise on this opportunity depends on whether we can quickly deliver the right policy settings in these four key focus areas. First, an industry neutral strategic co-investment fund to provide investment in new manufacturing and R&D projects that benefit the nation. Second, the draft recommendations of the McKeon report and the Clinical Trials Action Group report must be embraced and implemented expeditiously to improve our global competitiveness as a destination for R&D investment. Third, a corporate tax setting that is better aligned with those of our competitors. Specifically, there is an urgent need to accept the advice of the Henry Review and reduce our corporate tax rate to 25%. And fourth, a stable, predictable business and policy environment. The Australian medicines industry is making a significant contribution to the health and wealth of the nation, but with right policy settings we can do much more – for patients certainly, but also for the national economy. And what I’ve presented to you today is the vision for the role of the Australian medicines industry in a new economy. An economy with a diversified industrial base that can sustain this country beyond the current mining boom. An economy that places a value on innovation. An economy that nurtures high-end manufacturing. An economy that promotes Australia as a globally competitive market in which to do business. And an economy that can genuinely lay claim to being a smart economy. We have a once-in-a generation opportunity within our grasp. Let’s seize it.
November 1, 2012 | Dr Glenn Carter
The following is a copy of a speech recently delivered by Dr Brendan Shaw, CEO, Medicines Australia.
Further details can be found on the Medicines Australia website at http://medicinesaustralia.com.au/media-events/speeches/
The state of the medicines industry Speech to Living Longer, Living Well Conference 24 October 2012, Sydney, Australia Dr Brendan Shaw, Chief Executive, Medicines Australia
Introduction. Good morning. I’d like to start by acknowledging the traditional owners of the land we are meeting on today, the Gadigal people of the Eora nation. I acknowledge their history and their culture as custodians of this land. While people of modern Australia have living in this place for a little over 200 years, Indigenous Australians have been living for over 40,000 years here on the shores of Sydney Harbour. I pay my respects to their elders past and present. I’d also like to acknowledge Mark Masterson, the Chair of Medicines Australia. Mark has really hit the ground running and I have watched first hand just what a great advocate for the industry he is, so it’s a pleasure to have him as the Chair of Medicines Australia. Medicines Australia I acknowledge our member companies, managing directors, members of the Medicines Australia Board and other colleagues from MA member companies, distinguished guests, ladies and gentlemen. Living longer Today’s conference is entitled Living Longer, Living Well and I’ve been asked to talk about the state of the medicines industry. This talk will look at the past, the present, and the future of the industry and the medicines it makes. And to do this I want to start with a little experiment that requires some audience participation. Have a look around the room and look at how many people here today are males over the age of 47 or females over the age of 51. And also think about yourself. Are you a male over the age of 47 or a female over the age of 51? It’s okay, you can relax It’s actually a good news story. Have a look around and think about how many people here today are men older than 47 or women older than 51. Well, the point is that if we were having this conference at this very place 130 years ago, statistically speaking all of you men older than 47 and women older than 51 would be dead. On average those people in the room who fit into this category would not be alive today. That’s nothing personal and I’m sure, in fact, that these particular people here today would, of course, be as healthy and happily alive in the late 19th century as they are today! But generally speaking people in Australia who are aged over 50 years old today are, on average, unlikely to have lived to such an age in the early years of modern Australia’s history. Australian life expectancy The average life expectancy of an Australian boy born in the mid- to late-19th century was – wait for it – 47 years and an Australian girl born at the same time could expect to live for 51 years. By contrast, by the end of the first decade of the 21st century an Australian boy born could expect to live 79 years and an Australian girl born at the same time could expect to live 84 years. While I’ve used Australian data here, this trend – of increasing life expectancy – is repeated all over the world, in most developed and developing countries. And Australia does pretty well in the international stakes when it comes to life expectancy. Life expectancy in the OECD On average, human beings are each living 30 years longer today than they were a little over 100 years ago. That, ladies and gentlemen, is an outstanding achievement as a species. I think that is one of humanity’s greatest achievements in history. It’s something we don’t acknowledge much, but I believe that extending our life expectancy on average by 30 years has to be one of humanity’s greatest achievements. When you look at the spread of human history over the last 200,000 years and realise that it is only really in the last 100 years or so that we have achieved this 30 year improvement in life expectancy, you start to appreciate what we have achieved. Technological benefit and cost in medicines and vaccines Importantly, the developments in medicines and vaccines over the last 50 years have made an important contribution to this achievement. Now, obviously, this has come at a cost. The discovery, development, manufacture and distribution of these medicines and vaccines over the last half a century has had not come for free. Public health spending and wealth For example, pretty much every industrialised country has spent an increasing share of its income on health over the last 50 years as they have become richer. And we also know for a fact that, particularly over the last 20 or 30 years, industrialised countries have been spending an increasing share of the their health budget on medicines. But we already know that this spending on health and medicines has been a contributor to improvements in human health, extending both the length and quality of life. And the reason these countries have been spending more on medicines over the last 50 years or so is pretty simple. There are more technologies around today than there were 50 years ago. The story of how various medical and scientific discoveries have been successfully turned into medicines and vaccines that improve peoples’ lives is fascinating. Technological development in medicines and vaccines has seen major development over the last half century, and this shows up in the spending levels and growth rates for medicines and health spending in that time. The problem for the medicines industry – in trying to demonstrate its value to society – is that there is no visibility of this. People will queue down the street to get the latest iPhone 5, gasp in awe at the Airbus A380 as it takes off at the local airport, or chat incessantly about the development of social media platforms like Facebook or Twitter, but the technological revolution that has occurred in medicines and vaccines, and the resulting shift in human health and life expectancy over the last half century, has occurred with barely any public acknowledgement. Consumers haven’t noticed it, governments don’t want to admit it, and the industry hasn’t managed to credibly demonstrate it. The Pharmaceutical Benefits Scheme in Australia We can see an example of all of this in Australia with the Pharmaceutical Benefits Scheme. PBS as share GDP, IGRs Much of the public debate about the PBS has focussed on its cost and the impact of an ageing