Australia Pharmaceuticals and Healthcare Report Q3 2009

Publication Date	June 2009
Publisher	Business Monitor
Product Type	Report
Pages	114
ISBN Number	1748-1767
Product Code	BMI02364

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Summary

In 2008, Australia's pharmaceutical market was worth US$7bn. BMI expects the pharma industry to post modest growth over the forecast period, with a CAGR of 3.2% between 2008-2013, in local currency terms. Growth will be largely due to the market's highly advanced nature, which has resulted in a mature growth outlook. In 2009, we forecast that drug expenditure will contract in US dollar terms, primarily due to an appreciation of the Australian dollar against the US dollar. However, growth in real terms will be strong in 2009, although it will begin to slow over the medium-term as austerity measures, such as cuts on the Pharmaceutical Benefits Scheme (PBS), make their presence felt.

According to a report by Australian-based Access Economics, which was commissioned by the Pharmacy Guild of Australia, recent reforms enacted by the PBS will save the government a total of AUD7.4bn (US$5.32bn) over the next 10 years. This contradicts the widely accepted view, which states that PBS spending will become unmanageable over the coming years. Policies introduced in 2008 included mandatory price reductions of 25% for drugs, accounting for 50% of PBS prescriptions. This has been aimed to combine with the ongoing policy of establishing a 12.5% reduction in price when a new drug is listed. Increased transparency has also helped reduce costs, and drug manufacturers now have to give information to the government regarding the market prices of their products. If there is a significant difference between the PBS price and the market price, the PBS price is reduced. According to the report, a number of stakeholders will be negatively impacted by the reforms. For example, price disclosure guidelines are expected to reduce pharmacy incomes by AUD1.2bn (US$863mn) in the period up to 2015, working out at a cost of AUD35,500 (US$25,553) per pharmacy. Pharmacies could find themselves in a difficult situation as they cannot raise the prices of drugs to make up for lost income. Rent and wage costs are also currently rising at a rate higher than inflation, so it will be difficult for them to make savings in these areas in order to protect the bottom line.

Elsewhere, Australia's government has set up a multi-million dollar fund to help cash-poor biotechnology firms weather the global financial crisis. Because this follows a similar move by the Indonesian state, BMI believes that a regional trend may be emerging. Small biotech firms require regular injections of cash to sustain operations. In return, investors receive a portion of equity and news of products nearing the market. Given the nature of the sub-sector, eventual commercialisation of a proprietary agent results in significant returns for both the founders and funders of the company. However, the credit crisis has meant that free cash for high-risk investments is in short supply.

Australia has moved up to second place in BMI's Business Environment Ranking for the Asia Pacific region, with the country benefiting from an advanced drug sector and an excellent regulatory system.

Content

Executive Summary
SWOT Analysis
Australia Pharmaceuticals And Healthcare Industry SWOT
Australia Political SWOT
Australia Economic SWOT Analysis
Australia Business Environment SWOT
Pharmaceutical Business Environment Ratings
Limits of Potential Returns
Risks to Realisation of Returns
Australia - Market Summary
Regulatory Regime
OTC Switching Climate
Regional Regulatory Harmonisation
Recent Regulatory Developments
Intellectual Property Issues
Trade Agreements
Pricing and Reimbursement
Price Cuts
Additions to Reimbursed Drugs List
Products Added To The PBS In November 2007
Recent Pricing and Reimbursement Developments
Industry Trends and Developments
Epidemiology
Mental Health Issues
Healthcare Reforms
E-Health
Healthcare Expenditure
Prescribing Patterns
Private Healthcare Insurance
Domestic Pharmaceutical Sector
Recent Domestic Sector Developments
Foreign Industry
Recent Foreign Sector Developments
Retail Pharmacy Sector
Biotechnology and Research
Recent Biotechnology Developments
Clinical Trials
Medical Devices
Recent Developments in the Medical Devices Sector
Industry Forecast Scenario
Overall Market Forecast
Key Growth Factors - Industry
Key Growth Factors - Macroeconomic
Prescription Market Forecast
Patented Drug Market Forecast
Generics Market Forecasts
OTC Market Forecast
Pharmaceutical Trade Forecasts
Other Healthcare Data Forecasts
Key Risks to BMI's Forecast Scenario
Competitive Landscape
Pharmacy Over-The-Counter Medicine Sales In Australia (US$) 2007
Company Profiles
Leading Multinationals
Pfizer
Sanofi-Aventis
GlaxoSmithKline
Merck Sharp & Dohme (Australia)
Novartis
Roche
AstraZeneca
Eli Lilly
Indigenous Manufacturers
Sigma Pharmaceuticals
Australian Pharmaceutical Industries
Alphapharm (incorporated into Mylan)
Herron Pharmaceuticals
Mayne Pharma (Hospira)
Country Snapshot: Australia Demographic Data
Section 1: Population
Section 2: Education and Healthcare
Section 3: Labour Market and Spending Power
BMI Forecast Modelling
How We Generate Our Pharmaceutical Industry Forecasts
Pharmaceutical Business Environment Ratings Methodology
Ratings Overview
Weighting
Sources
List of Tables
- Table: Asia Pharmaceuticals Business Environment Ratings
- Table: Priorities Of the Therapeutic Goods Administrations Strategic Plan, 2006-2008
- Table: Historical PBS Co-payments
- Table Some Recent Additions to PBS
- Table New PBS Formularies
- Table: Examples Of Drugs In The New PBS Formularies Classification, September 2007
- Table Number of prescribed medications 2006-7
- Table: Australian Biotech Industry Facts
- Table Examples Of Medical Devices Classifications
- Table: Australia - Drug Expenditure Indicators, Historical Data and Forecasts, 2003-2013
- Table: Australia - Health Expenditure Indicators, Historical Data and Forecasts, 2003-2013
- Table: Australia - Economic Activity, 2006-2013
- Table: Australia - Prescription Market Indicators, Historical Data and Forecasts (AUDmn unless otherwise stated)
- Table: Australia - Patented Market Data And Forecasts, Historical Data and Forecasts, 2003-2013
- Table: Australia - Generics Market Indicators, Historical Data and Forecasts, 2003-2013
- Table: Australia - OTC Market Indicators, Historical Data and Forecasts (AUDmn unless otherwise stated)
- Table: Australia - Pharmaceutical Trade Indicators, Historical Data and Forecasts, 2003-2013 (US$mn)
- Table: Australia - Other Healthcare Data And Forecasts, Historical Data and Forecasts, 2003-2013
- Table: Demographic Indicators, 2005-2030
- Table: Rural/Urban Breakdown, 2005-2012
- Table: Education, 2002-2005
- Table: Vital Statistics
- Table: Employment Indicators, 2001-2006
- Table: Consumer Expenditure, 2000-2012 (US$)
- Table: Average Annual Wages, 2000-2012
- Table: Pharmaceutical Business Environment Indicators
- Table: Weighting Of Components

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Product features / use

Level	General Industry Strategies
Data	Detailed Market Forecasts
Profiles	Profiles of Key Companies
Features	Contains SWOT Analysis
Extra Info	Consumer Trends Highlighted