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Standing Committee on Health, Aged Care and Sport
22/04/2021
Approval processes for new drugs and novel medical technologies in Australia

GRANT, Dr Daniel, Co-Chair, Australian Antimicrobial Resistance Network

HODGE, Dr Mark, Chief Executive Officer, DMTC Ltd

WATERKEYN, Dr Jacqui, Member, Association of Australian Medical Research Institutes

[14:50]

CHAIR: I need to remind you that today's proceedings are legal proceedings of the parliament. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today attracts parliamentary privilege. Thank you very much for your submissions. I invite you to give an opening statement.

Dr Grant : Good afternoon and thank you for the opportunity to speak with you today. I'm managing director and CEO of MTPConnect, the industry growth centre for the medtech, biotech and pharma sector. I'm also the co-chair of the Australian Antimicrobial Resistance Network. While the focus of my remarks today are on antimicrobial resistance, they're also broadly applicable to the efforts to drive more commercial outcomes from Australia's research activities. The committee has heard about antimicrobial resistance from a number of submissions and from subsequent presentations from people like Anne Harris of Pfizer. It is far from rare; the unmet clinical need here is enormous yet the pipeline for new drugs or antimicrobials is virtually dry.

Antimicrobial resistance occurs when resistance develops to drugs that at one time killed bacteria—bugs. As the resistance increases, we see more and more often common infections become impossible to treat. These are the so-called superbugs. While we don't really know the size of the AMR crisis, data from the OECD do give some sobering context. They estimate, by 2050, as many as 10,000 Australians will die due to AMR and at a global level it will claim 10 million lives per annum. Now, regrettably, pharmaceutical companies are exiting infectious disease product development, and the pipeline for new products is weak. As of December 2020, there were only 43 new antibiotics in clinical development around the world, and only a quarter of these addressed new classes or mechanisms of action. History shows us that about one in five of these will actually receive US FDA approval.

The real problem with the lack of R&D is a result of market failure and a broken market. Investments aren't happening because investing in antibiotic R&D is a loss-making proposition. These lifesaving drugs are viewed as the last line of defence medicines, meaning they're kept on reserve for only the most serious cases where all other treatments have failed; in short, they are rarely used. In the context of our reimbursement system, where payments are based on volume, it's just not viable to bring new antimicrobials to the market. Countries like the UK, Sweden, the US are looking at models that actually delink return on investment from the volume of sales.

So for Australia, we know where we need to go, we need to know where we stand and we need to bring stakeholders along in that process. That's why we've established a AAMRNet as a key step in that direction. We launched the network in September of last year, delivering on a key recommendation that came from MTPConnect's report on fighting superbugs. And while MTPConnect operates the network, we have significant buy-in from industry across Australia. I might just mention some of our key contributors include Pfizer Australia New Zealand, CSIRO, MSD Australia, GSK Australia, Botanics Pharmaceuticals, Medicines Australia and the Monash Centre to Impact AMR. We have a range of other partners involved. I note the DMTC and acknowledge Mark's presence with us today.

This whole-of-sector representation means that the network is uniquely placed to promote Australia's role in combating drug-resistant infections. We know Australia has strengths in early stage research and clinical trials, and developing new ways of treating infections are being researched. These include things like phage therapies, which are viruses to treat bacterial infections. We're developing rapid diagnostics, antibodies; we are repurposing medicines and we're developing antibacterial vaccines.

We really think that, if we're going to capitalise on our capabilities in Australia, one of the things we need to do is undertake a national capabilities assessment. Mark will probably talk about the work that DMTC is doing in that space but I think there's more to do. I think there's another opportunity in Australia—that is, to really ensure that our clinical trial sector is fit for purpose and ensures that patients continue to have access to innovative therapeutics early on in the development process. There are regulatory pathways and clinical trial requirements that need to be optimised, and MTPConnect is exploring these in a report we're about to publish on Australia's clinical trial ecosystem, so watch this space on May 20th, on International Clinical Trials Day, where we'll present that information to the sector. The last couple of things I'd like to say is that we are strongly advocating the establishment of an AMR-focused accelerator program, much like CARB-X exists, which will really bring additional international dollars into the sector to not only develop antimicrobials but also bring unique skills.

Finally and probably key to this whole problem is that we need to establish a reimbursement program that will encourage investment into antimicrobials that fixes the broken market. So I hope this gives the committee a sense of the challenge that's posed by AMR. We're actually in a really unique position to take steps now. This is a major public health crisis that is looming but, if we've got our act together now, we have time to actually address it. If we leave it for another 10 years, we will be in all sorts of strife.

Dr Hodge : Good afternoon. Thanks for the opportunity to present to the committee. DMTC is an innovation integrator and a specialist manager of collaborative technology development programs and projects. We were established in 2008 as a fit-for-purpose framework to deliver sovereign industrial capability and have a strong focus on the defence and national security sectors. Our operating models are both proven and scalable, as well as being externally validated through a range of ISO accreditations. With seed funding from Defence and CSIRO, DMTC's Medical Countermeasures Program, and particularly the governance structure, which facilitates whole-of-government guidance and leadership, was established back in 2015 and quickly matured. Currently, the program attracts significant co-investment, leveraging government investment by around $3 of sector investment for every dollar of government funding provided. It's now universally recognised as the national capability and medical countermeasures, and in recent years has been developing important links into adjacent themes under the formal and structured guidance from the whole-of-government stakeholder community, including, as Dan mentioned, the collaboration we have through MTP.