population on that. Most graphically, over the years governments of all political persuasions have released their Intergenerational Reports which try to look ahead 40 years and predict spending levels for government resulting from the impact of the ageing population. And, or course, when you look ahead 40 years the PBS spending chart looks like a horror story for the poor people in the Department of Finance. But the problem, of course, is that it is relatively easy to project the costs of the PBS forward 40 years. It’s much harder to conceptualise what the benefits of the PBS might be 40 years from now. We just don’t know what new treatments might be available in 2052, what diseases we might have cured, or what new preventative vaccines might be commonplace in 2052 that today just sound like science fiction. To illustrate the point that over 40 years the growth of medicines has had both benefits as well as costs, it’s actually more instructive to look back 40 years, rather than look forward and see how the PBS has changed. So for a few minutes I want to take you back 40 years, back to 1972. Just think about it. It was the era of tight pants, big hair and flares. In Australia, Gough Whitlam had just been elected Prime Minister of Australia in the famous ‘It’s Time’ federal election. And the top selling single on the charts was ‘Puppy Love’ by Donny Osmond. And there was the PBS. Compared to the $9 billion it costs today, back in 1972 the PBS cost – wait for it – $173 million. If you look around the room you can see the government officials sighing wistfully about the good old days when the PBS cost only $173 million! More importantly, in those days the PBS only cost the Government 0.39 per cent of our national income compared with 0.62 per cent today. That’s 0.23 percentage points more of our national income the government spends today on prescription medicines than it did 40 years ago. Patient contributions to the PBS have remained mostly around 0.1 per cent of GDP for the last 40 years. Now, obviously, you could look at this chart and see this increased cost for government as a bad thing. The PBS certainly costs society more today than it did 40 years ago. What a disaster. We’re ruined. This is something that needs to be fixed. But, the reality is that we are spending more on medicines today than we were 40 years ago for a number of very good reasons. For one, the population today is much larger than it was 40 years ago. In 1972, Australia’s population was just over 13 million people. Today it is almost 23 million. So for that extra 0.23 percentage points of GDP, we are subsidising the medicines of an extra 10 million people. There’s also the ageing of the population that is contributing. The 23 million Australians living today are, on average, older than the 13 million Australians living back in 1972. But there is still another reason why the PBS costs more today than it did 40 years ago. And it’s a reason so obvious that we have not realised it. There are more medicines available today to treat more diseases than there were 40 years ago. Think about it. One major reason consumers and governments are spending more on medicines today is because there are a lot more medicines to treat a lot more diseases than there were 40 years ago. PBS 1971 vs2011 Expenditure on the PBS : $160 million Expenditure on the PBS : $7.65 billion And I’ll prove it, again by looking at the PBS 40 years ago. Here’s a 40 year analysis of the PBS we did earlier this year, comparing the PBS between 1971 and 2011. First, here is the PBS in 1971. In the early 1970s, the biggest therapeutic groups on the PBS by value were nervous system medicines (24%) – which were predominately old analgesics, sedatives and hypnotics – and antibiotics like penicillin (23%). Almost half of all the expenditure on the PBS in the early 1970s was for pain killers and antibiotics. Notice what is not there. For a start, there is no mention of cancer medicines or immune-suppressants like arthritis medicines. They don’t even get their own category – because they were few and far between 40 years ago. Even cardiovascular medicines rank low down the list after pain killers and antibiotics for goodness sake. Compare this with the PBS 40 years later. Today, cardiovascular medicines account for over a quarter of all PBS expenditure – reflecting the fact that there are many more such medicines to treat things like stroke, high cholesterol and high blood pressure than there were 40 years ago. Another thing to note is that suddenly anti-neoplastics – or cancer medicines – and immune-modulating agents like arthritis medicines account for almost one-fifth of all PBS expenditure today. Forty years ago they didn’t even rate a mention on the PBS because, by and large, such medicines didn’t exist. Today the range of treatment options for patients and their doctors to use to treat cancer, cardiovascular disease, arthritis, HIV, asthma, psoriasis, mental illness, multiple sclerosis, diabetes and so on is so much wider than it was 40 years ago. And this sort of analysis still doesn’t take into account the clinical and technological improvements over that period in these classes of medicines. Today’s medicines for these diseases are much more effective, much better tolerated, have less side effects and are more convenient than those of 40 years ago. The point being that if we were putting together an Intergenerational Report back in the early 1970s and looking at the PBS, we probably wouldn’t have thought about the improvements in life expectancy, productivity and quality of life that additional 0.23 per cent increase in forgone national income would bring 40 years in the future. And so it is today. The medicines industry now and in the future So where did these new medicines and vaccines come from? Well, of course, the medicines and vaccines that people benefit from today came from the medicines industry. Those medicines and vaccines would simply not exist if it were not for the existence of the medicines industry. Whether it’s the emerging biotech companies that are growing into medicines companies, major innovator medicines companies that have been developing such medicines for years, or the generics companies that drive competition and affordability once the technologies become established, all of these companies help drive the development of medicines in the market. Global medicines market So where is the industry at, this industry that is so critical to the development of new medicines and vaccines for the community? It’s becoming a well worn cliché, but the industry is dealing with a lot of radical change at the moment. In terms of the total global market, forecasting firm IMS Health expects global spending on medicines to hit $1 trillion dollars next year in 2013. This means that next year the world collectively will be spending $1 trillion on medicines. And a lot of the growth in this industry over the next five years or so will be driven by growth in emerging markets. IMS expects the US share of global spending to fall from 41% in 2006 to 31% by 2016, the top five EU markets’ share to fall to 31% over the same period and Japan’s share of 10% to remain unchanged. But emerging markets will double their share over that period from 14% to 30% by 2016. What we’re essentially seeing is that the re-weighting of the global economy away from ‘developed’ to ‘emerging’ markets is having a discernable impact on the global medicines industry. Because of things like fast growing economies, rising incomes, a growing middle class and globalisation, emerging markets like China, India, Brazil, Russia, Thailand, South Africa and Mexico are all going to account for an increasing share of company sales. As people in these countries get wealthier, they are more able to purchase goods to look after their health, including medicines, a trend we’ve already seen over the last 50 years in OECD countries. This means that companies are directing an increasing share of their attention, time, resources and investment to these emerging markets. Of