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Thursday, 6 March 1980
Page: 653

Senator PETER BAUME (New South Wales) - The Senate is considering the Commonwealth Serum Laboratories Amendment Bill. Several honourable senators have made contributions already. I was particularly attracted to Senator McLaren's remarks when he described with pleasure his visit to the Parkville campus of CSL and also his visit to Woodend.

He described the horses and the cows at Woodend. Senator McLaren was hiding his light under a bushel. We know what really attracted him to the Woodend farm of CSL. Let me refer to the annual report of the Commonwealth Serum Laboratories for 1978-79. The honourable senator has already drawn this matter to the attention of the Senate. The report states that the specific pathogen-free poultry flocks housed at Woodend produced over 50,000 eggs. I understand that the honourable senator's interest would have been highly professional and based on his previous occupation. He did not say very much about the functions of CSL, however, in producing vaccines or drugs.

Senator McLaren -I could have told you about the all white mice and guinea pigs at Parkville.

Senator PETER BAUME -The honourable senator talks about the 140,000 white mice. I am sure that Senator McLaren patted every one of them and felt quite at ease with them all. This amending Bill has had a long gestation and its drafting has been really quite difficult. Whilst at this stage I do not agree with the points raised by my colleague Senator Townley they were very much in the minds of Government members when we were looking at the proposals for the amending Bill and trying to resolve what was the proper way to deal with the problems facing the Commonwealth Serum Laboratories. CSL does have problems. The problems can be set in some kind of historical perspective. Honourable senators will be aware that in 1914, with the outbreak of the Great War, Australia suddenly found that it had no indigenous drug industry. Its supplies of a whole range of products were cut off. Honourable senators will be aware that one result of that occurrence was the emergence of the Nicholas company to fill the gap with the production of aspirin which was a drug urgently needed at the time. The existence of some minimum adequate drug manufacturing capacity has a strategic and national value as well as a commercial value.

CSL fulfils a function which is unique and necessary in this country. I think that my colleague Senator Townley would have no difficulty in agreeing that there is a specific function for CSL. Senator Puplick has referred to it and I will just mention it again. This country cannot depend upon exotic pharmaceuticals entirely. We cannot depend upon exotic vaccines. There are other reasons why we should be wary also about being totally dependent on other countries for our supplies of drugs. One area in which CSL is heavily involved is the production of insulin which is an essential drug tor some of those with diabetes, i am aware that recently in the United States of America a lot of concern has been expressed because one of the major nongovernment pharmaceutical companies, through a series of manoeuvres, had virtually cornered the insulin market. The American anti-trust mechanism had operated to force this company to divest itself of some of the control it had over the supplies of insulin.

It is desirable that this country has a serum laboratory to carry out certain essential functions. I remind the Senate again that CSL is Australia's sole source of insulin. It is our sole processor of blood fractions. I will not weary the Senate by referring to the debate we have had over the years about the recurrent shortages of blood fractions. It is the sole manufacturer of human vaccines. It has a large capacity to produce penicillin. It is a major manufacturer of veterinary medicines. It is our World Health Organisation reference centre for influenza and brucellosis. It is the national rare blood group reference centre. That may not mean much unless a person has a rare blood group. For people in that category it is very important that we have this kind of reference centre. For many of these activities there is little profit. There is, however, national interest and national importance. That kind of function for CSL is very important. I would imagine that no honourable senator who has taken part in this debate would want to deny that function or deny that importance.

Senator Gietzelt - Senator Townleydoes.

Senator PETER BAUME (NEW SOUTH WALES) -I do not think that Senator Townley denies that function. His concern is with the other functions which this Bill will give to CSL. Why would someone of my political persuasion who might take on board the general concerns expressed by Senator Townley agree to this kind of Bill and to these kinds of proposals which allow CSL to take on new functions and to produce any kind of prescribed pharmaceutical products provided that they are prescribed by regulation and the Parliament does not disallow them? The reason is that we cannot see any other way to move. If we want CSL to continue to perform the functions which we consider to be important, for example, to make insulin, the biological constraint is no longer reasonable or meaningful and will do nothing else but make trouble.

