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National Press Club -

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(generated from captions) This Program is Captioned

Live. At the National Press

Club today, the Chief Executive

of Medicines Australia, Dr

Brendan Shaw. With the industry

body for the past 8 years,

today he will cover some

foundation issues, including

care, the cost of the role of medicines in health

medicine and their value to the

medicine and their value to the community. Brendan Shaw with

from Canberra. (Bell the National Press Club address

welcome to the National Press rings) Ladies and gentlemen,

Club for today's National Australia Bank Australia Bank address. Australia is generally

considered to have an excellent

public health system by global standards, effectively

underpinned by a system of subs dused

dused medicines, the PBS, the Pharmaceutical Benefits Scheme. Medicines drugs listed on the PBS, supply the vast majority of

something approaching 90% of

those drugs and that's on the

back of well over a billion

dollars worth of research and

development which is conducted

by the

really every year. But does this

really matter where our drugs

come from? If they work,

come from? If they work, should

we care? Well, according to the

Medicines Australia, the

resounding answer to that

question is yes. To explain

why, please welcome the Chief Executive of Medicines

Australia, Dr Brendan Shaw. (APPLAUSE) Members of the National Press

Club, distinguished guests,

thank you for the opportunity

to speak to you all here today.

I want to start

I want to start by acknowledging the traditional

owners of the land we're meeting on today. Europeans

have been living in this part

of the world for a little over

200 years, yet there are cave

paintings in the hills just out

the back of Canberra here that

show that Indigenous Australians have been living

here for at least 20,000 years.

It's with that in mind that I

would like to acknowledge

Ngunnawal and Nanbri peoples, traditional owners of land, the

acknowledge the history and

their culture and to their elders, past and

present. This afternoon, I want

to put two simple questions to

you: Where do your medicines

come from and why should you come from and why should

care. First I'm going to ask

you to imagine the following

scene. You wake up one morning

and you read the newspaper headline - medicines

in bid for Budget surplus.."

You read as part of its drive

for budget savings, the

Government has withdrawn all

prescription medicines and

vaccines from the market.

from the Pharmaceutical will save billions of dollars

Benefits Scheme, but there will

be no more vaccines for

whooping cough or measles, no

more asthma puffers for

children, no more blood

pressure tablets, no more

patients, no more chemotherapy for cancer

antidepressants or antibiotics,

at least one of those and we all know

medicines. So imagine the

public outcry if that scenario

were real. Imagine were real. Imagine the impact it would have on the health of

all Australians, what it would

mean for hospital costs and the

nation's productivity. And yet

our we never stop to think where

our medicines and vaccines come

from, except when suddenly we from, except when suddenly

can't get them anymore. So

where do your medicines come

from? And why should you care?

It is a simple question with a

number of complex answers. The

reality is not many people in

the community actually have idea where their medicines come

from and most probably don't

think it matters all that much.

But I want to argue to you

where your medicines come from, today that you should care

because if we don't stop and

think about where our medicines

and vaccines do come from, we

risk taking it for granted that

they will always be there Wei

need them. We risk becoming

complacent. If we take our

medicines for granted, we may

wake up one day and find we

don't have them anymore. So I'm

going to tell you today and why you should care. And

I'm also going to identify five

key opportunities we have in

Australia to ensure that the

medicines industry can keep

contributing to

wealth of our nation. So where

do your medicines come from?

Well, medicines have been

around for a long time. By the

time the first white settlers

arrived in Australia,

Aboriginal people had been

using traditional medicines for

thousands of years, taking

Australian landscape. For natural ingredients from the

example, they used the oil from eucalyptus

Deacon Jess tants and as

disinfect ants and they chewed

the leaves of the paper bark

trees to relieve headaches. On

the other side of the world

earlier this year,

archaeologists found the wreck of a

of a 2,000-year-old trading

ship lying at the bottom of the

Mediterranean sea. Amongst the

cargo they raised from the depths of the ocean, there

still intact bottles and

sealed. They still had had

their odour and amazingly were

still well reserved after being

at the bottom of the at the bottom of the ocean

literally since Jesus was a boy. Archaeologists believe

these were medicines and if

that's right, they are the

oldest medicines still preserved that have ever been found.

found. Medicines have been

around for a long time. But

they've certainly come a long

way since the days of using

simple herbs to treat people.

about When you step back and think

about some of the major the last 100 years or so, there

have been amazing milestones -

the discovery of penicillin,

anti- Rhett trot virals which

have transformed HIV AIDS from

a disease you die from to a

disease you live with, a

cervical vaccine and the

arrival of new biological medicines to treat cancer. Today the researching, discovering, developing, manufacturing, approving, and marketing

medicines is a global industry

worth $850 billion annually to

the world. It of people worldwide in the world. It employs millions

high-skilled jobs, people who

are committed to both building successful businesses and finding cures

finding cures for disease. This

is one of the great things

about the medicines industry, that people can build successful commercial

enterprises that generate wealth, employment and

innovation, and that make the world a better place. The two

objectives can and do co-exist.