The program was, for example, able to be used quickly to pivot, scale up and take on additional activity when the severity of the COVID pandemic and the urgency of Australia's response became evident. Due not only to COVID but to the rising incidence of highly infectious diseases around the world, it's arguably more important now than ever that Australia builds its capacity and capability to deliver effective national responses to infectious disease outbreaks. DMTC's view is that focused collaborations between government agencies, research institutions and industrial partners are the most effective way to achieve this. Our work routinely addresses the nexus between chemical and biological threats of both military and public health concern, as often they are linked to the same causative agent or pathogen.

A recurring theme of national capability audits undertaken in 2012 and 2017 has been that Australia has pockets of world-class biomedical research and manufacturing expertise but improved coordination was required and considerable opportunities exist for skills development and capacity building. As Dan mentioned, DMTC is currently leading the national health security resilience assessment, which is a follow-on to the two earlier audits. It's been expanded in scope to look beyond just medical countermeasures to now include: personal protective equipment; hazard management; medical devices; sensors for chemical, biological and radiological threats; and modelling and simulation. If I could borrow a bit of Defence jargon that I think is relevant to this inquiry, the Chief of Army often talks about the challenge of being ready now and future-ready. Lashing these two horizons together as an acknowledgement of a dynamic and constantly evolving landscape and the need for the very deliberate priority setting, informed investment decisions, and policy and regulatory frameworks that keep pace with the change rather than lagging behind it.

While the world's attention is currently on COVID, our submission and others also raise the pressing issues around antimicrobial resistance or AMR. Credible reports on the potential death toll from resistant pathogens by 2050 suggest a far greater impact than that of COVID to date. The looming AMR threat calls for both an increasing focus on investment to develop novel antibiotics, underpinned by brilliant research and industry focused development, but also better diagnostic tools and technologies and innovative measures to overcome the price and volume constraints faced by drug developers. Our submission speaks to some of these issues in more detail and suggests some matters that the committee might adopt in reporting and recommendations. I welcome the opportunity to take some of your questions.

CHAIR: Thank you. Dr Waterkeyn?

Dr Waterkeyn : Thank you, Chair, for the invitation to be present here today. I would like to make a few brief remarks, as you've all seen the submission and have read it, and I'd like to leave as much time as possible for the discussion. AAMRI is a peak body for medical research institutes across Australia, representing not-for-profit independent university and hospital based institutes. Collectively, our 57 members undertake around $2 billion of medical research each year, with funding coming from the NHMRC, MRFF, state governments, the US National Institutes of Health and more than half the funding now coming from non-government sources, such as the Wellcome Trust, Bill and Melinda Gates Foundation, and other philanthropy and commercial income sources.

AAMRI members are active in over 500 clinical trials and have around 100 new patents awarded each year. AAMRI members work on the full pipeline of medical research from basic discovery right through to drug and medical device development, including translation and implementation, and combination therapies and many of the new novel therapies that are currently being addressed and looked into.

This inquiry provides a once-in-a-generation opportunity to transform Australia's already successful regulatory environment to world class, and I am very excited to be here today because of that. This is so timely and so worthwhile. Australia is a great place to undertake medical and clinical research and exciting new initiatives, such as the Medical Research Future Fund, the Biomedical Translation Fund and Bridges et cetera. They provide new opportunities for the sector to expand. In addition to this welcome investment in medical research, we need to make sure we have the right regulatory environment so that we can attract new medical technologies and industries to Australia and support the existing Australian industry sector, ensuring that the great discoveries we make here in Australia can be developed in Australia for the benefit of Australians.

As you already have our submission, I won't go through or reiterate any of the main points here, but I would like to draw your attention to the three substantive areas of our submission. Firstly, there is the importance of investing in all stages of the R&D pipeline and product development and addressing funding and gaps, including an end-to-end analysis of current initiatives and things that are available for the sector here currently.

Secondly, there is the need to prioritise and resource the development of a clinical trials front door for international investors and also for the Australian corporate entity environment and our patients, and developing a single nationally recognised approval process for ethics, which has been spoken about in quite a lot of detail. This can lead to rapid and streamlined governance approvals for clinical trials of both public and private recruitment sites.

Finally, there are opportunities to revise approval processes and learn from what has happened during this COVID pandemic so that we can get more therapies approved safely and quickly. Many of the things that will be suggested and talked about today and that have been incorporated into the submissions received will also help my colleagues here with their endeavours. Thank you very much for listening and I welcome questions.

Ms McBRIDE: I want to pick up on what you were saying about this being such an exciting time with lots of opportunity. What would best class look like and how do you see, from your perspective, at a federal level the government might be able to support or encourage that?

Dr Waterkeyn : Can I speak for the regulatory affairs process and the regulatory agency? For best class, do you mean regulatory process, clinical process? It's quite a broad question.

Ms McBRIDE: Yes.

