COVID-19 has exposed a sovereign vulnerability that Australia must urgently fix. We don’t have the manufacturing capability to make lifesaving drugs relied upon by millions of Australians every day, including the mass production of vaccines.
The recent announcement of a partnership between Moderna and the Australian and Victorian governments, is an important step in ensuring sovereign capability in manufacturing a COVID-19 vaccine in Australia. It will also create mRNA vaccine facilities that can be applied to other health challenges. The total cost of the new facility is rumoured to be around $2 billion.
The manufacture of vaccines on Australian shores needs backing from all levels of government.
While there has been a growing consensus, and moves towards, boosting our national biotech manufacturing capability in recent years, movement to date has been slow. Building capability is not an immediate fix, but in a decade from now, with the right focus, it can be achieved.
It needs a co-ordinated approach, led by the federal government in close consultation and collaboration with pharmaceutical companies, research and clinical organisations, and the biotech industry overall.
It is also vital we employ a national, rather than a state-based strategy, for achieving this. Furthermore, we should use this experience as a blueprint for building Australia’s national biotech manufacturing capacity going forward.
Building biotech manufacturing infrastructure is expensive and will take millions of dollars of public money to invest. It is just not economic to have different states competing for small pools of funding – we should focus on building key national manufacturing centres.
Before the Australian government backed Victoria to partner with Moderna on the creation of a new facility, Australia had three state governments in a race against each other, all investing heavily in the development of their own mRNA facilities. The Victorian government committed $50 million, the New South Wales government $100 million, and the Queensland government $20 million, each to develop their own mRNA vaccine manufacturing capabilities.
There were moments during 2021 where Australia’s supply of some key medicines was challenged by other nations’ stockpiling.
I understand why various state governments are taking the lead and committing to fund these manufacturing facilities, as they see the medical need and long-term economic benefits in terms of jobs and income. While selecting states for different facilities will not be easy for the federal government, what it has done in selecting Victoria as the site for a national COVID-19 mRNA vaccine manufacturing facility, is the right approach. Having medical manufacturing capability is too important, and too expensive, to have duplication of identical facilities across multiple states.
There are however, many more lifesaving therapies that are used every day in Australian hospitals, which we no longer have the capabilities to manufacture. Every two years, the World Health Organisation provides an updated list of medicines that are the most effective and safe to meet the most important needs of functioning healthcare systems. Doesn’t it make sense for Australia to have the basic capability to manufacture the 10 or 20 most critical medicines?
In terms of pharmaceutical manufacturing, no size fits all, so there will be a need for facilities with vastly different infrastructure and capabilities. The infrastructure, equipment and skills required for a vaccine manufacturing facility, for example, are different to those required for a facility that manufactures drug therapies.
In the 2020 federal budget, the government committed $1.5 billion to build manufacturing capability across six key industries, including biotech. While this is a very positive signal from government, the strategy relies on having Australian biotech companies willing to remain in Australia long enough to manufacture drugs and therapies here. In short, this investment alone is not enough, we need to pull further policy levers, and we need them to be pulled in unison as part of a national strategy to keep our manufacturing assets in Australia.
As just one example of a positive policy lever, the US Food & Drug Administration (FDA) offers an accelerated regulatory approval path for drugs or therapies that look to address a large unmet medical need. This highly attractive mechanism attracts many promising Australian biotechs to the US and sees drug development times shortened. If the federal government were to bring in a similar mechanism, a fast-tracked route for Australian-developed therapies to receive approval via the Therapeutics Goods Administration (TGA), it would prove attractive and would see many more of our promising biotech companies remain in Australia and manufacture their drugs and therapies here.
The federal government could also put Medicare reimbursement initiatives in place, providing an incentive for biotech companies to make their therapies accessible to patients here first, rather than going to the US or European markets, as is the traditional route. There are examples both in the US and Europe, where new therapies can benefit from temporary reimbursement, while their adoption and overall benefit to the healthcare system is assessed by government.
There are many policy initiatives, that if co-ordinated in unison at a national level, have the potential to transform our biotech sector. We have already solved the much larger problem, which is having world class biotech research and innovations to commercialise in the first place, a capability Australia has been building on for more than 100 years. Australia ranks in the top handful of countries globally for biotech research innovation, a position of which we can be really proud as a nation.
COVID-19 exposed our need for drug manufacturing self-sufficiency. While it may never be spoken about publicly, there were moments during 2021 at the peak of the global COVID-19 crisis, where Australia’s supply of some key medicines was challenged due to stockpiling by other nations, particularly those medicines that were essential for treating patients hospitalised with COVID-19. We need to learn our lesson from this and act now for the future.
There are many other, equally valuable reasons to act now. Australia’s biotech ecosystem is a sustainable, sunrise industry, with the potential to be a significant driver of economic wealth in the future. Australian biotech company, CSL, is one of our largest and most valuable companies, employing thousands of people and manufacturing products and treatments that improve the health of Australians, and patients around the world.
With the right approach, I can see a world where our top 20 most valuable companies are dominated by biotech and life science firms. That would be good for Australians and good for the world.
Chris Nave is chief executive of the Medical Research Commercialisation Fund and co-founder of Brandon Capital.
Chris Nave
January 12, 2022
