Report Published: "Australia Pharmaceuticals & Healthcare Report Q2 2016"

From: Fast Market Research, Inc.
Published: Thu Apr 28 2016

As the Australian government continues to focus on cost containment while at the same time increasing the population's access to innovative medicines, companies will increasingly need to justify the price of their treatments by demonstrating their value to the broader healthcare system in improving the quality of life. This will need to be further substantiated by rigorous economic analysis which showcases a strong incremental product cost effectiveness ratio.

Headline Expenditure Projections

Pharmaceuticals : AUD14.0bn (USD10.5bn) in 2015 to AUD14.5bn (USD9.6bn) in 2016; +3.4% in local currency terms and -8.6% in US dollar terms, due to significant exchange rate fluctuations.
Healthcare: AUD157bn (USD118bn) in 2015 to AUD162bn (USD108bn) in 2016; +3.4% in local currency terms and -8.5% in US dollar terms, due to exchange rate fluctuations.

Full Report Details at

Risk/Rewards Index

In Q216 Australia remains ranked as the third most attractive market to pharmaceutical investors in the Asia Pacific region (scoring 66 out of 100), after Japan (75.6) and ahead of South Korea (65.2). Australia's Risk/Reward Index score is driven by a relatively high drug spending per capita, a large pensionable population and robust population growth but dragged down by poor sector growth.

Latest Updates

In January 2016, the Australian Medical Association noted that the country's public healthcare system is coming under stress from reduced funding.

In December 2015, the government announced that AUD1bn (USD712mn) will be spent adding new hepatitis C treatments to the Pharmaceutical Benefits Scheme. New treatments include Harvoni (sofosbuvir and ledipasvir) and Daklinza (daclatasvir).

That same month, the Federal Health Department complained to the Australian Competition and Consumer Commission that the rise in price of Panadol Osteo (paracetamol) cannot be justified by changes to the Pharmaceutical Benefit Scheme which came into force in December 2015.

BMI Economic View

Fiscal consolidation will remain a challenge in Australia over the coming years owing to poor revenue collection and insufficient expenditure cutbacks despite the federal government's strong commitment to achieve a budget surplus. We are less optimistic than the Australian Treasury, forecasting the federal budget deficit as a proportion of GDP to come in at 2.1% in FY2016/17 (as compared with the government's forecast of 1.9%). Australia's government expenditure as a share of GDP is likely to remain elevated as the population ages, in turn compromising long-term growth as the private sector is crowded out.

BMI Political View

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