The GP co-payment has gone. Its planned introduction was linked to a stunning $20 billion Australian commitment to a Medical Research Future Fund. The world noticed.
The issues are now ostensibly again separate. But when will the $20 billion be achieved? Any delay would prejudice Australians’ access to modern treatments. And risk its global research reputation.
The federal government still has not properly explained this most visionary policy of the budget. Put simply, unless we expeditiously invest in medical research Australia will have fewer resources than other developed countries to treat serious illness.
The good news is that an avalanche of “new biological” drugs to treat a wide range of serious illnesses is likely coming. The bad news is that they will be horrendously expensive. That reflects the huge costs of discovery and development. Most of the discoveries come from overseas countries, who will NOT give Australia a free piggyback on their expensive research.
The pharmaceutical patenting implications of the coming Trans-Pacific Partnership Agreement will hurt countries with innovation deficits.
Senator Nick Xenophon, who helped block the Medicare co-payment, must see this. He instigated the welcome new Senate inquiry about why drugs for cancer cost so much in Australia.
Medicines Australia (which represents the pharmaceutical industry) cites a recent British study which put Australia persistently near the bottom of listed wealthy countries in providing new anti-cancer drugs. It’s a cost issue. And not just drugs for cancer. By contrast, Australia nearly tops the list for drug provision to preserve sight in a form of macular degeneration, based significantly on prior Australian research.
Development costs reflect research, risk, and royalties. The intellectual property and development data behind the drugs is mostly overseas – especially in the United States and Europe. America lives off its innovation and intellectual capital, and we must live off ours when the iron stops selling.
It is remarkable how small niduses of excellence can mushroom into creative powerhouses when generously funded, and staff have freedoms and incentives to become intellectual entrepreneurs.
I was once a junior post-doc at the Laboratory of Molecular Biology in Cambridge. This initially tiny post-war institution has already produced 14 Nobel laureates. The list doesn’t yet include another LMB scientist, Sir Gregory Winter, who discovered and commercialised “humanised monoclonal antibodies” to target unwanted molecules and cells. Hence, Herceptin for breast cancer, Humira for rheumatoid arthritis and Tysabri for multiple sclerosis, to name but three of thousands of therapeutic monoclonals. Royalties from Winter’s work alone have brought in hundreds of millions of pounds, mainly ploughed back into British medical research via companies he founded. He is the exemplar of the sort of entrepreneurial scientist which our science policies must facilitate.
Many new biologicals cost $100,000 or more per course.
Many other promising drugs fall by the wayside during development, or prove toxic. Pharmaceutical companies must recoup their investment, create a profit, and reinvest. But to ration life-saving drugs such as monoclonals by cost, when the supplier’s cost is in development rather than production of the drug, is a “lose-lose” situation.
Such drug prices could be negotiated downwards by increasing sale volumes.
Drug development requires capital and risk management. If we are to afford to buy these drugs Australia must develop its own stockpile of royalty-producing intellectual pharmaceutical property. To do that we must invest heavily in medical research, particularly in the enabling medical sciences such as molecular biology, chemistry, and immunology which translate into drug discovery. And we must then “translate”, trial and develop Australian discoveries so they remain at least in part home-owned .
Other countries such as the US with larger supplies of development capital have too easily siphoned off our most promising discoveries, so that Australians lose the financial benefit of their research investment. Take for example a drug called Neulasta, which maintains the body’s white-cell count and prevents catastrophic infections during chemotherapy. It was the late Professor Don Metcalf, at The Walter and Eliza Hall Institute in Melbourne, who discovered “colony stimulating factor”, on which this drug is based. But Amgen in the States developed it, and now Australia has to import its “own” drug at great cost, and ration its use for Australians.
That is how four years ago I cost the Australian taxpayer $60,000 for a single drug (Herceptin) and about another $12,500 for five Neulasta injections (which allowed me to work throughout chemotherapy). Happily I lived to pay it back in taxes. Had my cancer presented a few years earlier or the drop in my white-cell count been a little less dramatic I would have had to pay for the drugs myself. Thankfully then health minister Tony Abbott had put Herceptin on the PBS. I didn’t have to make a choice.
Australia could require pharmaceutical companies trading here to support more medical research in Australian universities. It could negotiate with our friend, the United States, to spread the costs, risks and rewards of drug development and ensure that Australia retains equity in joint ventures which develop Australian discoveries.
If the coming TPP agreement extends drug patentability and clinical data protection in line with US advocacy, drug costs will place an even greater premium on Australian research investment.
Maybe the existing Future Fund also has a role. Risk management might involve public-private partnerships in technology development. The brain drain must stop. Clever Australian scientists should have the same incentives and scope for entrepreneurship as clever Australian lawyers.
The government must progress the $20 billion commitment with all deliberate speed.
Robin Fitzsimons is a freelance writer and an adjunct professor at Sydney University Medical School.