Good market access and government’s welfare reforms such as subsidies for prescription drugs are expected to drive the pharmaceutical market in Australia to $25bn in value by 2020, according to a report by GlobalData.
Titled ‘CountryFocus: Healthcare, Regulatory and Reimbursement Landscape – Australia’, the report estimates Australia’s pharmaceutical market size in the current year to be $22.85bn and grow at a compound annual growth rate of approximately 2% by 2020.
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Awareness among Australian citizens regarding the need for early detection of lifestyle and chronic diseases is on the rise, creating a positive market environment, states the report, which adds that the government’s scheme to offer prescription medicines at subsidised prices for eligible patients is in favour of the industry.
Named Pharmaceutical Benefits Scheme (PBS), the scheme has been witnessing the addition of new drugs each year.
Aside from choosing companies to supply to the PBS, the government is also supporting the industry financially by providing tax incentives on research and development (R&D).
New entrants have significant investment opportunities in the Australian pharmaceutical industry due to the emerging generic drugs market propelled by the PBS and increasing foreign direct investment (FDI), which stood at $46.3bn in 2014, making the nation among the top ten global destinations for FDI.
Furthermore, the proposed Australian innovation and manufacturing incentives, if approved, will create a favourable tax environment by bringing down the tax payable on profits derived from the commercialisation of intellectual property.
The proposal was made by the Export Council of Australia and the Medical Technology Association of Australia.