It is hard to know what is a biological product or what is not. Senator Puplick already referred specifically to that part of the report on CSL- the Reid-Nossal report-which emphasised the difficulties in deciding what is a biological product. Let honourable senators consider insulin. Some insulins are made and zinc is added to them. Zinc is a metal. Ls that product now a biological product? It" it is not, is CSL still entitled to make it? It would be ridiculous if the Commonwealth Serum Laboratories found itself unable to carry out certain functions which it was clearly intended it should carry out when the Commonwealth Serum Laboratories Commission was established. This could be due entirely to the march of technology. The fact is that CSL is being overtaken by modern processes which were not available at the time it was set up. In the days when it was set up it was necessary to buy pancreases and to extract insulin. This was purified and injected into people. Senator Puplick has already indicated to the Senate that in years to come this may not be the way in which insulin is made. Yet we will still want some organisation like CSL to carry out the functions and to make a whole range of products which other people probably could not do at the same level of expertise. Certainly other people have not traditionally done so. Methods may be used which no longer entitle CSL to claim that what it is doing it is doing under a biological constraint. That word 'biological' has limited everything which CSL has been able to do up to now.

I do not refer just to insulin. We still make penicillin by fermentation, but we will not always do so. Senator Puplick referred at some length to recombinant DNA. He is talking about teaching germs to produce the drugs that we want or using other methods of synthesis where we can put together the proteins we want other than just by extracting them from living tissues. When that happens it may no longer be a biological process. We are therefore obliged in the best interests of CSL to review the charter under which it operates. This is the difficulty which faced honourable senators on this side and members of my party when wc sat down to examine how to resolve the problems.

I am not about to give CSL a free charter to enter the field of pharmaceutical manufacturing as some favoured government organisation to compete unfairly in the market. 1 am prepared for CSL to be given every freedom to do that job which it does best, for which there is no alternative in this country, and to do it without unreasonable constraints. The mechanism which we developed was that of suggesting that CSL should be able to carry out functions prescribed by regulation so that the Parliament and people such as honourable senators would be able to disallow any regulation giving to CSL any function which this Parliament considered inappropriate. What could be fairer than that kind of proposition? We would have the right to withdraw from CSL those kinds of functions if we thought they were not right.

Blood group fractions will be needed more and more. We are not yet at the stage of making them synthetically, but one day it will happen. I want CSL, as our national reference centre, to be able to do that job which it does well. Human growth hormone, an important chemical, is in short supply in this country. Human growth hormone can change the lives of children with dwarfism, but it cannot help them unless it is available. Human growth hormone will be available by biosynthesis by obedient microorganisms before much more time has elapsed.

Senator Puplickemphasised that there will be an interregnum yet before we can look to genetic engineering to produce for us the chemicals we need. But it is absolutely necessary for CSL to be in a position to respond, to meet the objectives and the genuine national goals of governments and the public. Of course, CSL produces and holds our supplies of vaccines, such as flu vaccine. It does that in ways which are nonsustainable commercially. It holds much greater supplies of vaccine than it could hope to sell. It holds supplies in reserve for other countries. It does that as a national service. I think that it should continue to do so. So I am not attracted to the idea that the Government should even consider divesting itself of its involvement in CSL and in the activities which it undertakes.

I will be brief on this, but I would say that the least satisfying part of the report prepared by Mr Reid and Sir Gustav Nossal was that section which dealt with Fawnmac. Whereas their arguments with regard to the Commonwealth Serum Laboratories were cogent, coherent and well argued, no consistent or coherent argument was advanced with regard to Fawnmac, apart from the observation that it was desirable to keep a window on the industry. I do not know quite what that means. It might be that there were good reasons for keeping Fawnmac, but I do not think that the Reid-Nossal report, excellent as it was in relation to CSL, was adequate to allow anyone to argue that Fawnmac should be retained. People may want to retain Fawnmac because of the values they hold. Some of my colleagues on the other side of the chamber have values which would make them want to retain Fawnmac. Some of us on this side of the chamber would like to dispose of it under proper conditions. My only comment is that the report on CSL and Fawnmac produced by Mr Reid and Sir Gustav Nossal did not help us to resolve or to settle that argument

I do not want to delay the Senate any further. I wanted to make the point that the resolution of the problem of how to allow CSL to do its job seems to have been achieved by giving it a broader charter, by allowing it to undertake prescribed functions disallowable by the Parliament. I conclude by saying, as other speakers in this debate have said, that CSL is a fine and unique organisation in this country. It has a proud record of service to the Australian community. It is an ornament to the nation. I believe that this Bill, which seeks to amend CSL's functions and capacities, is overdue. I support the Bill.

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