course, we are witnessing the radical shifts in technology that are sweeping through the industry. New technologies, what is on the horizon? At one end of the scale we have the range of blockbuster technologies that were introduced 20 years ago going off patent. Things like statins to reduce cholesterol, ACE inhibitors and AIIRAs for high blood pressure, SSRIs to treat depression and some of the early cancer medicines for things like breast cancer and prostate cancer are coming off patent. These once new-fangled technologies developed after decades of research and billions of dollars of careful clinical trials are now fast becoming the norm that everyone takes for granted. This is having a huge impact on established innovator companies’ revenue streams, and we’ve seen the resulting restructuring and job losses as a result. For generics companies, this creates enormous opportunities to get into the market and supply the world with the once exclusive-blockbuster technologies at cheap prices, but they’ll have to adjust to a much more competitive generics market than there was 10 years ago. At the other end of the scale, advances in things like gene sequencing and pharmacogenomics has opened up a whole new technology paradigm in biotechnology and the development of biologic medicines. Just as the development of the internet swept through the IT industry over the last 30 or 40 years, creating swathes of new technologies and business opportunities, so too the development of biologics is having a similar effect on the medicines industry. But equally, just as the internet led to the growth of new IT firms out of nowhere and also led to changes or declines in other IT firms, so too the biologics revolution will likely lead to similar changes in the medicines industry. Who will be the medicines industry equivalents of IT success stories like Google, Microsoft or Apple? And who will the medicines industry equivalents of IBM, Commodore or Netscape? In the biotech space, we’re seeing a whole new range of up and coming biotech companies developing medicines in-house and reaching a point of critical mass where they are essentially becoming innovative medicines companies. 50 fastest growing companies This combination of patent expiry of old technologies and emergence of biotech is reflected in the growth patterns of companies. If you rank the top 50 fastest growing companies in the global market, you very quickly see that generic and biotech companies feature prominently, and that a number of emerging Asian companies are on the list. It’s these areas of the industry that are generating the fastest growth in sales. R&D productivity Another issue the industry is dealing with globally is R&D productivity, or the number of new medicines that get developed per R&D dollar spent. And the industry has a real business issue here that has fundamental implications for patients and the community. While the industry has been spending more and more on R&D over the years, the number of new medicines developed each year has actually been falling. This is not a new trend. It has been happening for the last decade or so. We in the industry often talk about the complexity of developing a new medicine: the 15 years of research it takes to bring a medicine to the patient, the $1.5 billion on average to develop a new medicine, or the fact that for every 10,000 medicines in development only one will make it to the market. But while we sometimes speak of these numbers almost with some sense of pride in explaining how difficult it is to develop a new medicine or vaccine, the reality is the industry itself is increasingly coming to the view that this model is not sustainable. The increasing cost of developing new medicines is occurring for many reasons, including rising development costs, greater regulatory requirements and more molecules failing at the clinical trial stage because companies are moving into more difficult areas of disease and having to cope with more complex and difficult science. In response, companies are having to get better at developing new medicines, abandoning old practices, getting more hard-headed about where they invest their research dollars, learn how to recognise earlier if a molecule is not going to be a success, look for new sources of medicines, and identify new ways to develop them. So we’re seeing things like computer modelling and cell cultures being used more and more to identify if a molecule is going to be a successful medicine even before it’s tested in humans. Companies are streamlining their development portfolios and working on getting greater efficiencies in the process of how they develop new medicine. It seems these days there are as many stories of potential medicines failing at the late Phase III clinical trail stage as there have ever been, with the knock on negative commercial impacts on companies. And it is happening to big and small companies. We’ve seen a number of major companies’ major molecules for things like high cholesterol, Alzheimer’s Disease and cancer fail at the expensive end of the medicines development pipeline. Historically large companies have been able to wear failures like this due to their size, whereas their small biotech cousins who might only have a couple of potential products see their share price fall. The business model is under challenge…… But we’ve seen even for established medicines companies the impact of the challenges of the current market and business model impacting on their share prices. Where once upon a time the medicines industry’s share prices held up pretty well, reflecting investors’ confidence in the future returns from these companies, they haven’t been holding up as well for some of the established innovative medicine companies. And this is not just because of the Global Financial Crisis. This has been happening for some time. The business model for the established innovative medicines companies, at least, is under challenge and the market is waiting to see how these companies will respond. In the generics space, there are enormous opportunities, but the generics market is becoming more globally competitive with increasing volumes, but falling margins and the increasing dominance of companies from developing countries. For emerging biotech companies, success in a tough world means new therapies for patients driving greater revenue and the growing pains that come with turning from a small, laboratory-type outfit into a fully commercial bio-pharmaceutical company. The other thing that is happening globally is that all of these three segments – established innovator, generic and biotech – are all interacting with each other much more. The traditional boundaries between these three segments are all breaking down as the sector in total becomes more ‘organic’. Innovator companies with established product divisions competing in the generics market and bringing out biosimilars – or generic biologics, generics companies expanding into the development of new molecules, small biotech companies bringing innovative medicines to market and having to think and act like an established innovator pharmaceutical company, or biotech companies being bought by, and becoming in-house divisions of, innovator companies. All of these changes reflect an industry in flux due to rapid changes in the commercial, scientific and economic environment the industry faces. Then, on top of all this, we have changes in the way governments and societies want to subsidise medicines. In developed countries in places like the US, Europe, Japan and Australia we have seen governments cutting back, slashing prices and finding all sorts of ways to contain costs. Politicians in these countries lie awake at night fearing the tidal wave of ballooning health budgets brought about by wanton technological development and an increasingly vocal ageing population that want cheap access to this flood of new medicines. As an example, we’ve seen cost containment and price reductions in Europe over the last few years, triggered by the sovereign