Updated on 14 May 2013
The Australian government is under pressure to offer drugs at affordable prices and to lower cost of healthcare
Increase in aging population along with rising burden of non communicable diseases in Australia have been putting pressure on the government to offer drugs at affordable prices and to lower cost of healthcare. The bioscience industry (mainly generic players and medtech firms, biotech companies and healthcare players) will see growth opportunities in near future due to the introduction of price containment policies. However, the government wants to cut down the rise in expenditure on pharmaceutical benefits scheme (PBS).
In this regard, the government has already announced price reductions of 75 drugs in December 2011, which will be effective in April 2012. This cost control measure will help the government to save $1.9 billion over a period of four years. In December 2011, the government also released a blueprint for reforming the Therapeutic Goods Administration (TGA), following the assessment of recommendations by the working group on the promotion of therapeutic products.
In February 2012, the parliament approved a proposal for conducting tests on the private health insurance (PHI) rebate. The changes will help the government save $801.4 million during the financial year 2012-13, helping it to achieve its $1.6 billion budget surplus goal. In May 2012, the federal government while presenting the budget for 2012-13 announced a surplus budget of $1.6 billion.
Under the budget, the government will contribute $61.4 billion towards healthcare. However, tough business conditions currently confront the medicines industry in Australia, according to a report published by Medicines Australia in April 2013. The organization's Fact Book reveals that medical sales and service income for the medicines industry fell to $9.72 billion in 2010-11, down from $10.02 billion in 2009-10 , a decline of three percent. The number of Australians employed in the medicines industry declined for the fourth consecutive year, to 13,375. Annual investment in pharmaceutical R&D grew by just 0.3 percent, from $1.034 billion in 2009-10 to $1.037 billion during 2010-11.
Despite the fact that job losses, falling sales growth, a high dollar value and increased costs created a difficult business environment, the Australian medicines industry managed to achieve its best export performance on record in 2012, with exports topping $4.3 billion according to new figures published by the Australian Bureau of Statistics (ABS) in February 2013. The new ABS report shows that exports of pharmaceutical and medicinal products were up $578 million or 15 percent on the previous year.