When The Pain Persists

It’s time to cure Australia of its reliance on foreign-made medicines. By Tim James.

When we’re sick we seek the right medicine to treat us. Similarly, when a nation’s economy is weakened – for instance by a pandemic – we must seek ways to make it stronger. We can do this if business and policy leaders work together, pulling the right policy levers to take us forward.  

How can we create jobs, attract investment, drive economic growth and develop export opportunities? Leaders around the world are all asking these questions.

The COVID-19 crisis has required decision makers to ask hard questions about sovereignty and security. A number of sectors have significance that goes well beyond economics. They are sectors intrinsically linked to national security, resilience, self-reliance and responsibility to citizens. These are the sectors policy makers must now look at more strategically post-pandemic.

One such essential sector is the medicines sector. Australia’s drive to urgently meet the need for medical equipment and medicines during COVID-19 has been well documented. There are remarkable examples of adapting and acting to secure face-masks, sanitiser, test kits and ventilators for instance. Even more strategically significant and high value are medicines, and pharmaceuticals particularly.

Developing and making medicines is virtuous and valuable. There’s little more important than serving the cause of human health whilst also strengthening the economy. And it is precisely the sort of sector that should strategically lift up in our national interest. This obviously applies in the context of a pandemic but also more broadly today in the modern, global economy. 

Ninety per cent of Australia’s medicines are imported. We are exposed to the risks and uncertainties of a complex global supply chain, as this pandemic has demonstrated. The influence of China and India on global medicines supply is bigger than global market statistics would suggest because many of the raw materials to make a medicine come from these low-cost economies. While the Australian pharmaceutical sector generally maintains an inventory of medicines for six months, and this has stood up well during this pandemic, there have been recent instances of low stock and community concern, for example in relation to epi-pens and influenza vaccines. 

In late March, journalist Chris Uhlmann picked it well by pointing to how COVID-19 will change our economy. “No strategically important business can be allowed to fail and new industries must be built here and stay here,” he said. “At the top of the list must be medical equipment and pharmaceuticals.”

Industry Minister Karen Andrews made it clear recently that Australia must lift its pharmaceutical manufacturing capacity. She said it was wrong for Australia to be so reliant on global supply chains and urged Australians to change the way we look at manufacturing. She raised the need for the pharmaceutical sector to be able to pivot to produce different medicines and the need for good supplies of essential medicines. 

The sector needs a strategic approach by policy makers and industry leaders alike. A coordinated, long-term plan for the sector’s future is needed. Many policy areas need to be considered and balanced to optimise Australia’s opportunity, including trade, fiscal, health, innovation, education, employment and industry policies. It won’t happen in the absence of planning and action.  

No sensible contributor will advocate for a return to protectionism nor big government handouts for this or any other sector. It would be uneconomic and irresponsible to do so. But getting policy settings, plans and industry incentives right can deliver this smart sector more smart jobs for Australians. And focusing on where we have leverage and opportunity. Australia will not compete with low cost economies on commoditised, low-cost, simply manufactured medicines, but rather on research & development and sophisticated manufacturing of modern, complex, high-value medicines.

Just this week the Prime Minister proudly marked Australia’s medical community’s achievement in being world-first in growing the coronavirus in a lab outside China and showing strong progress towards a locally developed COVID-19 vaccine. Clinical trials in Australia have a world-class reputation. The largest business on the Australian Stock Exchange, CSL, is a world-leader in medicines and plasma. And, as is not so well appreciated, medicines are a major export earner for Australia. In 2017-18, locally manufactured pharmaceutical products generated about $1.6bn in exports to over 100 countries as reported by Medicines Australia. This can grow markedly as demand for medicines worldwide continues to rise. 

The fundamentals Australia offers the medicines sector are strong and sound: a highly educated workforce; strong healthcare system; leading facilities; system integrity; stable and good governance; and outstanding quality and safety systems.

Multinational pharmaceutical company AstraZeneca has a manufacturing facility in Macquarie Park that produces 580 million respiratory medicine units and exports them to 19 countries. It’s a shining example of Australian manufacturing and is expected to grow by 15 per cent per year for the next five years. As is well known within the sector, the history of this facility goes back to a government incentive scheme of the late 1980s (Factor F as it was known) which delivered many multiples of returns relative to the government investment, and still does.

More recently, in January this year, Novartis Global announced an agreement with Cell Therapies to manufacture Kymriah®, at its production facility within the Peter MacCallum Cancer Centre in Melbourne. Cell Therapies is an Australia-based, globally-active commercial contract development and manufacturing company, specialising in cell therapy, gene therapy, regenerative medicine, and cellular immunotherapy products. Kymriah®, an innovative chimeric antigen receptor T cell (CAR-T) treatment, is approved by the Therapeutic Goods Administration (TGA) for use in Australia. It is an immunocellular therapy, a one-time treatment manufactured individually for each patient using their own T cells, genetically reengineered and programmed to recognise and destroy cancer cells. Simply, it’s individualised and inspirational science.

Novartis has been a pioneer in individualised medicine, making a bold early commitment to reimagine cancer care in the emerging field of CAR-T therapies. The Cell Therapies manufacturing facility within the Peter MacCallum Cancer Centre will be used to supply patients with Kymriah in Australia and across the world. Novartis is in the process of transferring the innovative manufacturing technology for Kymriah to Cell Therapies, with the goal of manufacturing capabilities being ready in the second half of 2020. Novartis has acknowledged the Morrison Government’s $80 million investment to the Peter MacCallum Cancer Centre to create Australia’s first Centre of Excellence in Cellular Immunotherapy which recognised the significant potential of CAR-T to revolutionise cancer treatment.

The present pandemic reinforces that Australia must address its dependence on global supply chains for medicines. Making medicines matters to people as much as it does to Australia’s economy – and now much more so to Australia’s security and sovereignty. Greater local capacity to develop and manufacture medicines is achievable in Australia and merits considerable policy focus amidst and beyond COVID-19. 

Tim James is a former CEO of Medicines Australia.