'Brilliant' innovation policy but mixed messages a risk

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Australia needs to avoid sending industry mixed messages if it is to complete a successful transition to an innovation-based economy, according to Jan Van Acker, Asia-Pacific president of MSD.

In recorded interview with BiotechDispatch, Mr Van Acker praised government's "brilliant" policy shift to innovation but urges it to connect the dots on industry, arguing its attempt to encourage investment could be undermined by its pharmaceutical pricing policies.

Singapore-based Mr Van Acker's region includes around two billion people. He previously served the company as managing director of MSD Belgium and in a variety of senior global and regional roles.

Mr Van Acker says based on his experience governments across markets and regions are facing similar challenges, with rising costs associated with funding new technologies for ageing populations.

"The most critical thing I've seen for industry, and I've applied it in Europe and in Asia, is to really work long term with government," he told BiotechDispatch.

"Government tends to see the industry in two ways. On the one hand we're basically a provider, a manufacturer of pharmaceuticals and vaccines, which they kind of see as a cost. On the other hand we're a provider of jobs, of investment and collaboration with the scientific community or with biotech companies, and there they look at us from an industrial policy.

"The problem we face is that there are two different departments in the government and typically they don't talk to one another. They would like to have our investments but at the same time when they have budgetary pressures for the next year they will cut our prices.

"What we need to do, and I've seen us do it quite successfully in countries globally, is we need to make that link. We need to make that link, first of all internally so when you work as an industry the industry association needs to develop a long-term strategic approach, which marries these two very closely together.

"In Australia, the government has this brilliant new approach of trying to shift from a mining based economy to a science based economy. We need to tell the government, if you do that and you're trying to get investment from large pharmaceutical companies, don't cut our prices on patented medicines like happened last year because you’re sending contradictory messages."

Mr Van Acker uses his own recent experience leading MSD's Asia Pacific region to illustrate the point.

"When I started in my job one of the first things I did was go on a road show to headquarters to sell Asia Pacific. I listed all of my countries, mapping them and putting a green, yellow or red dot against them.

"I had put a green dot against Australia long term because it's clear it’s important and there's potential. I was challenged by some of the most senior people in the company. They were asking me how can you put a green dot when you know prices are not ok in Australia."

He met with government officials during his trip to Australia, congratulating them on the new policy focus on innovation but cautioning against other measures that undermine the country's ability to secure investment from companies like MSD.

"The people sitting in meetings about pricing are the same people that sit in the meetings making the decisions on investments both in clinical studies and in biotech."