In a media release last month, Medicines Australia announced the resignation of its Board Chair, Mark Masterson. When we consider the recent turnover of MA board members does this turnover at the top reflect what is going on in the industry more broadly?
There is no doubt that the Australian medicines industry is experiencing a period of unprecedented contraction. The combination of PBS listing deferrals, patent expiries, and the ongoing effects of price disclosure is affecting company profitability. The commercial reality of the situation can be difficult to explain to global head offices, so locally, tough financial decisions have had to be made.
Over the last year, we have seen an almost complete renewal of the MA board and a Chair whose tenure was just short of 12 months. We have to assume this turnover is due, in part, to the local situation. The most visible impact of these financial decisions however was evident last year as nearly 400 people from the industry were made redundant. In 2013, Commercial Eyes is observing local operations change towards a greater focus on core business, incorporating outsourcing in their work plans and budgets as they attempt to be more efficient, rebuild revenues and maximise return on investment.
What is needed?
In the face of this contracting local market, it is important not to lose sight of the bigger picture. In the context of Australia’s growing and ageing population, the productivity benefits of medicine spending are real and Australia remains a critical launching pad to the burgeoning Asia Pacific market place.
Locally, the reality is that the MOU between Medicines Australia and the government will come to an end and irrespective of the outcome on September 14, the government will seek to get the best value for money from PBS expenditure. Therefore we must expect that government will explore all options put before it for delivering PBS savings.
Therefore, the whole industry will continue to face challenges and deal with uncertainty. To stabilise the Australian medicines industry and prevent the loss of more jobs, we need an industry that has clever policy ideas that ensure market access whilst delivering savings for government and dividends for shareholders. Focus should be on ensuring a sustainable PBS and a sustainable industry.