Dr Waterkeyn : In terms of best practice, the TGA currently have caps and restricted funding and they're unable to provide a lot of support that the clinical researchers and the researchers need here in Australia and that the biotech companies could really benefit from. I can give you an example of that. Biotech companies often go to the FDA to follow their pre-IND type C meeting process. In fact, I was involved in a 3 am meeting this morning on exactly that. If the TGA had, for example, some form of early-stage interaction where we could gain insight from the regulatory environment here, that would straightaway provide more of a best-practice scenario in Australia. We're not saying we want an IND process; we absolutely love our clinical trial notification scheme—and so do global investors and clinical trials and companies. So we're just saying it would be good to have input from the agency early on to provide advice to people here in Australia. That would be one thing. I could go on about clinical research for a while as well. I'm not sure exactly how much detail you want.

Ms McBRIDE: We're keen to hear more.

Dr Waterkeyn : Okay. In terms of the clinical trial process, there are a lot of gaps. We talk a lot about ethics, and time lines to ethics submissions. But there are other implications as well—things around governance; extensive contracting; the detailed consenting processes; access to patients; and linking in with clinical trial networks and clinical quality registries and all the great sites here in Australia, including private sites and GP practices et cetera that could actually recruit patients for clinical trials. There is no set network bringing it all together. It's very fragmented. When you work in the industry, as I do, it takes a long time to negotiate and navigate all of that. For example, to get a rare disease trial for an orphan indication up and running, you may need 20 sites with a very small patient database, so the safety database is limited. So there is quite a lot of navigation around that.

There are differences between public and private specialised primary clinical services and universities in terms of the capacity to deliver on trials—and also regulatory process know-how. At the moment, there is a massive gap in the industry for medical research institutes, researchers and biotech companies to actually understand the regulatory process and what it means to provide regulatory quality submissions to the TGA—an education process, as they do overseas with the FDA and the EMA and the MHRA. They provide that to stakeholders in their jurisdictions. We don't have that here. That is currently missing.

Ms McBRIDE: What does that look like?

Dr Waterkeyn : If you're doing a clinical trial and you want to put together the data to do a submission, you don't just do the trial and collect the data; there is actually a lot of compliance, a lot of process. There is monitoring. There is sponsor requirements. ICH GCP is just one small part of that. So there is no education forum for people who are entering this industry to get all that information together. They often pay quite a substantial amount of their budgets and line items from their annual budgets to contract research organisations who provide that information. If the federal government were to provide some education access and resource for that, that would go a long way for best practice to support the sector.

Ms McBRIDE: Are you saying the FDA does that, and Europe does that as well?

Dr Waterkeyn : They have initiatives—and the NIH has some amazing initiatives to support researchers and the product development endeavour. You have a discovery, proof of concept, first time in human et cetera—all the way through to post-marketing obligations and exclusivity. And I know that patents, and patent extensions, has come up in this inquiry. That's another thing we don't have here and would really like to have.

When you talk to the stakeholders, there is a mentality in many areas of: 'We've always done it this way. We don't want to change.' We've seen that before with the ethics process; I know that's been spoken about. I guess stakeholders need to embrace change and think about the patients first. Patient advocacy and consumer involvement is wonderful—and it's great to have now because the patients want to see products come to them and they don't want these barriers to be in place anymore. So there is quite a bit there. I have a paper with a lot of detail. I'm happy to submit that after this meeting.

Ms McBRIDE: We would welcome that.

Dr Waterkeyn : Absolutely. No problem.

Ms McBRIDE: Thank you.

CHAIR: Ms Bell.

Ms BELL: Thank you all for coming today. It's a very important inquiry to improve access for all Australians.

Dr Waterkeyn : And very exciting.

Ms BELL: That's right. We hope to make a difference.

Dr Waterkeyn : We all want the same outcomes. It's like I've been in reg affairs for 25 years in clinical development!

CHAIR: I think you need a hobby!

Dr Waterkeyn : I've got many hobbies!

Ms BELL: The committee has talked a lot about the harmonisation of ethics approvals, or a single front door entry point for ethics approvals, as a way forward there. My question is about medical research institutes and how much cooperation there is between them—I might mention the Institute for Glycomics at Griffith University on the Gold Coast, in my electorate—and how much cooperation between institutes occurs now in Australia, between industry patients, clinicians and government. Is there anything the Commonwealth can do to enhance or support that, in your view?

Dr Waterkeyn : Yes, there is a lot of communication. There are strategy networks, governance networks and operational networks that have been set up within AAMRI to communicate common learnings across the sector of the 57 members. I work quite closely with ACTA, the clinical trial networks and the registries. They're all working together now to not reinvent the wheel each time. There are a lot of learnings being gained through those forums, and there are quite a few examples of that around the traps.

In terms of what the federal government could do, the obvious answer to that is: please provide some money. But I think what we really need to do is a gap analysis. We need a full gap analysis from beginning to end. What's provided? We've got the BTB, we've got the BTF, we've got this, we've got that, we've got the MRFF for translation. But there are gaps, and I see them every day. So a full analysis of all that, with a report, findings, a solution, budgets—

Ms BELL: Filling the gaps.

Dr Waterkeyn : Yes—and there are quite a lot of them. They're in the paper I'll provide to you.

Ms BELL: Thank you.