It's an industry that works

with the best that

to offer and transforms it into medicines and medicines and vaccines that

help make the world a better

place for humanity. The

critical thing here to remember

is that this process of

bringing new medicines and vaccines to the global

community is not easy. In fact,

it's very difficult. If it were

easy, anyone could do it. But the

commercial resources of a

medicines company to bring a

medicine to market. On average,

the cost of developing a new medicine is around $1.4

billion, and it takes 12-15

years to take that medicine

from the laboratory to the

patient. To give you an example, Professor Ian Frazer's cervical

cervical cancer vaccine was

developed at the University of

Queensland and was first pat

tented in 1991, tented in 1991, but it wasn't until 2007 that that vaccine,

Gardasil, was listed on the

Pharmaceutical Benefits Scheme.

That's 16 years in development. The time that it takes to

bring a new medicine to market

is substantially longer than it

takes to bring, for example, a

new car or iPad to the market

and the commercial risks for companies developing new medicines medicines are frankly enormous.

For every 10,000 potential new

medicines that companies start with in the could turn out to be a new

medicine, only one will

actually make it to market and

taken by patients - one

medicine out of 10,000. At various points through the development process, the other

9,999 potential medicines are whittled whittled out, but the company

still has to cover the costs of

taking those 9,999 medicines

through the development

process. Those medicines drop

out for various reasons. It

might mean that the medicine

proved not as effective as first thought , it

may be due to safety reasons,

it may be the medicine proves

not to be commercially viable.

All of this is commercially risky for the company. Given

the time it takes to develop a

medicine and get it approved,

the company effectively only

has about 11 years of the

medicine's remaining pat tent

life to cover the cost of

developing that medicine, plus

the cost of testing all the

other failures and then gets a

commercial return. People

sometimes ask, "Why medicines cost so much money?" Hopefully

Hopefully you can see that for

a company to engage in this process, it

process, it has to expect a decent commercial return,

otherwise it might as well pack up and invest in something less

risky, like real estate or just

go and put its money in the

bank. It also explains why we

need pharmaceutical and biotech

companies to do this

investment. I don't know about

you, but if someone came to me

and asked to take on a risk of

$1 billion with the probability

of 1 in billion-dollar chance,

I would telling them to get

lost. Yet, it's these medicines that have made lives better for millions of people around the

world. At this point you're

probably thinking, "So what?"

And it is a fair question. These are all very interesting statistics, but statistics, but why should

anyone care how difficult it is for companies to develop

medicines and vaccines? Isn't

that their job? If they be commercially successful in

developing a medicine, isn't it

their problem? Well, yes, it is

- to a point. But here is the thing. If the industry collectively is not successful

at developing medicines over the longer term, it's the longer term, it's

everyone's problem. This might

all seem like a boring technical economic discussion

for pin heads about profit and

risk, and it is, until suddenly

it's your kid who is with cancer and needs the

latest cancer medicines, it's your ageing mother slowly

developing dementia, it's your

arthritis that's so bad the old

medicines don't work and it's too painful to play with the too painful to play with the grandkids, or it's you who is

one day diagnosed with breast

cancer or prostate cancer, in

the prime of your life. Where

your medicines come from matters to everyone. In

Australia, we can be extremely

proud of the industry's

contribution to the health and

wealth of the nation. Not many

know this, but Australia actually does have some

actually does have some significant capability in

developing medicines for the

world, using great innovation and technical

know-how. One of GlaxoSmithKline's major global manufacturing

manufacturing plants supplies

the world with Relenza, the

influenza anti-viral medicine

is located right here in

Australia, in Boronia in the outer suburbs of outer suburbs of Melbourne.

Relenza was developed by Biota, ab-Australian company. The

Chinese market - a factory in

North Ryde in Sydney manufacturers to China for an

asthma and lung disease medicine. Australia supplies

around a quarter of all poppies

which are required for

medicinal opiates which are

grown in Tasmania. CSL is one

of Australia's leading

industrial companies. IDT Limited, an Australian-owned

company based in Melbourne, exports active ingredients cancer medicines to companies all over the world. Leo Farmer,

a Danish company has production

facilities on the Gold Coast facilities on the Gold Coast in Queensland that Queensland that manufacturers active ingredients for skin

conditions, and there is

conditions, and there is a lot

of other companies that are developing new medicines in

Australia and starting to

export to markets overseas. I

could go on, but you get the idea. The medicines industry

employs 14,000 people in Australia. That's 14,000

ordinary Australians like you

and me who work around the country

country every day in companies bringing medicines bringing medicines to the

community. Whether they work as a clinical a clinical research, developing

a new medicine or vaccine, or a

medical expert looking for the

best uses of a medicine, or as

a sales representative working

with your local doctor, or as with your local doctor, or as a

regulatory expert navigating

the maze of the Australian

industry, all of these are too

industry, all of these are too often ignored. The industry exports

medicines to countries all over

the world which earns Australians $4 billion each

year. Now, to put this into

perspective, that's more

Australia's total exports of cars, and more than our total

exports of wine. So while

Australians are rightly proud

of our exports of cars, wine

and beer , in fact, we export

more in medicines and vaccines

than any of these. And than any of these. And the

industry invests $1 billion a year in research and

development in Australia to

make it a more important R & D

performer than and putting it in the same

league as the mining and

financial services industries.