debt crisis there, which have basically led to a re-calibration of what society wants to spend on medicines. In emerging markets like Brazil, India, Korea, Thailand and, increasingly, China, we’ve seen those governments want to expand their health systems and introduce universal health care as their countries develop, but wanting to constrain that growth to manageable levels. The industry is also developing new models of engaging with the community. With the growth of the internet, an increasingly informed and savvy consumer movement, the loss of society’s confidence in business after the GFC, and governments spending more of their taxpayer dollars on health, there have been ever increasing calls for greater transparency in business. And the medicines industry is no exception. There is a long term trend of greater transparency in the industry, be it in publishing the results of all clinical trials for medicine – positive and negative; calls for greater information, standards and transparency in the way companies interact with health professionals; calls for transparency about information provided to patients and doctors; and calls for more realistic pricing of medicines and arms-length commercial relationships between companies and between companies and health professionals. While there’s still more to do, the industry here and internationally has done a lot in this space over the last decade or two. The industry is also working collaboratively with non-commercial organisations to address things like neglected tropical diseases and access to medicines in least developed countries. We’ve seen numerous corporate donations and alliances over the last 10 years in particular to make medicines available to people in least developed countries. And we’ve seen alliances with groups like the Gates Foundation, the Clinton Initiative, the World Intellectual Property Organisation and the World Health Organisation to work on neglected tropical diseases. Here in Australia, we’ve even got Medicines Australia’s Special Purpose Fund which sponsors projects to promote Aboriginal health and help close the gap between indigenous and non-indigenous life expectancy. All of these sorts of initiatives are all about the industry finding new alliances and models to work collaboratively with other organisations and improve health outcomes. Future technology and new therapies Ultimately, at the end of the day, all of this is about developing new medicines and vaccines for the population. So what does the future look like? We’ll hear more later today about the future and what it might look like, but I thought I’d finish by giving a bit of an insight into what new medicines and vaccines might come out of this maelstrom of ever changing technology, business models and commercial reality. Medicines in the pipeline The good news is that, through all this development and change, there will more new medicines and vaccines that will come to the market in the next few years. Globally, there are around 3,000 medicines and vaccines in clinical trial at the moment. Almost 900 of these are in cancer, followed by 334 for respiratory disorders and 300 for rare diseases. Now, obviously, not all of these will make it to market and be available to patients. As I said previously, many of these will drop out of the pipeline for various reasons. But we can expect that a number of new medicines and vaccines in these disease areas will become reality in the next five to 10 years. Whether it’s new treatments for prostate cancer, a vaccine for Alzheimers disease, or maybe a cure for diabetes, there’s likely to be a number of exciting breakthroughs in among those. The good news is that it may be that the number of new molecules launched per year is likely to increase in recent years (although finance ministers in governments may not be so wrapped in that idea!). New therapies over coming years For example, there are new therapies with new mechanisms of action being developed in areas such as Alzheimer’s disease, diabetes, Hepatitis C, skin cancer, ovarian cancer and prostate cancer that we may see launched in the next four to five years. Obviously with an ageing population, these treatments could bring new treatment options and improvements in survival and quality of life in future years. Looking out to 2040 …. And, finally, looking even further forward into the future out to 2040, futurists have looked at trends in science and technology and tried to map what technological developments in health care there might be in the next 30 years. This is a fascinating exercise, because usually when we talk about what health care will look like in the middle of the 21st century the debate is often about the costs of that health care. But, as this diagram shows, and as I tried to demonstrate earlier in my talk, the reason we spend more of our money on health care is precisely because there are new and better treatments coming out all the time. And it’s likely that this will continue in the next 40 or 50 years the same way it has over the last 40 or 50 years. Will we see continued improvements in the life expectancy of people over the next 50 to 100 years like we have seen in the previous 50 to 100 years? That, I do not know. The bottom line is that the ‘business’ of the medicines industry – how it operates, adapts and evolves – is absolutely critical to the community’s access to medicines and vaccines in the future. These changes will transform the way people live in the future to give them longer and healthier lives. And the medicines industry, the companies and the people in it, will be a key part of that transformation. Thank you.
September 16, 2011 | Dr Glenn Carter
In this blog I’ll highlight several key developments within the regulatory environment in Australia and New Zealand. The material was presented at the ARCS Regulatory conference (Canberra 15/16 September 2011).
The conference plenary session was opened by Megan Morris, Department of Health and Ageing, who has been appointed Deputy Secretary in charge of trans-Tasman harmonization. This initiative first started in 2003 with a Treaty to establish a joint trans-Tasman regulator (aligned to the principles of the trans Tasman Mutual Recognition Agreement (1996) promoting closer economic ties). During the period 2003-2007 negotiations between Australia and New Zealand proceeded, and in 2007 the process stalled when New Zealand was unable to get the necessary legislation through their Parliament. The initiative has since been reinvigorated with the signing of a Statement of Intent by Australia and New Zealand on 20 June 2011 to establish the Australian and New Zealand Therapeutic Products Agency (ANZTPA).
A progressive implementation over a period of 5 years is planned. The 3 staged approach will comprise:
1. Enhanced business to business cooperation and resource sharing.
2. Agreeing a common framework and a single entry point for business.
3. Establishment of a single agency.
This staged approach will bring benefits early on and will increase shared learning resulting in better outcomes. The staged implementation will have regard to new regulatory developments since 2007, and the current TGA reform process. A Ministerial Council (comprising Australian and New Zealand Ministers) will oversee implementation and a Transition Agency will be established to drive implementation and inform the Council.
Dr Stewart Jessamine, Group Manager Corporate, Medsafe, then provided an overview from the New Zealand perspective. He outlined that since 2007 there have been structural and process reforms and quality and performance reviews of the New Zealand regulatory system. This has resulted in a highly effective and efficient system, an abbreviated evaluation process, changes to the orphan/niche medicine approval process, Good Clinical Practice Guidelines more closely aligned to ICH, new pharmacovigilance systems (whereby 90% of GPs can report into a national ADR database from patient records), the introduction of quality systems and the setting of performance targets.
