The Federal Government’s decision to cut its investment in the PBS will undermine commercial certainty for Australia’s pharmaceutical industry Medicines Australia chief executive Ian Chalmers warned tonight.

The announcement of further savings measures in the Federal Budget will cost the industry $175 million over five years.

“Australia’s pharmaceuticals industry is already confronting a very challenging operating environment. Now the Government is extracting savings from Australian healthcare companies at the very time when it should be investing in this industry.

“Implementation of this proposed measure will likely result in declining revenues and job losses.

“Medicines Australia had already agreed to the Government’s 2007 PBS reforms, which were designed to deliver pricing certainty and stability in exchange for massive price reductions already being implemented. This measure undermines that certainty.”

While Mr Chalmers acknowledged the constraining fiscal circumstances in which the Budget was delivered, he said: “These cuts will place an additional financial impost on the industry at a time of considerable uncertainty for Australian pharmaceutical companies. The measure is regrettable.

“Notwithstanding our disappointment at these cuts to the PBS, I do recognise the extraordinary economic context in which this Budget has been framed. I also accept that the Government was faced with some extremely tough choices in having to offset an unprecedented shortfall in public revenues.

“It is important that Medicines Australia is able to engage in constructive dialogue with the Government as early as possible. It is critical to ensure the implementation of these cuts occurs in a way that Australian pharmaceutical companies can manage, and that patient access to essential medicines is not impaired.

“We will work closely with Government to investigate ways in which the impact of these measures on the industry can be ameliorated and to ensure there are no unintended consequences for patients.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

The Federal Government’s decision to replace the R&D tax concession with a new R&D tax credit will provide an important boost to investment in Australian clinical research, Medicines Australia chief executive Ian Chalmers said tonight.

However, Mr Chalmers said he was extremely disappointed that, for the first time since 1988, there will be no Government support program for Australia’s pharmaceutical industry.

“I do welcome the measure to replace the R&D tax concession with a new R&D tax credit, and the Super Science support for biotechnology,” Mr Chalmers said.

For most Medicines Australia member companies, the tax credit will be equivalent to a 133 per cent concession and, significantly, will be open to foreign-owned companies with a turnover of more than $20 million per annum.

The tax credit is decoupled from the corporate tax rate and therefore creates certainty in the level of assistance.

Meanwhile, Mr Chalmers said Medicines Australia would seek dialogue with the Government to explore opportunities to enhance Australia’s competitiveness as a destination for R&D investment.

“The absence of budgetary support for the Pharmaceutical Industry Strategy Group’s recommendations is extremely disappointing,” Mr Chalmers said.

“This will be the first time for 21 years that there will be no dedicated industry support program to promote investment in this valuable knowledge-based industry. The PISG proposals were part of the solution to the current economic crisis.

“We need to find other means to demonstrate the Government’s commitment and priority for the innovative pharmaceutical industry.

“The PISG’s clinical trials recommendations are a clear example of an initiative that would benefit the healthcare sector. This measure would cost the Government very little.

“Medicines Australia is very keen to work with the Government to secure Australia’s position in the global innovative pharmaceutical industry.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

Medicines Australia chief executive Ian Chalmers today proposed a four-step checklist for the Government to use for any future policy decisions for the Pharmaceutical Benefits Scheme.

Speaking at the Future of the PBS conference in Sydney today, Mr Chalmers told health industry experts that the Government should ask itself four key questions in framing future policy decisions for the PBS.

“Whenever the Government is examining growth in public spending on the PBS, it should consider four key questions which help to put any such growth in context,” Mr Chalmers said.

The key questions are:

• Is PBS growth over the last three years greater than growth over the last 50 years?
• Is Australia’s growth rate in public spending on pharmaceuticals greater than the OECD average?
• Is public expenditure on pharmaceuticals in Australia relative to GDP greater than the OECD average?
• Is expenditure on the PBS replacing or reducing expenditure in other areas of health budget?

Mr Chalmers said the answers to those questions indicate that PBS growth is being contained.

“PBS growth of 1.8 per cent in real terms over the past three years compares very favourably with the 6.5 per cent growth over the last 50 years,” Mr Chalmers said.

“Between 1995 and 2005 growth in public spending on pharmaceuticals in Australia was higher at 10 per cent than the OECD average of 8 per cent. However, these figures do not include the low PBS growth rates of the last few years.

“Australia’s public expenditure on pharmaceuticals as a proportion of GDP in 2007 was 0.7 per cent compared with the OECD average of 0.9 per cent.

“There is increasing evidence, as the Productivity Commission has acknowledged, that spending on medicines offsets expenditure elsewhere in the health sector.

“These questions are as pertinent to Government today as they will be to future consideration of PBS growth. The answers support the findings of an independent study commissioned by the Pharmacy Guild which demonstrates that growth is being contained and we have a sustainable PBS.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

An independent report released by the Pharmacy Guild reveals the savings to Government from the 2007 Pharmaceutical Benefits Scheme reforms will be substantially greater than previous estimates.