Mr DICK: Thanks very much for coming along today. I'm going to go back to you, Dr Hodge, about clinical trials. We've had a lot of evidence to the committee about how we're not particularly in that space in Australia, due to international accreditation. I want to hear about whether it would be a game changer or whether it would increase the capacity for clinical trials if we were to adopt new accreditations, and about your views on a national register or database for people willing to participate in clinical trials.

Dr Hodge : I might restrict my comments to the database and the capability assessment, if you don't mind, and defer to my colleague, who knows quite a lot more, on the clinical trials regime. Our experience in that is limited. We ran a clinical trial in the early stages of COVID to look at a prophylactic treatment for COVID. It turned out it wasn't successful, so it was closed down quite quickly. It ran through defence ethics approvals and those sorts of things.

In terms of the capability assessments, I think the gap analysis suggested by my colleague on my left is a really critical idea. Dan mentioned that in his submission as well. The first two capability audits that DMTC was involved in alongside DST Group, the defence labs, ended up, by their nature, as a snapshot in time. I think one of the key things is to make these things live documents that can be updated and polled, because everything you do, every intervention you put into the marketplace, shifts the boundaries and the reality of what you're doing, and that gap analysis moves. So I think it's an absolutely critical element of what we're doing. But it needs to be done not just every few years; it needs to be something that can be continually updated so that it can be a tool for governments, both federal and state, and for the sector. As to the technical detail, I will defer to my colleague on my right; you'll all feel a little bit dumber after speaking to me on the detail of clinical trials!

Dr Grant : I might start off, if it's all right, by saying that not all clinical trials are the same. If you look at the Australian sector for clinical trials, there's about $1.3 billion worth of activity happening each year. About $1 billion of that is related to industry sponsored trials. That represents big pharma and smaller companies investing in doing clinical trials in Australia. That represents a $1 billion service export from Australia, where companies come here to capitalise on the R&D tax incentive, our fantastic infrastructure we have to run clinical trials, the great KOLs we have and the fantastic research we do here.

There's also about $200 million to $300 million a year of clinical trials done in our medical research institutes and other university settings, which are investigator initiated trials. That part, as you've heard, probably suffers from a lack of skills in relation to clinical trial design, regulatory reimbursement—all of those things.

CHAIR: GLP.

Dr Grant : GLP—all of those things that are needed in that part of the sector. The industry sponsored trials are well serviced; they are world class. I don't want you to think that Australia is behind the eight ball, in terms of the quality of trials we do or the quantity. I mentioned we've got a report coming out in May. I won't disclose the data—because we're still crunching the numbers—but we are seeing the clinical trials continue to grow. We're seeing, particularly in the phase 1 and phase 2 space, we are more than holding our own in attracting those trials to Australia and delivering them.

I think that's really important, that we are doing a great job, but we do have to focus on maintaining that. Our cost competitiveness is still there but it's getting smaller. The time it takes to get ethics done is better with national mutual acceptance and those processes, but there's still room to improve that. Governance remains a problem, in some cases. The pilot program for the national governance framework, which is ongoing and coming to an end soon, may address some of those things, but I think we have a way to go. But we are doing well. It is a really important sector. In terms of skills, there are programs that are trying to address some of those, and at MTPConnect we deploy a $32 million program for the MRFF called REDI. That has a program specifically focused on clinical trials, and we're doing some work with groups like ARCS to support clinical trials skills, but there is more room to work and we need to do that.

I might end on the comment of needing more money, and that's always a common theme. I'd flip that around a little bit and say we need to use the money we have more effectively. We need to promote commercialisation and collaboration. We need to incentivise researchers, universities and industry to collaborate more so that we're not re-creating the wheel, so that we are working together. I think the COVID pandemic has really shown how industry, government, universities, researchers and clinicians can come together to deliver on really remarkable things. If you think about developing a vaccine and getting it approved and deployed in 12 months, that is a remarkable outcome, and it comes from collaboration, it comes from focus and it comes from being a bit prepared.

In terms of AMR, we have an opportunity to be prepared. We know that antimicrobial resistance will be a problem. We know that some of these other potential public health issues are problems or will be problems, and I think we need to be proactive. We need to identify some key priority areas. We identify knowledge priorities in our sector competiveness plan each year. We pick out areas that we think we have a competitive advantage in, that we think we can do better in and that we think there's a potential to improve patient outcomes from, and we recommend investing in those areas. You've seen the work, perhaps, that we've done around regenerative medicine and the publications we put out about building that sector. I think there are other sectors that we need to continue to focus on.

Dr Hodge : If I can just make a follow-on comment, I think that focus on collaboration is absolutely key. It was the key part of our submission. It's a very important decision to make, in terms of where that funding gets delivered and where it's focused on: is it a product focus or is it more of a capability focus? Most of the work that the DMTC does, through our networks that include Dan's organisation and a number of partners across the country, is very firmly focused on a capability outcome rather than an individual product or individual from the clinical trials.

It doesn't mean we can't run some of the clinical trials or feed into them. It's a lot of that planning capability to look at where these threats are going to emerge from. Even if you don't know which threat it is, it's: what are the top 10 threats and what's this mythical disease X that might be coming out? What are the basic core capabilities that we need to pivot so that you can create a network of individual capabilities in industry and the research sector, rather than betting the farm on one particular pathogen or one particular class of antimicrobials or something along those lines? So I think that capability approach is a really important element of the commercialisation strategy, just to pick up on what Dan said.

