Ken Frazier, President and CEO of US-based Merck (MSD), has told a Parliamentary Friends of Medicines event in Canberra that HPV vaccine GARDASIL may not have been commercialised globally if the rest of the world adopted Australian pricing policies.
In a wide-ranging address delivered earlier today, Mr Frazier praised Australia's record in health research and development, highlighting the role of Howard Florey in the discovery of penicillin.
He also highlighted Australia's global influence with its early adoption of health technology assessment for pharmaceuticals, and thanked the TGA and Department of Health for their collaboration in accelerating approvals for melanoma therapy, KEYTRUDA.
"The result of our shared alignment and commitment to meeting this critical unmet medical need in Australia also led to this country becoming the first in the world to register KEYTRUDA as a first-line therapy for melanoma - an accomplishment both welcome and unprecedented," said Mr Frazier.
However, he expressed significant concern over the "the PBAC's shift in focus from the holistic value of innovative medicines to the impact of costs on the Budget."
"...Australian patients have had to wait much longer than patients in other countries to get access to new medicines," he said.
"The long-term impact is more troubling. Australia often pays substantially less than other developed countries for new medicines. This has serious consequences on companies' incentive to innovate. Payers in the United States, Japan and other developed markets shoulder a disproportionate share of the cost of these important therapies. If all markets followed Australia's example, it is quite possible that many new medicines simply would not be developed."
Mr Frazier pointed to GARDASIL as an example.
"Australia has achieved one of the highest coverage rates in the world with GARDASIL, which has already brought tremendous benefits." However, he said, "If GARDASIL had to be commercialised globally on the basis of what the Government pays in Australia, it may not have been developed at all."
While acknowledging that budgetary concerns are "very real", as well as industry's obligation to work with Government to address them, Mr Frazier described the recently announced $6.6 billion PBS savings package as "concerning".
He questioned the new statutory price cut to medicines listed in the F1 formulary, asking how it could be justified given medicines are found to be cost-effective before they are listed on the PBS, and urged the Government to ensure the TGA retains its role as the body best-placed to determine the substitutability of biologics.
On ongoing discussions between the Government and Medicines Australia over a strategic agreement, Mr Frazier said he hoped the discussion would lead to "some stability and balance after what has been a very difficult few months for the industry."
"I urge everyone involved in policy discussions around medicines to think carefully about the importance of collaboration and the many examples of where partnerships between industry and Government have helped Australia realise strong advances in health care.
"Policies that are forced through without consultation can have negative unintended consequences, not only through short-term disruptions but also undermining the trust and collaboration essential to tackling health challenges, both now and in the future," said Mr Frazier.
He concluded by expressing confidence that industry and the Government could create and maintain the right conditions to ensure the timely availability of the "newest and most innovative medicines".