The report by Illuminating Health Consulting and commissioned by the Pharmacy Guild concludes that the reforms will deliver a massive $7.4 billion in savings to Government over 10 years.

That is more than double the previous Government’s own estimate of $3 billion.

Medicines Australia chief executive Ian Chalmers said the new report should further convince the Rudd Government of the wisdom of quarantining the PBS from spending cuts in the Federal Budget.

“This report confirms the true extent of the savings which PBS reform will deliver to the Government.

“The Report highlights an extra $4.4 billion in savings, over and above Government projections. This also significantly exceeds earlier industry projections.

“Whichever way you dice it, it’s now clear that the Government will save at least $7 billion as a result of these reforms.

“The discovery-driven pharmaceuticals industry signed up to these reforms in good faith, in the interests of ensuring a sustainable PBS for future generations.

“This Report confirms that the pharmaceutical industry has done – and will continue to do – its share of the heavy lifting ahead of this Budget and beyond.

“In the last year PBS reforms have resulted in a loss of 5% of the workforce of Medicine Australia member companies. Any further unexpected cuts to the PBS would be damaging to the local industry and put more Australian jobs at risk.

“What the industry needs now is commercial certainty and stability.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

A new report by Access Economics confirms spending on the Pharmaceutical Benefits Scheme will not spiral out of control, as the Howard Government’s two Intergenerational Reports predicted.

Medicines Australia chief executive Ian Chalmers said the report demonstrates very clearly that the PBS will be sustainable into the future and will not blow out Government healthcare budgets.

“This important study presents a powerful argument to the Rudd Government as to why the PBS should be quarantined from Budget cuts,” Mr Chalmers said.

“We now have compelling independent evidence that growth is being contained and we have a sustainable PBS.

“Access Economics projections are that PBS spending in 2042 will account for just 1.6 per cent of GDP. That is half the amount predicted by the first Intergenerational Report in 2002.

“Access Economics has shown that the PBS will be financially sustainable for at least the next 40 years.

“Reforms introduced to the PBS in 2007 are designed to ensure the scheme remains sustainable over the long term. The Access Economics report clearly shows those reforms are doing their job.

“Price cuts to PBS medicines are expected to deliver savings to Government of more than $650 million over the next three years, and $6 billion over 10 years.

“The heavy lifting by industry has well and truly begun. Government will bank those savings as long as there is a viable pharmaceutical industry in Australia.

“However, that viability would be undermined by any unexpected changes to what was a carefully planned and agreed reform program.

“The fact is, Australia’s prescription pharmaceuticals industry is already well ahead of the savings curve.”

The report was launched last night by Access Economics Director Chris Richardson.

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

Medicines Australia member companies continued to ensure healthcare professionals were kept up to date with the latest information about prescription medicines in the second half of 2008.

Member companies provided or sponsored 18,060 seminars, conferences, symposia or other educational events for healthcare professionals during the six-month period.

Details of those events were published today on the Medicines Australia website.

Medicines Australia chief executive Ian Chalmers said member companies remained committed to providing healthcare professionals with balanced and accurate information about medicines.

“Pharmaceutical companies have an obligation to patients to ensure doctors have the latest information about prescription medicines,” Mr Chalmers said.

“Healthcare decisions affecting patients must be informed by dialogue between those who make medicines and those who prescribe them. That’s vital for Australian patients.

“Patients in Australia rightly expect to be treated by doctors who have access to the latest information about prescription medicines.

“These events ensure healthcare professionals know about new medicines and how they should be used. The information which companies provide has to be accurate and balanced, and has to be entirely consistent with product information approved by the TGA.

“Any educational event provided or sponsored by Medicines Australia member companies is subject to a strict Code of Conduct, which is very clear. Gifts to doctors are banned; entertainment is banned; lavish hospitality is banned.”

More than 99.9 per cent of educational events provided or sponsored by member companies in 2007-08 were compliant with the Medicines Australia Code of Conduct.

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

EMBARGOED: 12.30pm Wednesday 25 March 2009

Medicines Australia chairman Will Delaat today outlined a three-point plan to attract substantial international investment in clinical research for Australia.

Speaking at the fourth annual R&D Taskforce Forum in Sydney, Mr Delaat said Australia was well placed to win clinical research investment from regional competitors such as India and China.

Global pharmaceutical companies already invest $1 billion a year in R&D in Australia.

However, Mr Delaat said Australia urgently needs to reform the regulatory framework for clinical trials to protect and build on that investment.

Mr Delaat urged State and Federal governments to:

• Expedite the establishment of a national streamlined system of ethics approval for multi-centre clinical trials
• Establish coordinated national patient referral networks to facilitate recruitment of patients into clinical trials
• Ensure that systems of electronic medical records in public hospitals are compatible with industry requirements.

