Celgene is celebrating the tenth anniversary of its establishment in Australia this week. Pharma in Focus spoke to George Varkanis (Vice President and Managing Director ANZ) and global CEO Mark Alles about how the company sees Australia ten years on and its plans for the future.
“It’s been a fantastic journey,” says Varkanis. “We often talk about having the opportunity to start something from scratch. Essentially, this has been the story of Celgene around the globe in all of our affiliates [from] when the company decided ten or so years ago to go global, and it’s just a great opportunity to build an affiliate, to build an organisation globally but to build an affiliate and to go through those early days.”
At the time, Revlimid® (lenalidomide) was the company’s sole product in Australia and even it had yet to travel all the way to market.
“We’ve built from there,” Varkanis says.
“In Australia, several years in, Revlimid was reimbursed. Soon thereafter, Vidaza® (azacitidine) was also reimbursed. We had Pomalyst® (pomalidomide) reimbursed late last year, so they’re our three key brands.
“Obviously thalidomide is still a product that we have on the market here. There’s a couple of other products that are registered but not yet reimbursed and we’re working through that.”
Celgene’s recent struggles with the PBAC – it had three major submissions rejected last year – naturally raises the question of whether Australia is a particularly tough environment for companies seeking to have drugs reimbursed.
Says Mark Alles “We’ve become very, very expert at working with market-based healthcare systems all round the world. I don’t think that I would put Australia into an especially difficult category.
“What I would say is that, like a lot of markets around the world, the system is fairly unique but we respect the system, we work through it, we partner, we negotiate, and we understand fully the responsibility that we have to bring innovative, life saving, life extending, life improving new therapies to market and to work with the respective governments, including the Australian government through its systems, on how to create the right balance between innovation and the recognition that innovation comes at a cost and that innovation needs to be negotiated based on local market considerations.”
Alles says he would rank Australia “in the developed markets of the world with a very rigorous system, one that is fairly predictable, one where we understand the rules of the road”. But he has a message none-the-less: “The Australian market or other single-payer systems like Australia around the world, could create more certainty and predictability in terms of how the system will work year in and year out and from budget cycle to budget cycle. That creates a sustainable partnership between industries like the pharmaceutical industry and Celgene and how it sees itself for the long term in a country like Australia.”
Varkanis adds that, based on local experience, “the process largely works.”
“In our experience, generally it’s been a good experience. Do we have prices at perhaps at the lower end of global price bands? Yes, but that, as Mark said, that is about understanding the markets that you work in. As long as there’s that consistency, that transparency and you know what you’re working with, it’s OK.
“Are there things that we could tweak in the process? Sure, but I think it comes down to believing in your product, believing in the data and then you work through the processes that you have in front of you.
“We have, as I said, a couple of products that are registered. They’re not reimbursed. They may never get reimbursed because we can’t agree on the data or the assumptions or whatever it may be.
I think industry and government perhaps could work more to find a middle ground because it’s never going to be black or white and I think that’s an area where, particularly for some of the rarer diseases, it shouldn’t be so clear cut and I think there’s room for dialogue to benefit patients.
Although not willing to name particular products, Varkanis says: “We’ve got one product that we haven’t even submitted and we probably won’t submit because the comparator is a low cost generic and you cannot sell this product at generic prices. It’s a rarer disease. It’s on phase II data. It’s got a lot of complexities to the package so I think in those instances a dialogue needs to happen and I think the rule book maybe kind of needs to be a bit more flexible.
“Around the world where there are these more difficult negotiations around rare disease categories or where the system is structured for the mass markets, the bigger markets, and the bigger cost items, it does create some complexity that causes the industry to make different choices,” says Alles.
“But again, I don’t know that that is only in Australia. It may be somewhat different in terms of the exact process but I think the rarer the disease, the more complex the disease, sometimes the more challenging the environment but as George points out, we’ve had a great ten-year run here. We are very excited about the future of Celgene in Australia and we’ve learned to work with the system, I think, quite well.”
“Whether it’s Australia or single-payer countries with government-backed reimbursement around the world, the rare disease category is a common issue because these are people with high mortality and morbidity burden and so there’s a disproportionate impact on the healthcare system albeit these are very few patients to have to deal with,” the Celgene CEO adds. “I think that’s where the dialogue has to come in.”
He says there may be a need for a different funding mechanism where rare diseases are concerned and that using the same set of rules as applied to drugs for more common illnesses is insufficient.
“We’re very open to a lot of novel structures on the basis of new innovation that sets a new standard in outcomes and benefits, where then the question is, what is the budget impact? We’re very open to that, country by country including in Australia. We’re happy to create that dialogue about a forward-looking approach to reimbursement.
The future in Australia and Australia’s role
Celgene is a company recognised around the world as a leader in blood cancers and has more in that pipeline but is branching out into other therapeutic areas as well.
Further, Alles places particular emphasis on the special relationship that he says Celgene enjoys with Australian researchers and research institutes.
“Some of the most important academic relationships that we have in the world are between Celgene and key investigators and research centres including the Peter Mac here in Melbourne so when we think about cancer research there’s a long history of collaboration between Celgene and some of the most important haematologists in the world right here in town,” he says.
“We recognise that over time there is going to be the up and down of the local relationship with respect to how the system is working and how the budgets allow for additional research to happen but we have a long term view that Celgene’s success in the world will depend on a very intimate relationship with Australia’s market so we look to build on our last ten years with a least another 12 to 25 years of success in Australia.
“As far into the future as I can see, we’re going to have a meaningful footprint in this market from a research and commercial point of view.”
The above story was adapted, with permission, from a Pharma in Focus article posted 7th April 2016.