The companies in the Australian medicines industry conduct

about 700 clinical trials each

year. As well as being good for

Australia's research and

innovation effort, they also

allow 18,000 Australians allow 18,000 Australians

each Er to participate in

trials of new experimental

medicines. This provides

patients with an opportunity to

potentially have access to

cutting-edge new treatments

they may not otherwise

get. Recently, I had the privilege

who was benefitting directly

from a clinical trial being

conducted in Australia. Alfred

lives in Melbourne and has prostate cancer. He has had

various treatments over the

years and he has been living

with prostrate cancer for the

last decade. He is currently on

a clinical trial with a new

development drug in partnership

with several country -

companies in Australia and

overseas. Alfred is benefitting from the treatment and explained that a in Melbourne how he believes the treatment the treatment is making a

material difference to his

management of his prostate

cancer. One of the real

pleasures of my job is that

occasionally in the midst of

all the statistics and policy

debates and argument and

politics, you really get a

reminder about why at the end

of the day we are really all

here doing this stuff. It's

making life better for making life better for people

like Alfred. Alfred, if you're

watching, I hope you're doing well. The science behind how

medicines fascinating as well. It's truly amazing sometimes where researchers discover new

treatments for disease. Here treatments for disease. Here is

another question for you to

ponder - what do a new tree, a

gilamonster lizard and a Caribbean sponge

Caribbean sponge all have in

common? They have all inspired

medicines to make people get better. The U-tree

ingredients for medicines. The

diabetes medicine Bieta which

is a synthetic version of the

enzyme found in the saliva of the lizard found the lizard found in the south western United States. And

Psytirabine treats leukaemia

and lymphoma. The fact is none

of these medicines would the companies willing to invest

in the medicines. I find it incred that

incred that we as a society

often singularly fail to

recognise the benefits of the

treatments. We have come to

take them for granted. And it matters. So now you know where

your medicines come from. Which

takes me to my next question:

Why should you care? You may

still be sitting there

thinking, "So what?" That all

sounds very interesting, all

that stuff about thousands of

medicines and jobs

all sounds great, but why

should I care? Why should I

care where my medicines come

from? Well, the point is you

should care because if we don't care where our medicines come

from, we risk becoming

complacent and taking for

granted something that may come

to an end if we don't think

about it. If medicines companies cannot continue to

develop new treatments, if it

gets too difficult, if there

are too many barriers and not

enough pathways, it's

everyone's problem. If the

world forgets where its

medicines come

it wrong, we compromise the

development of new medicines in

the future, and our

grandchildren will be using the

same medicines that we use today. In other words, they

will miss out on the extraordinary medical

innovation of a kind that has benefitted our generation over

the past 40 years, and what a shameful legacy that would

be. Now, you might think I'm

being over dramatic, but it's

actually already happening. You

hear stories from time to time

of what happens when the

community takes for granted where its medicines come from.

A government deferring the new

listing of medicines on the Pharmaceutical Benefits Scheme

in Australia, or women having

to pay full price for

replacement therapy, or

shortage of medicine s in

hospitals here in Australia, or

a lack of new med sips and vaccines to treat anti-microbal

resistance, influenza or

tropical diseases. All of these

stem from part the broader community forgetting

considering how medicines get developed, developed, the companies that

do that development, and the sort

sort of help these companies need to develop those

medicines. What should we be

concerned about? If we

agree about how we should care

how the medicines are developed, what are the key

policy drivers that can

continue to health care and

economic prosperity? Well, in

Australia at least, I think

there are five - a social licence to licence to operate, a responsible

responsible approach to

pricing, a robust intellectual and predictable policy

environment, and support for R

and D, investment and manufacturing. The first of

these is the medicines 's social licence to operate in the community, and by this I

mean the rights and obligations

the medicines industry has to serve serve society. This is

critically important because a

licence to operate is a fragile

thing. It's been hotly debated

here and around the world at the moment in the moment in different contexts. The is constantly becoming more

aware of its responsibilities

in the community, be it in

terms of how it researches its medicines, publishes the

results of its research,

markets its markets its medicines, designs

packaging and labelling, how to

conduct itself in relation to

patients and doctors , or

philanthropic support in the community. These responsibilities change and development with community

expectations. But equally the community has to reflect on the

industry's licence to operate. The industry needs to be here.

It should be promoting itself,

developing its medicines,

marketing those medicines and developing brands. The industry

is sometimes criticised for

having brands, wanting to make

a profit and being commercially

successful. But is it fair to

criticise the pharmaceutical

companies for doing all of this

when this reality it's being

part of a business, like a part of a business, like a business in any other industry?

Now, obviously the

industry is in a special place.

