Australia Pharmaceuticals and Healthcare Industry Update Quarter 3 2012

  • April 2014
  • -
  • Business Monitor International
  • -
  • 130 pages

Includes 3 FREE quarterly updates

BMI View: Given the country’s increasingly ageing population and the consequential rise in noncommunicable diseases, Australia is a highly attractive place for multinational industry players despite lower growth potential compared to emerging industries. However, we caution that the government’s funding of the Pharmaceutical Benefits Scheme (PBS) may be unsustainable, compounded by a lacklustre economic growth that may pose threats to the pharmaceutical market if the government were to pursue aggressive price-containment policies.
Headline Expenditure Projections .. Pharmaceuticals: AUD12.85bn (US Dollar 13.27bn) in 2011 to AUD13.03bn (US Dollar 12.51bn) in 2012; +1.4% in local currency terms and -5.7% in US dollar terms due to exchange rate fluctuations. Projection upgraded due to general optimism about the generic drugs segment as a result of impending patent expiries.
.. Healthcare: AUD122.43bn (US Dollar 126.38bn) in 2011 to AUD127.57bn (US Dollar 122.50bn) in 2012; +4.2% in local currency terms and -3.1% in US dollar terms due to exchange rate fluctuations. Projection slightly down from Q112 due to the receipt of new historic data from the World Health Organization (WHO).
.. Medical devices: AUD5.45bn (US Dollar 5.63bn) in 2011 to AUD5.62bn (US Dollar 5.40bn) in 2012; +3.1% in local currency terms and -4.1% in US dollar terms due to exchange rate fluctuations. Risk/Reward Rating: In BMI’s Q312 Pharmaceutical Risk/Reward Ratings (RRRs), Australia is ranked second in the regional matrix of 18 countries. It was third in Q212 and the rise is mainly due to the decreasing attractiveness of the South Korean pharmaceutical industry as a result of that government’s cost-containment policies. Australia’s scores are unchanged in this quarter, with an overall RRR of 66.2, which is significantly higher than the regional average of 52.7. It scored highest in country rewards (87) and risks (77), primarily due to its extensive urbanisation, an increasingly ageing population, a proper legal framework and the lack of widespread corruption. Key Trends And Developments
.. In April 2011, the government implemented an average price cut of 23% on 1,000 generic drugs as part of its price disclosure regulation. This round of price cuts is expected to save the government AUD1.9bn (US Dollar 1.9bn) over the next four years.
.. In February 2012, the government’s proposal for a means test on the private health insurance (PHI) rebate as approved by parliament. The changes will help the government save AUD746.3mn (US Dollar 801.4mn) in FY2012/13, helping it to achieve its AUD$1.5bn (US Dollar 1.6bn) budget surplus goal.
BMI Economic View: Australia’s Gross Domestic Product grew at a weak 2.0% in 2011, in line with our expectations. With Q411’s figures particularly poor, we believe the Australian economy will enter recession in 2012 and we maintain our full-year growth projection at 0.8%, compare to a consensus of 3.4%. While a recession will be painful, it could provide Australia with the opportunityto rebalance its economy and build up new engines of growth.
BMI Political View: The Australian Labour Party lost another state following an election in Queensland in March 2012. In many ways its failure reflects the problems faced by the party at the federal level. In particular, the high debt levels that convinced the Labour state government to sell assets against popular sentiment started to impinge on its ability to deliver its policies. We believe the difficulties the Labour government faces have increased the risk of large reductions in planned expenditure on infrastructure and education, and we expect its ability to implement policies at state level to deteriorate, weighing on its national re-election chances.

Table Of Contents

Executive Summary .. 5
Industry SWOT Analysis .... 7
Australia Pharmaceuticals And Healthcare Industry Environment and Risk Analysis 7
Australia Political Environment and Risk Analysis ... 8
Australia Economic Environment and Risk Analysis 8
Australia Business Environment SWOT . 9
Pharmaceutical Risk/Reward Ratings 10
Data : Asia Pacific Pharmaceutical And Healthcare Risk/Reward Ratings, Q312 .... 10
Rewards .. 11
Risks ... 11
Australia - Industry Summary 13
Regulatory Regime . 14
Data : Summary Of TGA Reforms... 15
OTC Switching Climate ... 17
Regional Regulatory Harmonisation .... 18
Regulatory Developments 18
Intellectual Property Issues... 19
Trade Agreements .. 20
Pricing And Reimbursement . 21
Data : Historical PBS Co-Payments .... 22
Price Cuts .... 24
Pricing And Reimbursement Developments ... 25
Data : New PBS Formularies .... 26
Industry Trends And Developments ... 28
Epidemiology .... 28
Data : Main Causes Of Death In Australia, 2010 .... 29
Communicable Diseases .. 29
Data : Percentage Of Children Immunised (December 31 2011) 30
Mental Health Issues... 30
E-Health.. 31
Prescribing Patterns ... 32
Biotechnology And Research 33
Developments In The Biotechnology Segment ... 36
Clinical Trials ... 36
Recent Developments in the Clinical Trials Market .... 38
Medical Device Industry .... 39
Data : Medical Device Classifications . 39
Data : Key Reforms In Medical Device Regulation, 2011.. 40

Market Projection Scenario .. 41
Overall Industry Projection .. 41
Data : Pharmaceutical Sales, from 2008 to 2016 . 43
Key Growth Factors - Market .. 44
Data : Overall Healthcare Expenditure, from 2008 to 2016 45
Data : Government Healthcare Expenditure, from 2008 to 2016 ... 46
Data : Private Healthcare Expenditure, from 2008 to 2016 46
Key Growth Factors - Macroeconomic .... 47
Data : Australia Economic Activity, from 2011 to 2016 . 50
Prescription Drug Industry Projection 51
Data : Prescription Drug Sales, from 2008 to 2016 ... 51
Data : Patented Drug Sales, from 2008 to 2016 ... 53
Generic Drug Industry Projection .. 54
Data : Generic Drug Sales, from 2008 to 2016 56
OTC Medicine Industry Projection 57
Data : OTC Medicine Sales, from 2008 to 2016 ... 57
Medical Device Industry Projection .... 58
Data : Medical Device Sales, from 2008 to 2016 .. 59
Pharmaceutical Trade Projection . 60
Data : Pharmaceutical Trade, from 2008 to 2016 61
Other Healthcare Data Projections ... 62
Key Risks To BMI’s Projection Scenario 62

Competition Overview ... 63
Pharmaceutical Market .. 63
Company Developments ... 64
Pharmaceutical Distribution . 65
Data : Top-20 Pharmaceutical Suppliers By Value From Processed PBS Prescriptions, FY09/10
* .. 67
Company Profiles ... 68
Sigma . 68
Australian Pharmaceutical Market .. 71
Alphapharm (Mylan) ... 73
Herron Pharmaceuticals .. 75
CSL .... 77
Mayne (Halcygen) .. 80
Sanofi . 82
GlaxoSmithKline .... 84
Merck and Co . 86
Novartis .. 88
Data : Population By Age Group, 1990-2020 (‘000) .... 90
Data : Population By Age Group, 1990-2010 (% of total) . 92
Data : Key Population Ratios, 1990-2020 93
Data : Rural.Urban Population Split, 1990-2020 .... 93
Glossary ... 94
BMI Methodology .... 96
How We Generate Our Pharmaceutical Market Projections ... 96
Pharmaceutical Risk/Reward Ratings Methodology 97
Ratings Overview ... 97
Data : Pharmaceutical Risk/Reward Indicators . 98
Weighting 99
Data : Weighting Of Components ... 99
Sources ... 99

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