Overall ANZTPA will provide:
A single regulatory authority
A single enforcement scheme
A single market for therapeutic products
Pre and post market centres of excellence
Risk appropriate regulatory frameworks
An inclusive, transparent and open regulatory scheme
A cost effective regulatory scheme.
Professor Dennis Pearce, Chair TGA Transparency Review Panel, discussed the consultation process that led to 21 recommendations, centered around increased accountability and transparency.
He outlined 3 groups of recommendations:
A. Raise stakeholder involvement in the TGA
B. Post-market (monitoring and compliance)
C. Market Authorization Process
A. Raise Stakeholder Involvement in the TGA
1. Establishment of an Australian Therapeutic Goods Advisory Council.
2. Consultation principles to guide transparency and accountability.
3. Comprehensive communication strategy to inform and educate.
4. Work transparently with other key providers of information.
5. TGA website up to date and meets audience needs.
6. User-friendly information on risk-based framework.
7. Education about non-evaluation of listed medicines.
8. Clear, consistent statutory advisory committees.
9. Improve access and quality of information on advertising and complaints.
10. Key Performance Indicators (quantitative and qualitative) on operational effectiveness and efficiency.
B. Post Market (Monitoring and Compliance)
11. Policy on disclosure of commercially confidential information.
12. Explanation on regulatory processes and publish outcomes of application assessments.
13. On-line system for submission and tracking of applications.
14. Improve labelling and packaging to aid consumer and health practitioner decision making.
C. Market Authorization Process
15. Early post marketing risk communication scheme.
16. Actively promote safety information and timely alerts and recalls.
17. Maintain currency of CMI and PI.
18. Publish the outcomes of investigations and compliance actions.
19. Facilitate recognition and reporting of adverse events by health practitioners and consumers.
20. Adverse event database available and searchable to support quality of therapeutic goods.
21. Improve visible management of adverse event reporting.
These recommendations have been passed to Government and are under active consideration.
The overall aim of the reforms is to have an appropriate, consistent, effective, efficient and transparent regulatory system.
June 15, 2011 | Dr Glenn Carter
Medical Directors have a pivotal leadership role within pharmaceutical companies and in this article I’ll profile their typical day.
Essentially the role of a Medical Director is to oversee all activities within a company’s Medical Department and to contribute to company-wide business operations through involvement in the senior leadership team.
In Australia Medical Departments vary in size from 2 to 100 people, and the responsibilities of the Medical Director vary correspondingly. In a small department the Medical Director is very hands on and will be closely involved with all functions. In larger companies the Medical Directors immediate reports will include Associate Medical Directors, Medical Advisers, and Heads of Clinical Research, Regulatory Affairs, Medical Information and Health Economics.
The Medical Director’s daily activities can include emails and phone calls, going to internal and external meetings and travelling.
These are some of the requests that would be coming to the Medical Director: Head Office questions requesting updates on clinical trials, regulatory or health economics submissions eg “How is patient recruitment going in x trial”? “What did x investigator think about the draft protocol for the new trial”? “How many patients will Australia be able to commit to the global clinical trial program for x compound? “Here are the results from x trial to discuss with your investigators”; “Here are the responses to the questions the TGA are asking about the compound which is being reviewed for registration”; “Here is some additional data to include in the reimbursement submission”; Here is a report on the serious adverse events in x trial”.
Similarly the emails being sent out by the Medical Director would include clinical trial updates (patient recruitment, questions from investigators), requests for funding to support additional patient recruitment; updates from discussions with regulators, key opinion leaders, advisory boards, patient associations.
There will also be lots of internal emails focusing on the business operations (such as agendas for meetings, finance issues, training and people management, sales and marketing initiatives).
2. Phone calls:
Calls will be received from trial investigators (around Inclusion/ Exclusion criteria eg “My patient is also taking x drug can I enrol him”; or around the clinical protocol eg “If the patient had missed 2 visits can they continue in the trial?). Calls will also be coming in from CRAs who are on-site at hospitals doing monitoring visits (eg “The study nurse needs more drug and I need your help in getting head office to send it quickly”).
The press may phone asking for a response to an overseas article on one of the company’s drugs. As the medical leader within companies the Medical Director is frequently asked to publicly comment on a range of topics, and would have undergone media training.
There will also be phone calls from patient associations regarding sponsorship; from doctors requesting patient-specific medical advice; and from investigators asking to have their own trials supported.
3. Internal Meetings:
During a typical day the Medical Director will attend lots of meetings.
Firstly there are the Departmental meetings. In the Clinical Research meetings a whole range of issues will be discussed. Progress made in all the clinical trials will be regularly reviewed. Topics of conversation will center around Ethics Committee approvals, strategies to increase patient recruitment; availability of trial materials, site issues and management; trial budgets and payments and adverse event reporting.
Within Clinical Research meetings new trial protocols will also be discussed. This will involve reviewing protocols sent from Head Office, discussing whether they are applicable to Australian medical practice and identifying potential investigators.
In the Regulatory meetings the registration of New Chemical Entities, new dosage forms and new indications will be discussed. There will be updates on timelines for regulatory submissions and discussion on bottlenecks and issues which may delay registration.
During the meetings correspondence from the TGA will be reviewed and appropriate responses drafted; and the wording of PIs and CMIs will be finalised.
During the Medical Information meetings company promotional literature will be analysed to ensure that it meets Code of Conduct guidelines, with approval being given by the Medical Director prior to printing and distribution.
The focus during the Health Economics meetings is on reimbursement and market access. The strategy for PBAC submissions will be decided upon; the clinical data supporting the pricing strategy will be analysed; and additional supporting trials or analyses will be considered. Input from consultants (eg on economic modelling) and direction from head office (eg on international pricing) will be used to determine the negotiation strategy with the PBAC.
At these meetings there will also be discussion on the design of future clinical trials to ensure that they collect the right information for submissions. The Medical Director’s input will also include suggesting disease relevant health status questionnaires and Quality of Life instruments to incorporate into the trial design, as well as suitable gold standard comparator treatments relevant to medical practice in Australia.