“The global economic crisis presents Australia with a precious window of opportunity to attract substantial global investment in clinical research,” Mr Delaat said.

“Growth in countries such as India and China has slowed considerably, and those economies will be focussed on consolidating their gains and limiting their losses. In the meantime, Australia has an opportunity to recapture some of the advantage it has lost to those countries during the economic boom.

“If Australia is to be globally competitive as an R&D destination, we must harmonise the complex and cumbersome ethical review processes for multi-centre clinical trials.

“There are more than 250 different ethical review committees for clinical research in Australia. We need a nationally streamlined system for single ethics review for multicentre clinical trials so that companies considering R&D investment aren’t discouraged by the absurd amount of red tape.”

The two-day Pharmaceuticals Industry Council R&D Taskforce Forum, supported by the Department of Innovation, Industry, Science and Research, concludes tomorrow (Thursday).

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

Hundreds of high-wage, high-skill jobs in Australia’s $18bn pharmaceutical industry are under threat from the global economic crisis, Medicines Australia chief executive Ian Chalmers warned today.

Mr Chalmers said the Government could protect jobs and encourage foreign investment in Australia’s pharmaceutical industry by ensuring there were no further cuts to the Pharmaceutical Benefits Scheme, and by implementing key industry support measures.

“The pharmaceuticals sector is Australia’s second most valuable export industry, after the automotive industry,” Mr Chalmers said.

“We employ over 40,000 Australians in high-value jobs. Local pharmaceutical companies attract upwards of $1 billion a year in R&D investment, and export Australian produced medicines worth $4 billion annually. Those exports offset pharmaceutical imports by more than 50 per cent.

“We can continue to deliver a tangible benefit to Australia’s ailing economy, but we need the Government to provide commercial certainty and stability. They can do that by ensuring the Pharmaceutical Benefits Scheme continues to be fully funded.

“The economic reality is that the PBS is not a cost to Government. It’s an investment which delivers substantial savings in other areas of the healthcare system.

“It would be a false economy to gouge Budget savings from a Federal health program that delivers a net saving to the state health system. The PBS effectively keeps patients out of hospitals, shortens hospital stays when they are needed, and reduces the burden of illness for virtually every Australian family.

“Any cut to the PBS would be bad news for patients, and ultimately bad news for the economy.

“The major reform of the PBS, which began in August 2008, will save the Government more than $650 million over the next four years and upwards of $6 billion over 10 years. Pharmaceutical companies have already delivered massive savings to Government.

“The industry now needs commercial certainty. Any further unexpected cuts to the PBS, especially at this time of economic stress, could have serious consequences for the pharmaceutical industry and high-wage Australian jobs.”

Mr Chalmers further encouraged Government to implement the recommendations of the Pharmaceuticals Industry Strategy Group, which reported to Innovation Minister Kim Carr in January.

The PISG set out a cost-effective strategic plan to boost global investment in Australia’s pharmaceuticals industry.

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

Medicines Australia today made a cash contribution of $100,000 to the 2009 Victorian Bushfire Appeal Fund to support those affected by the weekend’s bushfires.

Chief Executive Ian Chalmers extended his deepest sympathy, on behalf of the innovative pharmaceuticals industry, to those who had lost loved ones in the bushfires.

“Like all Australians, leaders of our industry were deeply distressed as this terrible disaster unfolded over the weekend,” Mr Chalmers said.

“This is an awful experience for everyone who has been affected personally by the bushfires.

“Our thoughts and sympathy go out to all who are suffering in the wake of this devastating national tragedy, particularly those who have lost friends or family members.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au

Medicines Australia Chief Executive Ian Chalmers today welcomed the Government’s establishment of a new advisory structure to support Australia’s National Medicines Policy.

Arrangements for the new structure were announced on Friday by the Minister for Health and Ageing, Nicola Roxon MP.

“I congratulate the Government on finalising the new advisory structure for the National Medicines Policy,” Mr Chalmers said.

“This initiative fills a vacuum which has existed since the Australian Pharmaceutical Advisory Council and the Pharmaceutical Health and Rational Use of Medicines expert advisory committee were disbanded two years ago.

“The establishment of the new advisory structure will provide an important framework for taking medicines policy forward. It is a positive initiative by the Government and Medicines Australia looks forward to contributing to it.

“I particularly welcome the establishment of a Partnerships Forum. This will provide a valuable opportunity for stakeholder input to the development of medicines policy in Australia.

“I encourage the National Medicines Policy Committee to convene its first Partnerships Forum as early as possible.”

–ENDS–

Contact Person:

Jamie Nicholson
Media Communications Manager
Phone: 0419 220 293
Email: Jamie.Nicholson@medicinesaustralia.com.au