We're not talking about the development of the latest

plasma screen, vacuum cleaner

or space rocket. We're talking about the industry that

develops medicines and vaccines

that saves lives and making the

world a better place. The industry that has already

helped consign diseases helped consign diseases like

polio and small pox to the

history books, an industry that

is continuing to transform the

way people live their lives. That does come with special obling gations and

responsibilities. But while

commercial success, profit,

branding, marketing, investment

and shareholder returns are

accepted as normal in just

about every other industry, the

medicines industry is called to

account for doing that, and yet account for doing that, and yet it's this drive for success,

the vein vestment of time and

money and the hard work of the

companies and the people in the

industry to be both a commercial success and help

prevent and cure disease that gives us the medicines we have

today. Medicines to treat

illnesses such as cancer, heart

disease, depression, HIV AIDS,

arthritis, measles and arthritis, measles and asthma.

The second driver is a

responsible approach to pricing

prescription medicines. Now, of course governments always want

to get the best medicines they

can for the cheapest price, but

ultimately you get what you pay

for. The medicines you're

taking for your cholesterol, your arthritis, cancer, asthma,

took a lot of time, energy,

risk and money to develop. Manufacturers

Manufacturers need to make a sufficient commercial return on

those medicines so

continue to develop new ones in

the future. If they don't,

those companies can go and

invest in housing or bonds or

term deposits and earn the same

amount of money for a lot less risk. That's why medicines have

a price, so that more medicines

can get developed in the future. This is often the debate about the price of

medicines, but it's key to improving human health and

ensuring a viable medicines industry. Third is a robust

intellectual property

framework. The medicines

industry has one of the longest

lead times for bringing new

products from research to market of any high-tech manufacturing industry. It

takes longer to bring a new

product to market for medicines than it does for than it does for computer

software, consumer electronics

or semi conductors. Developing new medicines just won't happen if companies cannot be

confident they will be able to

secure sufficient commercial

return on their investment.

This is why the industry gets so concerned about things like

intellectual property and pat

tents. Proposal Pa tents.

Proposals we've seen Proposals we've seen in

Australia to ban all Pa tenting

material just doesn't make

sense and while just about

every other industrial company in the, d in the, d - country in the

world, Australia is way behind international best practice by

providing only five years'

protection. Fourth, there is

the need for predictability in

the policies governments use to regulate regulate and subsidise

medicines. We've seen around

the world in the wake of the

global financial crisis governments desperately trying

to rebuild their shattered

budgets and find savings any

way they can. And regrettably

an easy target for this

short-term grab for cash is the supply pharmaceuticals. Across Europe

wove' - across Europe we've

seen wave upon wave of seen wave upon wave of reform, restrictions, cutbacks and

price cuts, all aimed price cuts, all aimed at cutting returns to

pharmaceutical companies. This

has all been done in the name of short-term cost containment,

without any regard for

long-term consequences on the

future development of humanity.

This is an important point. We

need to ensure we don't follow Europe's lead in slashing health

health budgets. We've seen mistakes being made in Europe,

both in economic management and

in health care management,

where patients are being denied

medicines, much like the

scenario I outlined at the beginning. We beginning. We must make sure we don't make those same mistakes

in Australia, about you if

policy-makers forget where our

medicines come from, we run the

risk of doing so. For more than 60 60 years, Australians have

benefitted from the Federal Government's reimbursement

scope for medicines, the

Pharmaceutical Benefits Scheme.

And the medicines industry rightly, been a central player

here, constructively engaging with governments, other

stakeholders in the health

system, and the broader

community to make it

success that it is today. The high-water mark of this

engagement was reached last

year with the signing of year with the signing of the memorandum of understanding

between Medicines Australia and

the Federal Government. This agreement set a good four-year

framework for managing the PBS

in a way that secured savings

for the government to list new industry, and process

improvements for the PBS that

are benefitting patients. This

agreement, I believe, is one of the best pieces of the best pieces of collaborative public

policy-making the Labor

Government has achieved with

business since it was elected

in 2007. Which making it all

the more incredible that

earlier this year the

Government would introduce what

is effectively a new process

for approving medicines on the

PBS by substantially extending the Federal to defer indefinitely the

listing of new medicines. This

was done without consultation was done without consultation with the industry or anyone

else, for that matter. It lacked any transparency or predictability predictability and was done without defensible justification. It was bad

policy. It was bad for

patients, bad for companies,

bad for the health sector, and

bad for the Government. In the

last few weeks, the Government

has come to the table to

resolve this issue and that's encouraging, but there encouraging, but there are

still some issues to be worked through, not least how Cabinet going to consider new

medicines in the future? In a

high-income developed country

like Australia, the Government

should be able to afford to

subsidise new medicines for

sick people, and from the point of view of the companies that

make the medicines that were

deferred, it causes

uncertainty, a lack of

predictability and enormous commercial

commercial problems. It shows

what happens when you don't stop and think about where your

medicines come from. And the

final driver of a viable

medicines industry is

to encourage innovation,

research and manufacturing in

Australia. At a time when

Australia is

future of manufacturing in this

country, we have, right under

our noses, an industry that

already delivers so much to the

community and economy through

jobs, skills, wages, exports

and R and D, an industry that

has an excellent industrial

relations record and generates good exports, foreign investment, investment, high-skill, high-wage jobs, and some of the

best scientific minds in the

world. An industry that has a

low carbon footprint for the

economic growth it generates.