In addition to Departmental meetings the Medical Director is also involved with across-company meetings.
One of these will involve having strategic input into the marketing meetings. The Medical Director’s medical knowledge and understanding of how patients are treated is useful when annual marketing plans are devised. Topics during these meetings include: sales forecasts, market trends, competitor activity, promotional programs, disease management programs, patient characteristics, and prescriber behaviour.
The Medical Director will also speak at the company’s national sales conference and product launches where they will discuss clinical trial results and facilitate disease area training.
During senior management meetings (also attended by the Managing Director, Sales and Marketing Director, Operations Director, Human Resources Director and Finance Director) the Medical Director will contribute to across- business discussions where a wide range of topics will include: operational and strategic planning, resource management, learning and development plans, succession planning, manufacturing and supply chain issues, policy development, external and corporate affairs initiatives, crisis management, and the monitoring of the company’s trading and cash flow position.
4. External Meetings:
The Medical Director may be responsible for assembling and managing Key Opinion Leader advisory groups for key products. The advisory group’s role is to review particular products (pre-launch or marketed), discuss where the product fits into the management of the patient’s disease, to suggest synergies with other company products and to discuss leading developments in the field. Information gained during these discussions is then summarized and made available to marketing and R&D functions.
It is also likely that the Medical Director will participate in Medicines Australia and other industry committees thus ensuring that their company has a high level of professional standing.
External meetings will also include co-visiting doctors with CRAs to discuss current and future clinical trials, and with sales reps to discuss the company’s marketed products.
As the company’s senior medical person the Medical Director travels extensively and represents the company via presentations to groups of experts, societies, regulatory bodies and at international meetings.
Whilst visiting hospitals the Medical Director will meet with Key Opinion Leaders to discuss clinical trial progress and results; to ask them questions regarding the feasibility of future clinical trials; and to discuss their involvement on Advisory Boards.
In Canberra the Medical Director will meet with the TGA where they will discuss scientific and clinical data with the regulators and build on-going relationships with key people.
When attending overseas meetings with Medical Directors from other countries there will be discussions on global clinical development programs; regulatory timelines for key compounds and strategies to gather data in support of reimbursement and market access.
When visiting regional offices (eg Singapore) or global Head Office (US, UK or Europe) there will be meetings with internal colleagues to build relationships; to request resources and headcount for Australia and to provide updates on clinical trials and regulatory, reimbursement and other medical issues.
The typical day of a Medical Director within an Australian pharmaceutical company is varied and complex. As the company’s senior medical person they are called upon to use their clinical knowledge and understanding of patient treatment protocols to advise their internal colleagues on clinical research, regulatory, medical information, reimbursement and sales and marketing issues. As a member of the senior leadership team they use their medical knowledge and commercial acumen to contribute to the overall success of the company.
Slides of this article can be found at http://www.slideshare.net/pmpconnect
May 30, 2011 | Dr Glenn Carter
I recently attended the ARCS Annual Scientific Congress (26-27 May) and found the first session on Personalized Medicine very interesting. Over the last couple of years we’ve been hearing more and more about “Personalized Medicine” and to have it presented as a key note session highlights the rapid development of this field.
Three speakers (Dr Penny Wilson, Technology Strategy Board UK; Associate Professor Grant McArthur, Peter MacCallum Cancer Centre, Melbourne and Professor Robyn Ward, Prince of Wales Hospital) discussed the emerging issues and trends in personalized medicine including point-of-care testing, the impact on clinical trial design and patient subgroups, genetic biomakers as predictors of disease and the implications of personalized medicine on the registration and reimbursement of pharmaceuticals.
In short, personalized medicine is all about finding a targeted drug to suit the individual. It involves giving the right patient, the right drug, at the right time and in the right dose.
Speakers noted that pharmaceutical medicine has previously centered around gaining data from large cohorts of patients. However these large global studies have not taken into account genetic variability of individuals within populations and that this may explain the lack of response of some patients to medicines. For example, we heard that: 90% of drugs work in only 30-50% of individuals; 10-30% of patients who take ACE inhibitors and 15-25% who take beta-blockers are non-responders; and that $350 billion is spent annually on ineffective medicines globally.
With advances in molecular profiling technologies (proteomic profiling; metabolomic analysis and genetic testing) more information is available on how a particular patient may respond to a particular treatment.
A case study was presented by A/Prof McArthur of a 65 year old woman with pulmonary metastases from metastatic anal melanoma. At the time of presentation there was no genetic information available and the patient did not respond to standard chemotherapy. However following testing, when genetic information became available, a mutation (KIT 820Y) was found and specific therapy aimed at this mutation was commenced, with the tumour shrinking after 4 months of treatment.
The majority of research has been conducted in oncology however there are also rapid advances within the fields of infectious diseases; degenerative diseases; and metabolic disorders. Within these areas it was discussed that many novel therapies are very effective, but only in a proportion of the target population. Many clinical trial programs are now incorporating the use of biomarkers into their protocols to identify the characteristics of those patients which respond favorably.
The objective of personalized medicine is to identify these populations and to commence appropriate treatment. Identifying subpopulations that respond will also provide better long term outcomes and increase the cost-effectiveness of the drug.
Personalized Medicine has also seen an increase in the development of companion diagnostics whereby molecular assays measure levels of proteins, genes or mutations. Based on these measurements specific therapy can then be provided for an individual’s condition.
Additionally the session highlighted that recent advances in genetics will make it possible to predict an individual’s predisposition and likelihood of developing a disease (eg Type II diabetes) and this knowledge can be used for preventative interventions.
We have therefore entered the age of molecular information. This molecular information will improve our health and our lives and with personalized medicine an earlier diagnosis and the commencement of earlier treatments and interventions will result in better long term outcomes for patients.
For industry, personalized medicine involves taking a highly targeted approach to drug development. This will result in faster time to market through faster regulatory and reimbursement processes (because better data is being collected); increased targeted prescribing and increased market share within specialized areas.
