Senior bureaucrat with limited pharma exposure to lead reform negotiations

The responsibility for negotiating the next Strategic Agreements with the medicines sector has been handed to a senior bureaucrat with minimal pharmaceutical sector exposure.

The Strategic Agreements between the government and Medicines Australia and the Generic and Biosimilar Medicines Association (GBMA), which collectively supply the entire medicines market in Australia, will now be led by Daniel McCabe, First Assistant Secretary of the Technology Assessment and Access Division at the Department of Health.

The leadership change follows the departure of Penny Shakespeare, former Deputy Secretary of the Health Resourcing Group, who played a central role in negotiating the previous two Strategic Agreements. Although the industry described tension in working with Shakespeare, she was instrumental in the last two Agreement negotiations and held much of the government’s corporate memory of the process. Shakespeare has recently taken on the role of Acting National Anti Corruption Deputy Commissioner. While the appointment is intended to last three months as recruitment proceeds, insiders told Health Industry Hub it is unlikely she will return to her previous position.

McCabe, former First Assistant Secretary, Medicare Benefits and Digital Health Division, now inherits one of the most politically and commercially sensitive negotiations in the healthcare sector despite bringing limited pharmaceutical policy experience and no track record in negotiating the Strategic Agreements.

His credentials lie elsewhere. McCabe oversaw the biggest changes to digital health transformation, including the establishment of the Sparked FHIR accelerator, crucial to interoperability, and the Sharing by Default legislation, which will give Australians increasing power over their own healthcare data.

His relocation in June 2026 was structured as a sideways swap with Duncan McIntyre, who previously led the Technology Assessment and Access Division through a critical period, notably serving on the Health Technology Assessment (HTA) Review Implementation Advisory Group (IAG).

McCabe’s immediate priority will be stewarding the critical HTA Review reforms, which form part of the Strategic Agreement negotiations that officially commenced on 1 July. However, as Health Industry Hub understands, neither government nor the medicines sector is ready. In reality, negotiations are expected to begin in around a month and are likely to take between six and eight months to complete.

The timing could hardly be more contentious.

Pressure is intensifying across the medicines sector as companies grapple with the ramifications of the US Administration’s Most Favoured Nation (MFN) pricing policy. The withdrawal of Pfizer’s Tukysa and Lilly’s Mounjaro from the PBS listing process highlights the mounting tension between pricing expectations set by global headquarters and the reform agenda being pursued by Federal Health Minister Mark Butler.

Other examples of reimbursed medicines being removed from the local market include AstraZeneca’s Zoladex and Indivior’s Sublocade, while Novartis and Roche deal with potential price reductions for their multiple sclerosis (MS) drugs.

Against this backdrop, international comparisons are becoming increasingly difficult to ignore.

The UK–US pharmaceuticals trade deal delivered what many consider a landmark outcome for the pharma sector. Under the agreement, the UK Government committed to increasing NHS spending on new medicines from 0.3% of GDP in 2026 to at least 0.6% of GDP by 2036. It changed the cost-effectiveness thresholds, increasing the price point at which a new medicine will be considered cost-effective by around 25%. Overall medicines spending is also set to increase from 10% to 12% of the UK NHS budget by 2036.

What level of third-party negotiation power did it take to implement such a landmark outcome and how will Medicines Australia approach it locally?

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