It is a perfect industry

country that is trying to

develop a smart, high-wage,

high -skill, innovative,

low-carbon economy, yet while

we have a toehold in the global

medicines industry, we could be

doing so much more. If we were

serious about building on the industrial capability we already have in this country,

we should be backing

Australia's medicines industry and encouraging

full potential. We have the

people, the skills, the ideas, the research, the

infrastructure, the companies,

the history and the critical

mass to take the next steps mass to take the next steps and make Australia a key niche

player in the global medicines

industry, if we want to. The

Australian industry is,

however, under challenge. After

much growth through the 1990s

and the first half of the 2 z

2000s, exports have stalled at $4 billion $4 billion a year and R and D

has plateaued at $1 billion a year. Employment has not grown

for a long time. Incredibly,

while the rest of the world is

seeing the growth in the number of clinical performed to test new

medicines, the number of new

trials in Australia has fallen

for the last three years by an

average of 13% per year. That's

not sustainable. There are both challenges

challenges and opportunities

for the Australian medicines

industry from the growth of emerging markets, particularly

in Asia. We can

of the key Australian high-tech

industries to help set up a

post-mining boom future, if we

stop and think about where our

medicines come from. So, in conclusion, the way humanity

has developed medicines and vak

soons has come a long way over

the past few year, from

theville land medicine man, or

the Roman umpire, to today's pharmaceutical industry, and

the humanity is better for it. Today's medicines industry does

good things, the people in it

do good work, but we need to

remember where our medicines

come from. And we all need to

care about that so that the

kind of benefits from medical

advances our generation has

enjoyed over the past few

decades, can be enjoyed by

generations to come. Thank you. (APPLAUSE) Thank you very much, dra

Shaw. We'll take questions from

our media members now and the

first question comes from Mark Metherell. From the 'Sydney

Morning Herald' and 'The Age',

I was interested to hear in

your speech talking about the

cost-cutting that goes on in

Europe in terms of availability

of medicines and the like.

Overnight, though, I hear that

the NICE therapeutic advisory

organisation in the

approved the use of a drug

Pradaxa which is seen as a

new-generation treatment

against stroke, which as, you

are aware here, despite a

positive recommendation from

the PBS, the Government has

called for another look at this

treatment. Why is it that in

this country, which is in a lot

better shape financially, than

Europe and the UK, we seem to

take a longer time to recommend or to or to reimburse medicines? What does that say about the status,

do you think, of the drug

industry in Australia? Do you feel that there is a bigger

obstacle to jump here to get approval than your industry

experiences in other countries? Look, thank you for the question. Certainly

Australia is well renowned

internationally for its tough

approval system, which in approval system, which in some

ways has helped the Pharmaceutical Benefits Scheme but, you're right, it's

well-known around the world as

being a tough system to get approval. Typically it takes

three years to get a medicine through Benefits Scheme approval system

and that's too long and we've

been working with the

Government to improve that

process. The focus on cost is

an interesting one. I think

part of the problem with the debate

debate and the system we have

at a broad level, a policy

leaf, is that the focus is

often on costs, don't take into account the benefits of spending on medicines.

medicines. We don't take these

into account enough. The

example you see recently is debates about longer term

spending on the Pharmaceutical

Benefits Scheme and an ageing

population and the

Intergenerational Report. We

see projections

see projections showing that Pharmaceutical Benefits Scheme

growing to a bigger cost in the

future and that's what grabs

the debate, is the costs and

you hear it often - the nation

can't afford it. What's often

forgotten is the benefits of medicines. So the focus of this

debate is the costs. What's

often forgotten is the

benefits. Why do we have a Pharmaceutical Benefits At the end of the day it's so

sick people can get better and

people can live longer lives.

The problem with that is it's

hard enough to project the

costs forward 40 years. Some of

the diseases we'll have 40

years from now probably won't

have been identified yet, have been identified yet, and

yet that's what we're fighting

against. What we've done in

some instances is look back years. For example, if you go

back and look at the Pharmaceutical Benefits Scheme of the

of the 1970s, yes t didn't cost

as much as it did today, yes t

doesn't cost as much of our income to have

Benefits Scheme in the 1970s as

it does now, about you if you

have a look at the

Pharmaceutical Benefits Scheme

of 1971, half of it was painkillers and antibiotics

whereas today, 40 years later,

yes, it costs more of our GDP,

but today there is medicines but today there is medicines for cancer, arthritis, reducing sclerosis. Four years ago, no medicines for multiple sclerosis sclerosis and there are a lot

of people alive today because

of medicines on the

Pharmaceutical Benefits Scheme today that weren't there 40

years ago. So one of the real

frustrations I have is often

the debate is characterised the debate is characterised as

a cost debate and that's

understandable - I'm an

economist, I understand that.