January 29, 2011 | Dr Glenn Carter
The pharmaceutical and medical industry is constantly evolving. To meet changing market needs business leaders seek new business models. Having just read the latest Harvard Business Review (Jan-Feb 2011) I recommend anyone involved in business planning and strategic management to read the articles in the Spotlight section (pages 79-114) “Business Model Innovation”.
The first article, “Reinvent Your Business Before It’s Too Late” (Nunes and Breene) highlights that successful companies do three things differently from less-successful companies. 1. They focus on edges – they pay attention to the edge of the company and the edge of the market, in order to avoid the myopia that long-running success engenders. 2. They shake up the top team – they change the makeup of the senior team earlier, and more radically, than their competitors do. 3. They maintain surplus talent – when other companies are cutting staff to cut costs, they go in the opposite direction: they cultivate serious talent with the capacity to grow new businesses.
The second article, “New Business Models in Emerging Markets” (Eyring, Johnson and Nair) comments that when multinationals look to emerging markets for future growth they simply transplant their domestic business models. In doing this they end up slashing margins or confining themselves to the higher-income tiers, which aren’t large enough to generate sufficient returns. The authors advise that to exploit this market companies must identify unsatisfied needs, devise fundamentally new business models that can meet these needs profitably and affordably, and carefully implement and evolve the models by continually testing assumptions and adjusting them.
The next article, “When Your Business Model Is In Trouble” (Gunther McGrath) outlines how to recognize and react to signs of an impending crisis. Clear signs that a business model is in trouble are when 1. Next-generation innovations offer smaller and smaller improvements, 2. You hear customers saying that new alternatives are increasingly acceptable to them, 3. The problem starts to show up in your financial numbers or other performance indicators. The author comments that there is always very early evidence that a business model is in trouble, but it usually gets ignored or dismissed – that’s because at most companies the people at the top got there because of their success with the current model, so they have very few incentives to question it’s durability. In reacting to an impending crisis successful companies already have processes in place that cause them to challenge the existing assumptions in their business model; they bring together diverse groups – people who know something about the technology, people who understand customer needs, people who have a longer view of where things might be evolving – and develop hypotheses about the areas where they should experiment, investing in several in order to get ahead of competitors.
The fourth article, “How To Design A Winning Business Model” (Casadesus-Masanell and Ricart) states that there are three characteristics of a good business model. 1. Alignment with company goals ie the choices made while designing a business model should deliver consequences that enable an organization to achieve its goals. This may seem obvious but there are many examples of companies which have business units with goals that are not aligned to the company’s goals. 2. Self-reinforcement. The choices that executives make while creating a business model should complement one another ie there must be internal consistency. When there’s a lack of reinforcement it is possible to refine the business model by abandoning some choices and making new ones. 3. Robustness. A good business model should be able to sustain its effectiveness over time by fending off four threats. They are imitation (can competitors replicate your business model?); holdup (can customers, suppliers or other players capture the value you create by flexing their bargaining power?); slack (organizational complacency); and substitution (can new products decrease the value customers perceive in your products or services?). The authors also note that smart companies design their business models to generate virtuous cycles that strengthen their competitive advantage. These virtuous cycles, or feedback loops, are self-reinforcing (eg low prices result in high sales volumes which result in greater bargaining power with suppliers, which in turn results in lower fixed costs and this translates to even lower prices; or another example would be lower prices result in lower expectations of quality and therefore lower variable costs and then even lower prices).
The fifth article in the series, “The CEOs Role In Business Model Reinvention” (Govindarajan and Trimble) the authors comment that a forward-looking CEO must do three things: manage the present (Preservation); selectively forget the past (Destruction); and create the future (Creation). For companies to endure, they must get the forces of preservation, destruction and creation in the right balance. Striking that balance is the CEO’s most important task, however most companies overwhelmingly favor preservation, over destruction or creation. To be sure, the work of preservation – the day-to-day execution of the existing business model – is vitally important. They must concentrate daily on performance excellence and continuous improvement. Most CEOs ignore destruction and creation before it is too late. They bow to a myriad of short-term pressures: intense demands for quarterly earnings, risk aversion, discomfort with uncertainty, resistance to change, and an unwillingness to cannibalize established businesses. As a result, many companies fail to transform themselves. To win both today and tomorrow, CEOs must operate in all three areas simultaneously. They must recognize that destruction and creation are not about what the business will be doing in 20 years; they are about the preparations it must make today.
The above collection of articles offers insights into business models and is worthwhile general reading for everyone interested in rethinking their company’s competitive positioning.
December 21, 2010 | Dr Glenn Carter
The Flexible Workforce
Contributor – Kathryn Taylor, Pharmaceutical & Medical Professionals
2011 will be a time of change. The economy has taken off and workforces are expanding. Companies will be addressing this expansion in non traditional ways. They will be seeking new ways of doing business and trying new business models. Successful companies will be agile, and to achieve this they will need flexible workforces.
During workforce planning companies will be considering their immediate business objectives: what they need to deliver, how they can deliver, who they can partner with, and who they can trust.
The changing economic environment and expectations of businesses is creating a dynamic of increase demands on less resources. Cost will continue to be important throughout 2011, especially when global headquarters drive and monitor projects. Efficiencies will be sought as these projects are rolled out but not at the risk of reducing quality. Companies are seeking flexibility in how they manage these projects.
Insourcing, outsourcing, contracting or third party engagement are all methods of sourcing additional services and support which offer flexibility to deal with immediate business requirements.
Common themes from companies are the need to reduce costs while delivering to a high ethical standard without losing the quality control aspects of the project. While outsourcing has increased as a whole, insourcing allows a closer control of project needs. Suppliers of these solutions need to deliver a full solution of human resources and project management support, regular review of objectives and metrics and compliance to all legislative requirements.
During 2011 companies will require individuals with the ability to remain agile through change and with the ability to create solutions from challenges whilst remaining abreast of core business issues. For this reason companies are utilizing short term resourcing solutions from external suppliers. Maintaining clarity of ownership and employer responsibilities will ensure objectives of the projects are met by these resources.