Dr Waterkeyn : I think my colleagues have addressed the question very well. I'd just like to expand on the investigator initiated, to farm a realm of clinical studies. Even within those realms, investigator initiated pharmaceutical biotech, there are very specialised clinical trials around gene therapy, stem cell therapies. Even within those sectors there are complexities at the patient access, and the sheer logistics of handling a gene therapy trial is huge. There's a lot that a site actually has to do. It's not only within investigator initiated through to the pharma world, but it's also within different therapeutic areas that can vary quite substantially. Just going back to your question, did you mention patient registries?

Mr DICK: Yes.

Dr Waterkeyn : Could you just repeat that?

Mr DICK: Looking at some sort of national, coordinated approach for people entering into clinical trials of signing up to a national database—not to Big Brother but making sure that we've got a coordinated approach.

Dr Waterkeyn : Yes, I definitely agree that that would be incredibly worthwhile. I think the main problem, in talking with consumer advocacy groups through the circles that I operate in, is public opinion and confidence and having their information on a database. That's a major barrier to opting in or opting out of—

CHAIR: Big issue [inaudible]

Dr Waterkeyn : It's huge. And it has just been further complicated by the GDPR regulations in the EU that have come out. Just because of the complexity of it people are nervous to have their information on databases. Public opinion and confidence has to be there. I'm involved in a project for a clinic—

CHAIR: [inaudible] communities [inaudible]

Dr Waterkeyn : Yes. You talk to consumer advocates from the rare disease area—once they go on to a study and they go on a registry they get bombarded with trial requests. One lady in particular recently said to me, 'I don't know which trial to go on. My disease is an orphan indication. It's rare. We've got patient-centric approaches to things, but I don't know how to navigate which trial I should be on. My treating clinician knows of some of them'. There's no registry for this. I think it's been raised before, an overall registry of orphan indications and products that are available to key opinion leaders and clinicians that work in those areas would be really valuable. There is so much happening in that orphan area and rare disease space at the moment. It's been established as an area of need. With the clinical quality registry that I'm involved in so far it's probably taken about seven months to negotiate the minimum dataset for that. The researchers want everything on there, but patients don't want to sit through 50 million assessments for three days just for the greater good of a registry. There's quite a lot of work to be done in that area.

Dr Grant : I might make a comment on patient trust because I think that is really critical. I think that the only time patients aren't worried about their data being available is when they're sick. We need to find ways to change that, to see that the clinical trials and access to data are viewed as part of the normal therapeutic approach because those data are really critical. I think the other thing is that we do have a piece of work to do around making it easier to get into clinical trials and knowing what's there. There are things out there. There's Clin Trial Refer, which is a program that MTPConnect funded through our Growth Centre initiatives, which is linking clinicians and allowing clinicians to crossrefer to trials that exist. I think there's a piece of work there.

The final thing I'll say is that we need to get this right because we're a small country. We've got 20-odd million people which means we need to make sure that all of those people have equitable access to trials, regardless of where they're at—rural, remote, regional. Teletrials are doing some really interesting things. You'll know about the work that ACTA and others have done around teletrials. That's a great opportunity. The fact that we've moved to telehealth in COVID is another example. But there are hurdles there as well. I think that patient sentiment about being involved needs to be an activity that we reinforce.

Dr Waterkeyn : Can I just add two points to that quickly?

CHAIR: Yes.

Dr Waterkeyn : Twenty-five words or less—

CHAIR: You've just used five!

Dr Waterkeyn : The real world evidence point that was being made there, but also the telehealth and the teletrial side of it—it has been absolutely fantastic to see the trial come to the patient instead of the patient having to go to the trial. That's been a massive improvement in the sector. Was that 25 words? Sorry!

CHAIR: I think it was more than 25! Mr Zappia.

Mr ZAPPIA: Thank you. I have one general question on clinical trials. I would imagine that before a trial is established there would have to be a reasonable expectation of the outcome. Are you able to tell us roughly how many clinical trials would fail and, therefore, prove not to be beneficial—that is, the expected outcome?

Dr Grant : Maybe I can answer that a little bit by talking about drug development in general. For every 10,000 compounds that are thought of to be created into a medicine, one makes it onto the market.

Mr ZAPPIA: One in 10,000.

Dr Grant : One in 10,000 from just a chemical. As you move into the clinical trials, as I said, about one in five that start clinical trials might make it through. But please don't think of the clinical trials process as failing if a drug fails clinical trials. The clinical trials process is designed to prevent drugs from getting onto the market that aren't safe and that aren't effective—

CHAIR: For the particular—

Dr Grant : For that indication. So the failure of a drug for safety concern is actually a win for the patients. But there is attrition in there; there is a substantial amount of attrition, and there's a long time period. So there's somewhere between 10 to 15 years from the idea through to getting a drug onto the market. It's not an easy process.

Mr ZAPPIA: Yes, but the outcome in that case is actually a success because it's established something. I'm trying to allude to where the expectation would be that you would get a certain outcome but that's not what you get; therefore, regardless of whether it's that the drug shouldn't be used or should be used, the outcome doesn't meet the expectations.