But the whole other side is

what is the PBS for, what what is the PBS for, what are

medicines before and that has to be taken into account. What

about Mark's question of

status, status in government or status of a bit player globally, your status in terms

of your masters f you of your masters f you like,

around the world? It's funny,

actually, as I said in the

speech, we do have a toehold, a

small toehold, but it is a

toehold and there are a range

of examples where Australia is actually punching above its walgt

walgt in terms of its

contribution to the global stas

tus industry, but what I'm

saying is we could take it to

the next level and the next level and make it a the next level and make it a

key part of our economy

post-mining boom. We have the

skills, and infrastructure and foundations for doing that and

we have to ensure we are a part of the pharmaceuticals

industry Simon Grose from Science

Science Media. E-health seems your main beef is that

it's not clear whether the

monitors and auditors of

clinical trials will be able to

register under the scheme. Now,

as I would understand it,

people in those roles would

have access to the other

records of the patients - - of

anybody involved in clinical

trials. So why is it essential trials. So why is it essential

for people in those roles to be

able to register under the

health identifiers Act? As I

said, clinical tries are a key

part of the research that

the day, as well as providing

benefits to patients, they are

also the way we develop new

medicines and they are a key

part of being able to prove to regulators and approvals

agencies that the medicines

work and work well, so they are work and work well, so they are

a key part of how medicines get

developed. One of the barriers

we have in Australia to

clinical trials is we need to

be able to recruit patients to

those trials. Often patients

don't know that they're

available or they only hear

about it through doctors f the doctors as part of the health system,

we believe that there should be

a system where the a system where the clinical

trial researchers can work with their doctors to work with

them. This is a recommendation

coming out of a consultative process we had with Government

some years ago. A whole series

of recommendations to improve regulatory environment and this

is one of them, to link in and

get better coordinated around

the country about how clinical

trials are conducted. There is

a range of other things there like getting a

like getting a one-step approval approval process for clinical

trials and coordinating them

between states and the

Commonwealth, but one of the

tools to do that is the health system.

system. So in the submission

we're asking the Government to build that into the health

system. Sue Dunleavy,

'Australian' newspaper. Dr

Shaw, you've come here today to tell

tell us what the industry needs from the

from the Government. Can I ask you a question about what the

Government and the industry

might return from your industry which is read in recent months how big

drug companies are paying

pharmacists $7 per patient to

enlist them to stay on their

drugs. They're paying drugs. They're paying doctors

$1500 per speech to talk to

groups of GPs to sell drugs,

they're paying tens of

thousands of dollars a thousands of dollars a year to

fly these doctors overseas. If

it's good enough for America to

have a sunshine act which names

the doctors on how much they

get from drug companies, why

stnt it good enough for

Australia, and will your review of the Medicines Australia code

of practice move towards individually identifying how

much each doctor in Australia

gets in these kickbacks from drug companies? Thank you drug companies? Thank you for your question. (LAUGHTER)

. Look, on the transparency of arrangements

arrangements with health professionals, as you professionals, as you rightly

said, there is a review under

way at the moment. We have our

Medicines Australia code of

conduct which has been around

for 50 years and part of that

regular process is that a regular three-year review

which is a chance for the code to be reviewed and to be reviewed and see if it

needs to be updated with changing requirements and

changing community expectations

and transparency reporting is

part of the review. I think it

is an issue to look at. I'm

always keen to look at the

costs and benefits of costs and benefits of different

things and so I think that

review will have a good, hard

look at that. More generally, look, I think the industry has

a track record here on transparency. If you transparency. If you look at internationally, publication of clinical publication of clinical trials work, more and more companies

are starting to put their

clinical trials and research collaborations on their

websites. We've had

industry start to report

educational events they have with

with doctors. In the government

processes we've supported the

introduction of publication of

public summary documents so the public

public can go tonne expert advisory committee, we've

worked with the regulatory

agency to have documents

available so that people can go

and see what the thought of the medicines and

the TGA has a transparency

review under way. I think the industry has the runs on the

board to show that over the

years we've engaged in this debate and debate and bomb more transparent. We recognise the

community attitudes around this are changing

are changing and it needs to be

done in a considered way and

there is a range of initiatives

there that have already been

done. More generally, I think

underlying your question is

what's the appropriate role

between private companies and

health practitioners, and

doctors and pharmacists? And I

think it is

role. I think if I go to a doctor, I actually want my

doctor to have been briefed on the latest the latest medicines, I want

them to understand what the

latest medical issues and treatments are, I

have met with the companies that

that manufactured the medicines so they understand what happens with the medicines.

with the medicines. Analogy

that some of you have heard me

use before, imagine you're

strap ed into the seat of a

Qantas Airbus A380 and Qantas Airbus A380 and the

pilot comes over the intercom, "Ladies and gentlemen to this Qantas flight, just

want to assure you that to

avoid any conflict of interest,

Qantas doesn't speak with

Airbus attal. We don't talk to

them, they don't talk to don't have any conflict of

interest because we wouldn't to

have that between a company

manufacturing a product and the

people using it and none of our pilots

pilots are traineded by Airbus

ooh either. We relie on a

community of bureaucrats to

train all our pilots just to

make sure there is no conflict of

in and enjoy the flight." I

don't know about you, but if I

was on that flight, I would be

heading out for the emergency

exit and throwing my kids out

the window as fast as I could,

the point being that in that

situation you've got a party providing providing a service to

passengers, using a highly complex manufactured product

and it's ludicrous to suggest

that the people using that product shouldn't be talking to

the manufacturers who make the

product. You all loved but the

suggestion that Qantas

shouldn't talk to Airbus is

ludicrous. It's exactly the

same in prescription You need the companies who make the medicines talking to the

health professionals. You need them talking to the them talking to the doctors so

the doctors can understand the

latest about the treatments and

also the companies can get

feedback from the doctors.

