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Milton Catelin leading what is now a very different organisation

Monday, 20 February 2017

Industry News

PharmaDispatch sat down with Medicines Australia chief executive Milton Catelin for his first in-depth interview since joining the association in October last year.

In a wide-ranging discussion, Mr Catelin talked about the expectations of member companies, rebuilding the organisation and its reputation after the travails of 2015, the importance of maintaining a positive working relationship with government, the need for policy ‘certainty’ and unity across the sector.

Member expectations

He recognises the enduring challenge for Medicines Australia in managing the interests of its diverse membership with the association’s mandate to shape the policy environment over the long term.

“It creates challenges,” he says, describing it as “just a reality.”

“We do need to remind our membership the objectives of an industry association are somewhat different to the objectives of individual members.

“We have to explain to our members we’re here to improve the operating environment for all of them.

“Individual members rightly argue for access for particular drugs to the market, and they should actively pursue that as the pointy end of their agenda, but the industry association needs to keep its eye on what’s happening five years down the track – ten years down the track – and needs to really focus on what is the best political operating environment to allow our membership to grow.”

He continues, “We need to understand they’re individual companies pursuing individual interests, but they need to be reminded when those interests are counterproductive to the industry or the company in the long run.

“We do this by building credibility with our own members. Part of that is being a more efficient and politically savvy secretariat than perhaps we might have been in the past. The secretariat has to be more professional and more politically astute than it has been in the past.”

Rebuilding the organisation

Mr Catelin was appointed to lead Medicines Australia in the aftermath of its failure to secure a strategic agreement with government following negotiation of the 2015 PBS Access and Sustainability Package.’

He acknowledges biosimilars policy as one reason for the association’s decision not to sign the agreement but says there were a “litany” of others.

“It was possibly the straw the broke the camel’s back,” he says.

“I think you could talk to six individuals and you get six different reasons for what happened. You try and talk to as many people as possible, listen to what they’re saying. The fact I’ve heard so many different stories about things we’ve done wrong in the past and how the negotiations were upset in the past, it leads me to believe it’s a more complex story than any individual understands.

“So, I think it’s difficult getting a group understanding of what the past was about, but it’s far more important to get a group understanding of the what the future is about. And the future is about reminding people that this industry is inherently important to the health and wealth of Australians.”

He says the association is in a “much better position now”. While not elaborating, Mr Catelin says, “I think some of the problems that beset the negotiations then are not present now.”

In response to the question, would the association react differently if presented with similar circumstances to 2015, he simply says, “Yeah, it would be.”

“We’ve had an injection of new blood, we have people who are not new blood but have learnt lessons from history. I think the Board is much better placed and much more understanding of the environment it faces,” he says.

“I think we’ve done a whole bunch of internal navel-gazing activity, which has been important. We’ve done governance reforms, we’re still implementing those reforms. We’ve set up an independent director on our board. We’re setting up an advisory council to ensure we keep our eyes on the horizon, which is made up of industry people, but also a large number of people from outside the industry.

“The next stage for Medicines Australia has to be, while we maintain the focus on internal improvement, to turn our focus towards external presentation. To improve the reputation of the association, to improve its standing with other people in the medical health system, the ecosystem, and to improve its standing with government.

“I mean, whether or not we have a five-year agreement with government, for example, there’s a whole hard slog that has to be done just in maintaining relationships and goodwill with bureaucrats and with politicians. That should be occurring all the time and certainly occurring between those five-year agreements. So, it’s really about improving the goodwill that people are prepared to direct towards this industry. And that doesn’t come from focusing on the mistakes we’ve made in the past, but it does come from accepting we’ve made mistakes in the past and accepting we need to lift our game if we want a better acceptance in the ecosystem.”

The need for certainty

He is reluctant to answer the question whether Medicines Australia would still like an agreement, focussing instead on the sector’s “urgent” need for policy certainty, while acknowledging it will come at a cost.

“I think we need to remind government how much this industry has provided to them. I don’t think that’s the same as complaining about having given enough. The government has a huge problem to address, a huge black hole to address, and we’re not the only industry that might have to give more.

“Importantly, the quicker we can provide our members with confidence through certainty, the quicker we can get onto the long-term debates we have to have, that’s to benefit not us, but us and government. That’s what’s critical.”

Mr Catelin says, even if Medicines Australia did secure an agreement, it is only a signal of the need for significant work ahead. “Our job is really to focus on working to deliver between agreements.”

The policy focus

He says the association’s policy focus will remain on the reimbursement of new medicines and vaccines, while maintaining a “cohesive” relationship with government and the entire pharmaceutical sector.

“What was an innovative drug today will be a generic tomorrow. The chain doesn’t work unless you’re introducing new products, so we also need to focus on the R&D effort, on the government’s innovation agenda.

“We need to remind government that, at this point in time, our products are the largest or second largest manufactured export from Australia. Yet we have a declining manufacturing base, so what we want the government to do is focus on how to reverse the decline in manufacturing in this country. That will entice more companies to work here and more investment from our member companies. You also need to focus on clinical trials. That’s clearly integral to the government’s innovation agenda and it’s something Greg Hunt is personally interested in.”

He refers to last year’s industry forum hosted at Pfizer by former health minister Sussan Ley.

“She spoke to people from various companies who were not managing directors. What she heard was Australian voices all talking about how they compete with their sister companies in other countries. You cannot view our members as only being multinationals. These are proud Australians who want to get clinical trials in this country, want to have manufacturing in this country, want to employ Australians, want to spend money here, want to grow here. And they’re in competition with their own company in another country.”

Conflict with government is not an option

As for the relationship with government, he says the association and its member companies have only one option, which is to maintain a positive and constructive working relationship.

“We are eager to be seen as trusted partners with government but we will not resile from representing the best interests of our members.

“It is wrong to threaten governments,” he says, arguing the sector and government should focus on “how do we build on what we have” for Australia, rather than treating the relationship simply in transactional terms.

He also believes his sector must “close the gap” between what it sometimes says and does.

“For our own credibility, for our standing with government, with people we might be negotiating with, it needs to close. But I don’t think we’re the only people who have those kind of gaps.

“It’s in our hands to ruin our relationship with government and therefore it’s in our hands to have a productive relationship with them.”

A united pharmaceutical sector

Mr Catelin says has been struck by the lack of unity across the pharmaceutical eco-system and the absence of a single voice on policy.

“…it has communitive interest, but doesn’t seem to recognise the interest amongst its own players.”

He believes the pharmaceutical sector needs to avoid divisions of the past by finding “commonality”, take a unified policy approach to government, and be recognised as a “source of solutions”.

“Not just for the sake of Medicines Australia, but for the sake of the other industry associations. It’s a no-win game if we operate in our relations with the government to put down other people in our own sector. None of us, any of the other groups, none of us can win that sort of battle over time. They’ll just pick us off,” he says, adding it can be in government’s interest to have disunity across the sector.

“I mean none of the associations, and I include MA in this, is without blame in terms of doing the dirty on other associations. But I think you need to recognise that that sort of stuff is in the past and we need to make a clean break with the past.

“We need to find commonality. And that requires hard work, because a lot of the time there are issues that do divide us and I think those are the issues we need to leave up to individual associations to run. And we also need to actively seek out issues on which we can coalesce.”

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