Dr Grant : I think it's fair to say that academics and clinicians don't take things into the clinic that they think are going to fail. Ethics committees don't approve things going into the clinic where the preponderance of data suggests that they're not going to succeed, so I think the expectation is that they will succeed, but it is very challenging to get a drug onto the market, so you will continue to see attrition in that process.

Dr Waterkeyn : The clinical trial process is not just one trial and one registration. Obviously you have phase 1 entry, phase 2, phase 3. So, when you say a trial will fail, do you mean a pivotal phase 3 trial that's for a registration purpose and for a label claim with the FDA, or do you mean a phase 1 study progressing to phase 2? I worked for 10 years at Nucleus Network, which is the phase 1 unit here; I actually established it based on STI funding from the government many, many years ago. We used to run 50 trials per year back then. Now I think they're up to around 200 per year. For first time in human phase 1 entry, probably about five to 10 percent of those would progress to phase 2 for a whole realm of different reasons, so it's a very broad thing to consider. Nothing can be taken in isolation. It's completely product specific and patient specific.

Mr ZAPPIA: I asked the question for this reason: they obviously come at a cost; therefore, when determining how much money should be set aside for trials and who should get it, the possible outcome might be a consideration. What I'm trying to say is I wouldn't like to see governments just simply throwing around money for the purpose of having another trial, unless there's a reasonable expectation that the trial will produce the outcome that would be expected. If that's the case, how many times does that happen?

Dr Waterkeyn : How many times? I don't have any strict data on that. I can only answer that based on anecdotal and my own experience. Translational studies are one thing. Pharmaceutical development and product development ones are another. So it's a very hard question to answer.

Mr ZAPPIA: That's alright.

Dr Grant : It's important to remember that companies don't put drugs forward into trials unless they have an expectation that they will succeed. When I mentioned about the challenges of developing antimicrobials, the net present value of an antimicrobial now is estimated to be minus $50 million, so that's where the market has failed: companies may see that there's a drug that could move through but they realise that the reimbursement pathways and potential don't exist to recoup their investment. From an industry perspective, those calculations are made very early on in terms of understanding the cost to benefit ratio. I don't want to focus just on price and dollars because it's about patient outcomes. If you don't have positive patient outcomes, you don't have a drug that actually makes any money. All of those things are considered, but they get it wrong quite often. That's the nature of science.

Dr Waterkeyn : You also need to consider the information package that goes with a trial. There's a lot within a trial. There are objectives; there are endpoints; there is inclusion, exclusion criteria; there are investigative brochures; and there's a whole bunch of pharmaceutical development work. So the whole thing has to be looked at as a package in assessing anything and whether it's going to succeed, meet its end points and move to the next level of development. That's why the IND process exists, I guess, with the FDA; they review all of that, but that's a lot of work and that's a lot of information.

Ms BELL: Per drug?

Dr Waterkeyn : Yes, per drug and even per patient now. The inclusion and exclusion criteria and the objectives and the end point—especially the end points; if you fail your primary end point, what do you do then? So you always have to have contingency plans in place. I'm going through that at the moment.

Dr FREELANDER: Thanks for coming along today. It's been a really interesting experience for us all. I've just got a couple of questions. Perhaps I can start with Dr Grant. Shouldn't we be including agriculture in this discussion, because aren't the majority or over half of our antibiotics being used in agriculture?

Dr Grant : Absolutely, so the One Health approach is critical. The network recognises that. Our network was set up specifically so industry could have a voice in that sector as it relates to human health, but you are absolutely correct. We're not suggesting that things have to happen in isolation. Agriculture is a critical component in this, and they are involved in the broader conversation.

Dr FREELANDER: Are agricultural pharmaceutical companies investing in your research in antimicrobials?

Dr Grant : I think that there probably is investment in repurposing of human drugs in agriculture. That's probably where part of the problem comes from. Agricultural products clearly don't bring the premium needed to develop the innovative drugs that could then be used in humans.

CHAIR: You haven't been to my vet!

Dr Hodge : There are interdepartmental discussions—I would probably classify them at the nascent level at the moment—around what can be done to pull precisely that network together to look at, perhaps to your point, money that's been invested over here. One of the key challenges has been getting a line of sight into everything and where it makes sense to join that up from one sector to the other. I can't comment on how detailed those discussions are, because I just don't know, but I do know they're happening.

Dr FREELANDER: There have been difficulties even with supply of antibiotics in Australia of late—worse because of the pandemic, but before that as well. I think CSL used to be a big manufacturer of antibiotics in Australia, but no longer. Are there any innovative new companies in Australia that you're aware of that are interested?

Dr Grant : There are small companies that are trying to develop antibiotics and anti-infectives in Australia, and there's a lot of research coming out of universities like the University of Queensland and other places. That is leading research, but the real problem we see is that they can only take it so far, and then we have this market failure that precludes them taking it through into the later stage clinical trials and getting it onto the market. That's what we need to address: capitalising on those early stage opportunities and keeping them flowing through so they do get to the market.

Dr FREELANDER: But why is this failure happening in Australia? We seem to be improving our clinical trial structures and ethics approval, but why aren't we getting anywhere? Is it purely a matter of lack of finances, maybe?