There are several examples

where adverse side effects where the sales representatives have picked it up from talking

to the doctors. The TGA makes

sure all the safety is there,

in the same way you have in the aviation source of advice and

accreditation. So fundamentally

for me it's key that those

companies are engaged in that

process and it adds value to

the health sector and makes

sure that patients get outcome from their medicines.

I'm quite happy to defend

it. Misha Schubert from the

'Sunday Age'. I want to take

you back to the time line at which Cabinet which Cabinet can defer the

listing of medicines. Why isn't

it justifiable for Cabinet to

exercise that caution about the expenditure of expenditure of scarce taxpayer dollars particularly in such

tight budget times and particularly when the industry

has had a pretty good track

record with utilising and

mobilising patient groups to mobilising patient groups to do

that? Surely if your products

are good enough, you can run

the arguments and win

them? Well, I think that's what

happened. Look, I think we put

forward the case as did - I

have to say, it wasn't just us,

it was the it was the whole community. I

think what this year has shown

is that the community gets

really annoyed when governments don't list actually the actually the patient groups and

the community driving the

campaign here. Yes, there was

us, there was the generics industry, the patient groups,

there was the doctors' groups,

the Opposition, Greens, broader

community, ind pebd experts,

independent commentators, all

agreeing that what the

Government did was the wrong decision, was bad subsequent after seven months the Government has come to the

table and wants to work out a solution, a way solution, a way to go forward

on that. There is still some questions to be answered about

that, but to its credit, the Government has listed all the

medicines that were deferred in

February, so they're all now

listed. To all intents and

purposes, brought back what was

the $10 million threshold to

Cabinet, so they're agreeing to

list things under $10 million

quicker, and they want to have

a conversation about the future. We're

future. We're happy to be at

the table with that

conversation, we haven't commitments or guarantees about

what that might look like, but the results speak for themselves, I think. The

Government has realised when you sit you sit down with the industry

and with consumer groups and

the broader community and have

a conversation about this, you

can get much better outcomes

and that's what's happened in this case. Andrew Tillett from the 'West the 'West Australian', Dr Shaw.

You talked about in your speech about pharmaceutical companies' social licence to operate in

the community, but we had a few

weeks ago the shortage of penicillin from CSL. I was

wondering what you can flesh

out what the industry is out what the industry is doing to prevent such a re-occurrence? We've actually

been doing exactly that for a number of

number of years. What makes the Ben sill Lyn example such a

story is the fact that it

actually happened. Usually what

happens and what's been

happening for years is that when

when a company becomes aware

that there might be a supply

issue, whether it's because

something happens at a factory

or a supplier doesn't deliver

on time, they sit with the TGA, the government regulator well before it becomes

becomes an issue and the reason

you don't hear about it is

because the problems are always

solved before you hear about

it. So, the system has worked

and worked well, and the

industry will take its

responsibilities in terms of

applying - of supplying

medicines to the public very

seriously and I think there is

a good relationship works with

the regulator where an issue crops

crops up, they

crops up, they get on the phone and talk about it and talk to

the suppliers before it becomes

an issue. The system that is

there now works and works well

and will continue to do in partnership with the regulator Glenn Milne, contributor to 'Australian', Dr Shaw. Thanks very much for the

speech. I will invite you now

to step on a political land

mine. I would like you to do so

gracefully. In the current environment of budgetary constraint, do constraint, do you think that

it's Minister Roxon, the

Minister for Health, who is

driving the windback of the

PBS, or do you think the drive to sur surplus it's now finance and

Treasury that are now

dominating health policy in

this area? Secondly, if I may, you mentioned that

exports of pharmaceuticals have

dropped off dramatically. Can you

you give us an examples of any

big companies that are

threatening to move offshore as

a result? Well n answer to your

first question, you will have to to ask the Health Minister,

unfortunately. I don't know the

internal machinations of the

Government. We think we do, but we don't. You see the comments

in the press about how influential Medicines Australia influential Medicines Australia is. I haven't grab those quets

and use them in my performance

appraisal views. I put them up

on the slides, look what these

journalists say about us. To be

honest, I don't know. You can

only go on what the public

statements have been, which you've seen the Health Minister

talk about fiscal problems and

presumably that's driven across

the whole of government,

whether it is a whole range of areas, the fiscal - trying to

get back into Budget get back into Budget surplus. Obviously every minister has to

work under that, but as to who

is actually calling the shot,,

I mean the Health Minister herself is a very herself is a very tough

character. Anyone who has sat

at the table negotiating an MOU

agreement or anything knows

that, and we will continue to

work with health ministers of work with health ministers of all political persuasions to

make sure the PBS works for the

community and the industry. community and the industry. And

the second part of your

question was... (Inaudible) Look, not ones

that I'm aware of who are going

to leave, but there have been a

number of companies over the

last few years that have closed

their facilities and their facilities and that's

disappointing. As I say, we've

had a number of companies with facilities in facilities in Sydney and

Melbourne for example actually

close their manufacturing operations and some of those were exporting offshore and some of those have been

relocated to Indonesia and

China and those sort of places.

