Abstract
In 2008, Australia’s pharmaceutical market was worth US$6.93bn, it is
forecast to reach US$7.28bn in
2009 and rise to over US$10bn in 2013,
which represents a compound annual growth rate (CAGR) of
7.72. This is a
substantial growth rate considering the mature nature of the market, with
virtually the
whole population having good access to medicines despite the
geographical size of the country and low
population density in some areas.
Drug expenditure will grow in US dollar terms throughout the forecast
period, although in local currency terms the market is expected to contract in
2012 and 2013. This is
primarily due to an anticipated weakening of the
Australian dollar against the US dollar as the US
economy recovers.
According to a report by Australian-based Access Economics, commissioned by
the Pharmacy Guild of
Australia, recent reforms enacted by the
Pharmaceutical Benefits Schedule (PBS) will save the
government a total of
AUD7.4bn (US$5.32bn) over the next 10 years. However, others such as New
South Wales director-general Debora Piccone feel that the Australian system of
free universal healthcare
is set to disappear in as little as five years
and that a US-style end user-pays system is inevitable. This is
said to be
a result of an ageing, although affluent, population and out-of-control costs.
Additionally, a
study led by UWA researcher Anna Hynd reported that,
despite price cuts, some low-income groups are
struggling to pay for some
treatments and as a result one in five Australian adults may be skipping
doses
or refraining from purchasing medicines because of the costs.
Local company Biota has had a boost in April 2008 when its share price rose by
77% (to AUD1.57). This
is a result of governments around the world
considering stockpiling Relenza which is marketed by
GlaxoSmithKline
(GSK), but from which Biota receives 7% royalties from sales.
Sigma has
launched a court action against Wyeth Pharmaceuticals in order to release its
generic version
of the international firm’s antidepressant Efexor,
which had global sales of USD3.9bn in 2007-8, stating
that Wyeth’s
patents are invalid on ‘a number of grounds’.
Australia’s government has set up an AUD83mn Innovation Investment
Follow-on Fund (IIFF) and a
research and development tax credit to help
cash-poor biotechnology firms weather the financial crisis.
The IIFF will
be released to licensed venture capital firms to invest in small technology
companies.
Australia has moved up to the top of BMI’s Business
Environment Ranking for the Asia Pacific region,
as a result of its
advanced drug sector, an excellent and improving regulatory system and
investment in
local industry. Its strong patent protection – 25
years as opposed to 20 years in other parts of the world –
is good
for local innovation but may weaken local generics companies.
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