Dr Grant : I might just answer first in terms of antimicrobials. It's that market failure where in Australia we're very good at early stage research and translation into the clinic, and we can take things to a certain point, but at some point in the pharmaceutical sector a large multinational company comes on board and tends to licence the product, usually in phase 2. Then they do phase 2 and the large pivotal phase 3 studies which cost hundreds of millions of dollars. We can do that, and we see drugs like that happening in Australia. Gardasil is a fantastic example of a drug that was developed at the University of Queensland by Ian Frazer and now has positioned Australia to be probably the first country in the world free of cervical cancer. It's had huge returns for patients, it's had huge returns to the university, and that's a great success story.

In terms of antimicrobials, the buyer or the licensor, the person who will do those phase 3 trials probably doesn't exist as frequently as it used to, because large companies have put their hands up and said, 'We can't invest hundreds of millions of dollars into a program that is not going to get reimbursed.' And that's why the models in the UK and other places, where they're de-linking the actual prescription of the drug to the reimbursement process, are attractive. It ensures that those drugs we develop, that we put on the shelf, that we don't use except in unique situations, actually can be developed. So they're ready when we need them. We have the capabilities. We are seeing small companies develop novel therapeutics and devices that are moving through all the stages of clinical trials. Antimicrobial resistance, or antibiotics, is the other issue of market failure.

Dr Hodge : There are new manufacturing technologies coming online as well that will be part of that.

Dr FREELANDER: Right, and is defence materiel interested in that sort of—

Dr Hodge : Yes, that’s part of the program. It's things like flow chemistry that allow you to do—it's not as much of a capital investment. You can pivot a lot easier in smaller batches.

Dr Waterkeyn : When you first mentioned agriculture, I was thinking canola, GM, the OGTR and moving to immunotherapies and gene therapy.

Dr FREELANDER: We can talk about that later.

Dr Waterkeyn : No, it's fine; we don't need to in the context of the discussion. Moving something from the agriculture world, and even the veterinary world, to the human medicine world is a massive undertaking. Humans are obviously very different in terms of the level of information that's required within dossiers. Is your question around the level of regulatory information and regulatory process that is required or more around the holistic approach of things, or if the question is more centred around collaborations?

Dr FREELANDER: Collaborations and how we can get the flow going the other way.

Dr Waterkeyn : We’ve seen that a little bit in the medicinal cannabis space, though—how you can get the flow moving the other way. Again, a lot of the conversations are being had between collaborators that know each other.

Dr FREELANDER: Yes.

Dr Waterkeyn : You have to find a way to look at a broad communication strategy, a broad platform. Maybe people need to opt into some form of collaborative platform to do this sort of thing. Otherwise it's really up to everyone doing their due diligence and their market research and then approaching companies.

Dr FREELANDER: Yes, okay.

CHAIR: It's been a recurring theme on which I'm still a little bit confused in clinical trials. We’ve had a lot of witnesses and submissions saying that the diversity of ethics requirements is a big barrier. But then at the same time we've heard that, as alluded to today, that's potentially about to be solved through mutual recognition. Therefore, we don't really have to worry about that being a barrier. And then others have said, it's actually not ethics, it's actually different governance requirements. And, Dr Grant, I think you mentioned there's work to streamline that. Can someone tell me for sure: are we about to get ethics considerations right for clinical trials in Australia?

Dr Waterkeyn : Who wants to go first on that one!

CHAIR: One of you!

Dr Waterkeyn : I'm happy to. Twenty years ago I was working with the Victorian Managed Insurance Authority when the NMA was first put forward and ethics was a massive barrier. We've come a huge way since then. There are still a lot of state boundaries. We don't have a federal approach. Ethics—

CHAIR: But mutual recognition implies that, if you get a tick at the Royal North Shore Hospital, it's going to give you a tick at the University of Western Australia and it's going to give you a tick at Royal Hobart.

Dr Waterkeyn : It's not mandatory. And that's the problem. So we're still in a situation where—

CHAIR: Sure, mutual recognition is not mandatory. But, presumably, whoever is organising mutual recognition—that's a good question, actually; I want to know the answer to that—is going around collecting institutions, hospitals and health departments to participate.

Dr Waterkeyn : It doesn't quite work that way.

CHAIR: Shouldn’t it?

Dr Waterkeyn : Should it? Yes. But it doesn’t quite work that way in practice.

CHAIR: One of the submissions we had today said there should be a national centre for ethical considerations and clinical trials—a one-stop shop.

Dr Waterkeyn : Like New Zealand. New Zealand has something similar to that.

CHAIR: So mutual recognition will be limited by whether institutions participate in mutual recognition.

Dr Waterkeyn : Correct.

CHAIR: Have we got any sense of how big a problem that will be when the scheme rolls out, because it's not really operational yet, is it?

Dr Waterkeyn : NMA, yes, it's been operational for years. The thing is you have to opt into an NMA process.

CHAIR: But some witnesses said that there's a process that's shortly going to commence which is going to largely eliminate the multitude of ethics committees, and considerations before that comes to pass.

Dr Waterkeyn : Are they talking about the review of the national statement on human research?

CHAIR: I don't know.

