Health and Life Sciences
The Health and Life Sciences Cluster facilitates industry exchange, provides essential insights, addresses key issues, and offers market entry consulting services for industry stakeholders.
The Health and Life Sciences Cluster integrates a wide spectrum of market segments, ranging from medical technology devices, pharmaceuticals, biotechnology, and life sciences to healthcare and research institutions and government stakeholders.
Bringing together stakeholders from industry and research, as well as services, policy, regulatory authorities, and market consultants, our Health and Life Sciences Cluster provides its members the opportunity to influence the cluster development and industry by actively engaging with the cluster and thus shape our advocacy roadmap and access valuable insights. Members will be invited to hosting, sponsoring, and speaking opportunities at industry-focused events aimed at both the German and the Australian markets. You will also benefit from complementary consulting services and heightened exposure and visibility. Find out more about membership options here.
For new entrants to the market, the Australian Health Sector promises continuous growth in the coming years. Australians have a high disposable income and highly value good medical care. The aging population is leading to rising demand for branch-specific products. Further, Australia’s huge geographical dispersion and remoteness for some of its population, combined with congestion of health care service providers and a strong push for digitalisation in the health care sector, allows for great opportunities in the field of digital health solutions.
Medical devices and technologies, the pharmaceutical industry, and the biotechnology and life sciences sector are promising fields for foreign investors. While Australia has one of the world’s leading health systems, a growing and aging population are placing great demand on the Health Sector. The Australian society faces internal pressures driven by:
- rising chronic disease rates
- inequitable access to services and gaps in the highly casualised workforce
- clinical supply chain issues
These will need to be addressed by private and public investment.
In 2019–20, health spending accounted for 10.2% of the gross domestic product (GDP) in Australia, putting the health care industry in the leading position for all expenditures. Health expenditures per capita equaled $7,926 in 2019-20, making Australia one of the world’s top 10 countries in terms of per capita expenditure. Healthcare is also the largest employing industry in Australia providing work to over 13.5% of all employees.
The newly elected government has made a pledge to further strengthen the Australian health system and has committed over $537 billion over the next four years. Among many others, the investment aims to make more medicine accessible via the PBS and enhance digital health solutions. The government also supports investments in Australian health and medical research with initiatives such as the Medical Research Future Fund, which will benefit from additional funding, and the inclusion of medical products manufacturing in the Modern Manufacturing Initiative. Additionally, Australian state and territory governments have dedicated record investment in the current budgets to build and redevelop hospitals and health facilities across the nation.
Australia’s universities are part of the world’s leading institutions in pharmaceutical research and medicine.
Australia relies heavily on imports to cover the market demand for medical technology products: Approximately 85% of medical technology devices are imported, with Germany being one of the main supplier countries. At the same time, local manufacturing remains growing and profitable, with Australian medical manufacturing revenue expected to grow at an annualised 3.7% over the five years through 2025-2026.
Health in Australia
Therapeutic goods such as medicines and medical devices or vitamins need to be registered with the Therapeutic Goods Administration (TGA). Products not classified as therapeutic goods such as cosmetics are assessed by the Australian Industrial Chemicals Introduction Scheme (AICIS).
There are three major players on the Australian market for therapeutic goods: Cochlear, Resmed and Baxter comprise 60% of the industry revenue. The rest of the domestic producers are specialised in niche markets and have an export ratio of 50%. Supply requirements are covered by imports up to 85%.
Australia’s healthcare is divided into a public and private system. Medicare as the universal health care scheme is available to Australian citizens, permanent residents and people from countries with reciprocal agreements. It covers all of the costs of public hospital and general practitioners’ services, while private health insurance covers additional services such as private patient in-hospital and non-medical services (e.g. dental, physiotherapy and optical services).
Digital Health encompasses the digitalised field of medicine and its applications, improving the healthcare system by using technology – ranging from data analysis and hospital management to artificial intelligence and telehealth. Digital systems for medical care and public health are widespread in Australia. For example, the electronic patient file My Health Record has a participation rate of around 90% of the population. Telemedicine and virtual consultation are improving health coverage in many rural and remote areas.
Life Sciences & Biotechnology
Life science innovation in Australia has a proven track record and consistently ranks among the top five in biotechnology innovation. The high level of education, strong IP protection, and a stable political framework advance Australia’s strength in key areas of the sector. Incubation funds, innovation and startup hubs and government initiatives further strengthen the attractive research climate.
A highly skilled workforce and research teams paired with state-of-the-art facilities, streamlined approval processes, and a diverse population makes Australia a leader in cost-efficient and highly effective translational research and clinical trials.
The pharmaceutical market is expected to grow in retail as well as local manufacturing revenue by 2% and 3.3% respectively in the next five years. This growth is driven by heightened activities in vaccine and novel therapeutics R&D, as well as by underlying factors such as the growing burden of chronic diseases and the rising geriatric population.
Pharmaceutical retailing is subsidised by the National Medicines Policy’s Pharmaceutical Benefits Scheme (PBS), which sets the maximum price that can be charged for all pharmaceuticals listed on the scheme. Consumers pay a low maximum amount for PBS medicines, with PBS covering the remaining cost.
Research and Funding
Australia’s universities are part of the world’s leading institutions in the fields of pharmaceutical research (Monash university) and medicine (University of Melbourne). The attractive research climate is strengthened by incubation funds such as BioCurate in Melbourne, Life Sciences in Queensland or the Biomedical Translation Fund of the government in Canberra.
R&D Tax Incentive
Australia has an attractive framework for clinical studies. The Research & Development Tax Incentive (R&DTI) offers tax paybacks or direct financial support for research projects. For example, project costs can be up to 60% lower than in the US. Another positive factor is fast admission times for clinical studies.
Further AHK Services
Business Partner Representation, Business Partner Matching, Market Analysis, Company Incorporation, Tax & Legal and Human Resources
More information about other Services of the German-Australian Chamber can be found here.