Pharmaceuticals Industry Strategy Group

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Pharmaceuticals Industry Strategy Group

• 3 December 2008
• Peter Chesworth
• General ManagerPharmaceuticals and Enabling
  Technologies Branch
• Department of Innovation, Industry, Science and
  Research

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Pharmaceuticals Industry Strategy Group(PISG)

• Announced in April 2008 by the
  Minister for Innovation, Industry
  Science and Research, Senator the Hon Kim Carr
• 24 members from across the pharmaceuticals
  industry
• Co-chairs
• Dr Brian McNamee, CEO of CSL
• Mr Craig Pennifold, Head of Innovation Division,
  Department of Innovation
• To develop 10 year strategic plan to increase
  investment in RD, clinical trials and
  manufacturing.

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Pharmaceuticals Industry Strategy GroupTerms of
Reference

• Develop a strategic plan to increase
  pharmaceuticals investment in Australia
• Examine drivers and barriers
• Identify strategies to
• overcome impediments and capitalise on
  opportunities
• build on Australia's competitive strengths
• Provide a case for suggested actions
• including how they create net economic and social
  benefit

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Pharmaceuticals Industry Strategy GroupProcess
to Directions Paper

• Six meetings, one every month since July 2008
• Directions Paper released in September 2008
• Available at www.innovation.gov.au/pisg
• Final report to Minister Carr by end of 2008 for
  his consideration

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PISG Directions PaperThe Australian
Pharmaceuticals Industry

• Australia's 2nd largest manufacturing export
• 3.9 billion in 2007
• Employs over 40,000
• Made up of
• local and multinational companies
• originators, generics and biotechnology companies
• RD, clinical trials and manufacturing

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PISG Directions PaperChallenges

• Industry is global in scope
• Changing business model
• 'Blockbusters' ? personalised medicine
• Biotechnology companies play an increasingly
  important role
• Many medicines coming off patent
• Global rationalisation
• Current profile of the Australian industry is not
  sustainable

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PISG Directions PaperAustralia's Strengths
Include

• World class medical research base
• Infrastructure in universities, medical research
  sectors hospitals
• Highest possible safety standards
• Efficient effective regulatory approval
• Specialised/niche manufacturing expertise
• Build on these strengths

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PISG Directions PaperKey Drivers of Investment

• The changing nature of medicines
• RD
• Quality scientific medical research
  infrastructure
• Strength of the intellectual property regime
• Clinical Trials
• Availability of clinical trial sites and patients
• Speed in regulatory approval
• Cost
• Manufacturing
• scale, cost, IP protection, quality, high level
  skills and specialised capability for niche
  production

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PISG Directions PaperKey Barriers to Investment

• Tax
• Australia's corporate tax rate higher than OECD
  average
• RD
• lack of critical mass
• infrastructure gaps
• few globally significant discovery companies
• Clinical Trials
• small population
• increasing difficulty in identifying and
  recruiting patients
• declining cost speed of study start-up
  competitiveness
• Manufacturing
• not cost competitive
• lower incentives than other jurisdictions

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PISG Directions PaperVision for a Sustainable
Industry

• Australian pharmaceutical industry has the
  potential to create a sustainable future by
  building on strengths
• high quality RD
• clinical trials
• high value added specialised/niche manufacturing
• The transition will depend largely on the efforts
  of industry
• Government has a role in facilitating this future

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Considering the Role for Government Action

• Appropriateness Activity is directed to areas
  where there is a role for government to fill a
  gap left by the market
• Effectiveness Activities to have clear and
  consistent objectives and represent value for
  money for the expenditure of taxpayer funds
• Efficiency Government programs to be
  administered and delivered in the most efficient
  way achievable, taking into account both short
  and long term economic and fiscal consequences
• Integration A whole of Government approach to
  consistently deliver the Government's policy
  objectives within clearly defined lines of
  responsibility
• Performance assessment Government activity to
  be subject to robust performance assessment and
  measurement
• Strategic Policy Alignment Proposals to address
  whether the activity is consistent with the
  Government's strategic long term policy
  priorities

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Considering the Role for Government Action

• Net economic and/or social benefit

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PISG Directions PaperA Sustainable Pharma
Industry Requires

• Predictable, timely and transparent regulation
  and
• reimbursement systems
• A clear and streamlined path to market
• An appropriate and balanced intellectual property
  regime
• Strong and effective capital markets
• Competitive taxation arrangements
• An appropriately resourced tertiary education
  sector producing high quality, job ready
  graduates
• Strong, effective collaboration between industry
  and academia

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PISG Directions PaperSuggested Role for
Government includes

• Maintain Australia's strong medical research
  base.
• Ensure graduates have the appropriate skills
  base.
• Create regulatory environment that supports high
  quality RD and does not unduly obstruct clinical
  trial activity.
• Assist companies to make investments with
  significant net economic social benefit a
  sustainable annuity

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PISG Directions PaperReview of the National
Innovation System

• PISG supports the recommendations that will help
  provide capital for early stage biotechnology
  companies.
• Competitive Innovation Grants
• Improved access to venture capital
• Recommendations may not be sufficient to
  encourage the necessary development of the
  industry.

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PISG Directions PaperProposals for Further
Consideration

• A significant fund to encourage substantial
  strategic pharmaceuticals industry investment.
• Improving the regulatory framework for clinical
  trials including streamlining approval processes
  and accelerating use of e-health to improve the
  efficiency of clinical trials in Australia.
• Making the skills education system more
  responsive to industry.

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PISG Directions PaperThe Process Ahead

• Strategy Group has consulted with others in
  industry
• Now refining proposals
• Final meeting 5 December
• Provide Final Report to Minister Carr by end of
  2008
• Government will consider the Group's findings

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• Department of Innovation, Industry,
• Science and Research
• Industry House
• 10 Binara Street
• Canberra City, ACT 2601, Australia
• Telephone [phone]