What we want to do is make sure

we can hold the factories we

have here, to manufacture, and, yes, exports fell last financial

year by 7%, and after lots of

growth through the 1990s and 2000s, we've 2000s, we've seen exports

tailing off. We want to stop that. There is a real potential

here for the innovative

pharmaceutical industry to be a

key export driver for the

economy if and when the mining

boom goes bust, but we need to

have the framework to do it and

we need to have the factories

there to do it Just let me pick

up on that point, you've talked

about the potential, talked about the need to

encourage, innovation, R and D.

These are all generalities in a sense. What specifically are

you saying needs to be done? Do you have anything on the table

at the moment that you are

putting to Government or

planning to put to

Government? Well, there is a

debate at the moment about the

future of manufacturing future of manufacturing in

Australia and we welcome that

debate and it's great to see the Government the Government and Opposition

having reviews, future of

manufacturing in Australia, I

think it's long overdue. In terms of general approach to

manufacturing policy, there is

that need to be addressed in Australia, whether it's the

management scls, improving

those, Asia ready, language skills, finance

availableability, links with

the higher education and research sector, research sector, a whole range

of issues, not just the pharmaceuticals industry, a

whole range of issues that governments can and should be

doing more to address, overlaid

with perhaps a strategy for individual industries or particular industry's strategies. For

has been a report already that

was completed a couple of years

ago which we sat down with

government and industry to government and industry to formulate recommendations and that's where some of the

clinical trials work ed where I

talk about them coming out.

There cob a need for some sort

of government support for investment program, to

encourage companies to

redevelop their infrastructure,

so they can invest in new facilities and

they can export more. We would

like to think our industry was like to think our industry was one of the key players in that.

That needs to be considered as

part of a broader manufacturing

strategy being considered by both the both the Government and

Opposition You had something

like that with Factor X 20-odd

years ago. Factor F program, a

well resourced and good

programs. The irony is that we

were able to capitalise on recent were able to capitalise on recent export opportunities

precisely because they had been

supported by that program 20 years debates about whether these

programs pay off and worth the

money, some of the factories in

Australia today are able to

capitalise on the things like

the growth in China are

because of the Factor F program

in Australia 20 years ago. OK,

go back to Mark Metherell. I

would like to challenge you would like to challenge you on

this likening the relationship between

between the pilot and Airbus to

the drug company and the doctor. It scale is entirely different,

that in fact particularly when

you come to things like patient

support programs, where you

need to try and encourage people to take the right drug

for the right amount of time,

et cetera, is a lot different et cetera, is a lot different from the pilot accepting

training sessions from Airbus

in the sense that, you know,

the pilot is not going to be

buying an Airbus any time soon, whereas the doctor or whoever

is going to advise the patient, we're talking about something that is regular. Is there not

an argument, given the whom

problem over transparency, for

there to be some sort of there to be some sort of independent operation independent operation to get over this problem of so many not taking their drugs, people

don't trust the drug company

because they are there to make

a profit out of getting the

patient to buy more pills, but

if you have some sort of

independent body that is encouraging this or giving more

money to the NPS, for example, isn't that preferable to having

drug companies finance patient drug companies finance patient medication support schemes? No,

I don't think so You mentioned the compliance issue. Look, it

is a big issue. 50% of patients

don't complete the treatment

they're prescribed. Figures I

have seen, only 28% of

Australian asthma patients

actually take their actually take their preventative medicines N the statistics about cholesterol reducing medicines, 50% of patients stop taking them

within a year. Compliance is a

big issue for everyone. It is a

big issue for companies because

when companies go and try justify how effective their

medicines there, if 50% are not

taking them t looks like 50%

are taking them but having no benefit. Whereas in benefit. Whereas in fact the

patients aren't taking it. It's

bad for the Government because

they're shelling out these med medicines medicines that the patients are

taking, and ultimately it is

actually bad for the patient

because they won't get better. I

I disagree with you. The support support programs are designed

at that issue. It's exactly what they

what they do. The issue is the

patient has already been

prescribed the medicine, not

about shifting product, but making sure the patient takes

the medicine they've been

prescribed, provides additional services to them, information about adverse events, healthy

information, healthy eating all that sort of stuff. I disagree. I believe the supporting patient programs play a vital role. play a vital role. I don't have an issue with private companies

doing that, provided it is done

with within an ethical

framework. We have the code of conduct that includes

provisions on these and

providing there is no incentive

to prescribe or induce, those

programs work well and they actually contribute to this patient compliance problem you patient compliance problem you talked about. It is getting

close to time. Closed Captions by CSI.