KUALA LUMPUR, Sept 5 – Fitch Solutions Macro Research has revised Australia’s pharmaceutical market forecast upwards for 2023.
Combined sales of prescription drugs and over-the-counter medicines are now expected to increase from US$12 billion last year to US$14 billion in 2023, projecting a compound annual growth rate of 4.4 per cent.
Australia is categorised as a key developed market for innovative drug manufacturers, as its annual per capita pharmaceutical spending of US$483 is similar to the Netherlands (US$437) and Sweden (US$511).
“Sustainability of government-funded medicines will be increasingly questioned,” the research firm said in its outlook today.
Australia’s latest therapeutic innovations are regularly included in the Pharmaceutical Benefits Scheme (PBS), which offers government-subsidised prescription drugs in the country. The government covers 89 per cent of PBS spending, while patient co-payments account for the remainder.
“Each prescription costs the scheme an average of AU$64 (US$43). Despite the recent drop in PBS expenditure, over the past 10 years, annual PBS spending has risen by an average of 4.9 per cent, easily outpacing inflation,” said Fitch Solutions Macro Research.
The firm noted that Australia’s Therapeutic Goods Administration has seen a series of reforms that speed up approval of new pharmaceuticals, encouraged by research and development-based multinational firms.
“New initiatives such as the country’s orphan drug programme, a Special Access Scheme, an Authorised Prescriber Scheme, and a priority review pathway were implemented in July 2017.”
Fitch Solutions Macro Research also said the Liberal/National coalition’s unexpected victory in the May 2019 election should facilitate government support for medium-term healthcare investments, as the election results will allow broad policy continuity, with the prospect of sweeping environmental regulations or significant tax hikes mitigated.
The firm noted that Australia raised annual government spending on health from US$55.1 billion in 2019-20 to US$60.2 billion in 2022-23, an increase of almost 10 per cent.
The government budget also included an extra US$223 million for new and amended listings on the PBS, including several innovative cancer medicines.