Introduction to the medicines industry
Medicines Australia is the peak body representing the innovative, research-based, medicines industry in Australia.
Our members develop, manufacture, and supply innovative medicines, biotherapeutics and vaccines to the Australian community available on the Pharmaceutical Benefits Scheme (PBS) and the National Immunisation program (NIP). Our membership comprises small, medium, and large Australian and multi-national companies.
The Australian medicines industry faces an increasingly competitive international investment environment and mounting compliance and regulatory guidelines whilst continuing to invest in the research and development of new and innovative products and ensuring the viability of commercialisation. Despite these challenges, Medicines Australia member companies have continued to commit investment in Australia.
The Strategic Agreement provides business certainty
The 2022-2027 Strategic Agreement between the innovative medicines industry and the Australian Government is the key to ensuring business certainty. When medicines companies have clarity on their business environment they can invest in local manufacturing and research and development. The Strategic Agreement is a source of significant cost savings on the price of breakthrough medicines. A critical aspect to this Agreement is reform of the Health Technology Assessment (HTA) for medicines on the PBS. The review of the National Medicines Policy (NMP) in parallel provides an important framework for the HTA reform. If HTA reform is done as proposed in many submissions to the House of Representatives Inquiry on the approval processes for new drugs and novel medical technologies in Australia1, it could be the greatest reform of the PBS in the last 30 years and provide capacity to list new innovative medicines faster while maintaining the need for a predictable, sustainable expenditure.
Investment in the PBS is essential
- The 2022-2023 Budget papers state that “expenses for the pharmaceutical benefits and services sub-function (but not the Government’s overall investment in pharmaceutical benefits) is expected to decrease by 18.6% in real terms over the period 2019-20 to 2023-24”.
- The New Medicines Funding Guarantee (announced in 2020) and efficiencies from the 2022-2027 Strategic Agreement’s statutory pricing reforms, will support at least $5 billion of uncapped new investment to be fully re‐ invested in the PBS, ensuring all Australians continue to have the earliest possible access to new medicines over the five-year term of the Strategic Agreement and beyond2
Commitment to PBS/NIP listing is critical
Medicines Australia supports the Government’s commitment to ensuring that Australians have access to affordable medicines through the listing on the PBS or NIP of every drug or vaccine recommended by the independent experts, the Pharmaceutical Benefits Advisory Committee (PBAC). We continue to work with the Government on implementing their New Medicines Funding Guarantee as a critical industry partner.
Introduction to the PBS
Since 1948 the Pharmaceutical Benefits Scheme (PBS) has provided Australian patients with access to affordable and high-quality, safe and effective medicines when they need them. The PBS has evolved from basic access to antibiotics and painkillers to a sophisticated system that has had to contend with changing burdens of disease and evolving innovations in treatments.
Access to new and innovative medicines
Australians currently wait an average of 391 days for a proven innovative medicine to be listed on the PBS and takes far longer than most developed countries. Our goal is fast and universal access to innovative, high- quality medicines for all Australians when they need them, and our members work closely with Government to overcome barriers to support and improve patient access.
The value of medicines
Since the COVID-19 pandemic, Australians have learned that a healthy population guarantees a healthy economy. Far beyond the health outcomes that our member companies’ medicines deliver for individual patients, they have a positive impact on the community and the economy through contribution to a healthy, productive and diverse economy where innovation, investment and jobs are created.
This contribution depends on fast medicines access through regulatory and reimbursement processes and a stable and predictable business operating environment to encourage investment. Working with the Australian Government on iterative Strategic Agreements should create an environment that delivers health outcomes and generates broader economic value to the Government through health and well-being and through second round effects of improving productivity, increasing GDP, generating government revenue through income tax collection and reducing expenditure on welfare benefits, as well as spillover effects in jobs and knowledge creation.
Investing in Australia’s clinical trials ensures a robust workforce, better health outcomes for patients and an increased body of scientific knowledge and medical innovation. Medicines Australia has strongly encouraged successive Australian Governments to implement reforms that will further enhance Australia’s attractiveness as an investment destination for clinical trials. The imperative is now if Australia wants to become a clinical trial global hub over the next decade.
Intellectual Property (IP)
Australia’s patent system, administered through IP Australia, aims to encourage research and development that delivers value to the economy and the community (creating new jobs and industries). IP measures that deliver this value is necessary and we recommend further attention is placed on building commercialisation capability by encouraging investment in, and innovation by, the pharmaceutical industry.
Medicines Australia’s Code of Conduct sets the standards for the ethical marketing and promotion of prescription pharmaceutical products in Australia. It complements the legislation requirements of the Therapeutic Goods Regulations and the Therapeutic Goods Act. The Code of Conduct can be found on the Medicines Australia website: https://www.medicinesaustralia.com.au/code/
Medicines Australia supports the role of stakeholders to advocate for access to medicines. Our members provide guidance on how to most effectively engage Government to advocate for patient access.
Foreign investment is a key driver of economic growth and prosperity in Australia. There are exciting opportunities for Australia to grow its share of the pharmaceutical trade, with global demand for medicines forecast to increase at 3-6% compound annual growth rates to 20253.
However, Australia competes with other countries for this investment, so we must ensure that our investment landscape does not fall behind other countries.
Australia’s future prosperity will rely on science, technology, engineering and mathematics (STEM) – disciplines that are at the core of innovation. STEM qualified employees are the core drivers of innovation and are fundamental for businesses which rely on STEM graduates to remain competitive, and their expertise will continue to facilitate and sustain economic growth.
The medicines industry employs around 24,000 Australians, many of which are highly skilled jobs, with above average incomes. Australia’s medicines industry is one of Australia’s major innovative industries, and consists of research, manufacturing, marketing and sales arms. It is an integral part of our knowledge intensive economy.
The jobs the medicines industry create require a workforce with diverse skills and educational levels.
- https://www.health.gov.au/ministers/the-hon-greg-hunt-mp/media/98-billion-new-investment-in-australias-health-care-and-covid-response (p. 10)
- https://www.iqvia.com/insights/the-iqvia-institute/reports/global-medicine-spending-and-usage-trends-outlook-to-2025#:~:text=The%20global%20 medicine%20market%20%E2%80%94%20using,projected%20to%20be%20%24157%20billion