Dr Waterkeyn : Because there are quite a lot of initiatives in there that will solve quite a lot of problems.

CHAIR: So ethics are still a problem is the short answer.

Dr Waterkeyn : Yes, and everyone tends to focus on ethics, but, as I said, we've come a long way in 20 years.

CHAIR: How do you create a national system of governance, because this is something that could be necessarily different from institution to institution?

Dr Waterkeyn : Yes. There is a good-practice program which was mentioned earlier which has come some way towards solving that. Governance is tricky because you've got tertiary teaching hospitals, public hospitals, private sites and university recruitment sites. Some private sites don't even understand governance. You have to explain it to them and then you have to provide forms for them. I'm often generating forms for these private sites that don't understand governance arrangements. So, operationally, there's a long way to go. You can have a policy, you can have a mandate, but you need to operationalise it, and I spend a lot of time doing that with sites to get them on board quickly for governance purposes. That's just an example.

CHAIR: Could the Commonwealth encourage the voluntary process of mutual recognition by saying that, unless institutions participated, they wouldn't get research funding?

Dr Waterkeyn : I'd rather not comment on that, if that's okay!

CHAIR: What would be wrong with that approach?

Dr Waterkeyn : What would be wrong with that approach? I don't know if I should really answer that or take it on notice. I think if you—

CHAIR: Do you think you'll be beaten up, when you go back to the office, by your colleagues!

Dr Waterkeyn : I know, right? 'Oh my god, why did you say that?' Yes. If they're not going to get research funding, it depends on what type of research funding we're talking about here.

CHAIR: It's a condition of funding that they be participating in a national scheme for mutual recognition.

Dr Waterkeyn : Yes—and they have to show that they've got processes, standard operating procedures, forms et cetera to comply. So an accreditation system, an ISO type system, a standard, a guideline or something like that would be really beneficial. If you comply with the guideline, you can get the funding. Federal-wide assurance numbers for accepting funding as an institution from the NIH is one of those things where you have to show that Australia has the right ethics system in order for NIH to give you their funds, and a research institute has to provide an FWA number—things like that. And I think that's actually part of the national statement review. It's in there, because I did a consultation on it. I'm pretty sure it's in there.

Dr Grant : But we do need to be careful to remember that not all of the trials that we conduct in Australia attract government funding, so that $1 billion in industry—

CHAIR: But all the institutions that are going to be conducting the trials do.

Dr Grant : Some of them do; some of them may not. I think there need to be some incentives to make that work, because I think your question of us is 'Are we there yet?' really in terms of either trials or governance. I would say that we're never going to be there, because every time we improve the system we'll look then for more efficiencies, and time is really a critical component of drug development, because, for a drug that's on the market for a year and sells a billion dollars worth, if it takes you a year longer to develop it, you lose a year of your patent, you lose a billion dollars and patients lose access. So I think we're always going to be looking to push things, and I think I should mention we've come a long way in terms of ethics, but we'll continue to try, we need to continue, to improve that. We're coming along in governance, with this national framework that's being trialled, but I think there will be other things that we can do.

Dr Waterkeyn : The review of the national statement will help.

Dr Grant : So I think we're not there yet.

CHAIR: We're about to run out of time. I just want to ask one question, which one of you might have a view on, which is about repurposing existing drugs. If it's off patent, there's obviously very little commercial incentive for a pharmaceutical company or a supplier to examine the potential of repurposing that drug—well, it depends on what it is. I suppose, technically, if it's being used for a new purpose, then it still has to go through the process. How do we make re-examining and repurposing existing drugs, particularly those that are off patent and readily available, financially attractive, and is there a workaround?

Dr Waterkeyn : We should be getting a lot of information from the submissions from the consultation that's just closed with the TGA around repurposing. You will get a lot of information from that, and there are many, many issues to consider there from the pharmaceutical companies—

CHAIR: I'm talking about the financial model to actually make it something that there's more investment in.

Dr Hodge : We saw this in the early days of the pandemic, with everything from drugs to ingredients that we needed to source from offshore because they are off patent—all of a sudden there were borders being closed and we couldn't get them. It was a sovereign industrial capability issue for us. I think that is a genuine question that needs to be looked at. Again, it points back to the national health security resilience audit, looking at the issues where you could actually stand up a manufacturing capability fairly quickly in response to an emergency need, emergency use authorisations and these types of things. That's not exactly answering your question; it's just acknowledging that I think you've pointed out a fairly challenging area.

CHAIR: I'm wondering whether it's goes to the point that you're making—when there's not a market incentive to be investing in something, it's about trying to find the workaround that solves that problem.

Dr Hodge : Where you've got a really dire need—and we saw this, again, with COVID—there's a sovereign industrial capability requirement that there is a premium to be paid in creating that so that you don't find yourself short when it's really hitting the fan, as it were.

CHAIR: Unfortunately we're out of time. That was a fascinating discussion, so I thank the three of you for coming along this afternoon. We very much appreciate your input. You'll be given a Hansard transcript of today's proceedings. If there are any corrections to be made to that, could you let the committee secretariat know as soon as possible. If there is any additional information that you've agreed to provide, you could do that by 7 May. Thank you for your time.

Pr oceedings suspended from 15:46 to 15:56