We have seen increases in supply of volume contract or insourced solutions for many functions across businesses including customer service, administration, sales and merchandising forces, clinical monitors and sales support.
Flexibility can present as a risk but managed in the right manner, it can produce a long term solution to evolving demands on businesses with minimal retraining, management and effort.
December 7, 2010 | Dr Glenn Carter
The guest speaker at the MTAA End of Year networking function (Dec 7th) was Ainslie Cahill, CEO Arthritis Australia. Also as the Deputy Chair of the Consumers Health Forum Ainslie works to support more meaningful engagement between consumers, consumer health organizations, government and industry.
Established 27 years ago Arthritis Australia manages educational, advocacy and research projects to improve the quality of healthcare for the 4 million Australians with arthritis.
Ainslie’s main message was that Arthritis Australia is a ‘remarkable resource that must be tapped’. Being in touch with thousands of consumers Arthritis Australia knows what these consumers want, what they need and what they fear.
Ainslie described various initiatives undertaken by Arthritis Australia. These included:
1. Working with a complementary medicines company to undertake market research which resulted in packaging and labelling changes, based on direct consumer feedback. They also worked with the same company’s advertising agencies to devise specific health messages which were applicable to the target market.
2. Through publishing a book: ‘Women’s insights into rheumatoid arthritis’ and showcasing discussions between patients and politicians (eg Julia Gillard, Penny Wong and Julie Bishop) Arthritis Australia was able to get their message across to parliamentarians in a very novel and effective way. This, combined with the formation of a Parliamentary Friends subgroup, has resulted in Arthritis Australia being consulted by the Department of Health and Ageing on a range of arthritis issues.
3. A ‘Community Chest model’ where 6 pharmaceutical companies, with an interest in arthritis, contribute equal sums of money to different annual initiatives, managed by Arthritis Australia. The current one, ‘Voice of Arthritis’ is a comprehensive survey focusing on the social effects of arthritis.
She recommended that industry companies identify relevant health consumer organizations which have a focus on education, advocacy and research and engage with them, thus gaining access to a wealth of insight and knowledge.
November 30, 2010 | Dr Glenn Carter
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We attended the New Insights into Medical Education conference organized by the APMRG on Nov 30th.
There were four speakers, each giving a different perspective on the above topic, and this article summarizes the conference highlights.
Christine Owen from the Royal Australian College of General Practitioners was the first speaker and she presented on ‘RACGP Education – all you need to know for the new triennium 2011 – 2013′.
Her talk was tailored to providers of medical education services to GPs and she provided helpful advice to assist with the preparation of new educational packages. The spirit of the Quality Improvement initiatives discussed were to ensure that increasingly higher levels of quality care were being delivered to patients and that medical education suppliers should focus on continuously improving their material and services.
Christine highlighted that a random selection of 10% of all activities will be quality reviewed by the RACGP and that suppliers should be mindful of the areas which have previously been deficient: 1. Learning objectives not having a patient safety objective; 2. Inadequate needs assessments ie insufficient justification for the program; 3. Evaluation forms were inadequate; 4. GP Adverse Feedback forms were not available and 5. Materials were not being filed. She also highlighted that if attendance lists and activity reports were not lodged within four weeks of the event a Quality Review may be initiated.
The second speaker, Louis Reginato, Managing Director, aeffect, discussed ‘Education – are you delivering to the needs of GPs?’
He noted that the demographics of GPs were changing and in the future there will be an increasing feminisation of general practice (with work/family commitment considerations), more corporatized practices, more home care and a greater reliance on technology. GPs will have less time for on-going education and they will be accessing this education through a range of channels, particularly online and digital.
Quoting US data it was shown that 72% of doctors have a smartphone, that 95% are downloading medical information and apps and that 50% are using apps at the point-of-care. The take away message was that providers need to be embracing how technology is changing how medical education is being delivered. When operating in the online environment providers must then be exciting their audience and making it worthwhile for them.
Lee Hayes, National Education Consultant Amgen Australia, presented on ‘Nurse Practitioners – an untapped education opportunity?’.
She highlighted that targeting groups of Nurse Practitioners presented companies with an excellent opportunity to connect with highly qualified and highly specialized healthcare professionals.
There are currently 590 members of the Australian College of Nurse Practitioners (www.acnp.org.au) representing both nurse practitioners and interested parties. The main areas of focus for this national peak organization are: emergency medicine, mental health, nephrology, neurology, pain management, rural and remote, chronic disease management, palliative care, oncology and surgical.
Nurse practitioners provide improved access to health services, a reduction in waiting times, a decrease in the length of hospital stay, improved healing rates, improved quality of life indicators and better continuity and coordination of care.
By involving nurse practitioners in their medical education programs companies will be able to access their high level of clinical knowledge and practical understanding of complex environments.
The last speaker was Michelle Goodwin, Education and Programs Manager Amgen Australia. In her presentation ‘How do specialists prefer their education’ Michelle described how a group of nephrologists were asked how they would like to receive their medical education and 53% of them wanted face-to-face meetings (either small group interactive learning sessions or round table discussions) with other healthcare professionals.
When asked would they access a video online if they couldn’t attend the meeting 73% responded yes, and of these 80% said that they would access this online material via their computer, not using a smartphone, app or iPad. The takeaway message here was that the specialists were computer savvy but not quite ready to embrace some of the latest technologies.
Michelle elaborated on how companies can make education a key differentiator for their businesses.
When planning a medical education program she advised providers to: ensure that the programs added value; partner with key stakeholders; drive brand and corporate equity through a differentiated platform and to focus on compliance and governance, whilst always ensuring that strategy is linked to tactical plans.
Michelle advised companies to develop unique medical education initiatives and to use expert advisory panels to shape the programs. These programs are strengthened by allowing customers to facilitate meetings and for the company refraining from dictating product messages. Differentiated education can provide a company with market leadership and position them as a trusted partner of choice.