Pharmaceuticals are the future

Australia's pharmaceutical manufacturing looks set for a substantial growth to meet the increasing demands of Asian health-care products with exports increasing fivefold by 2020.

Asia, with its rapid urbanisation and rising living standards, has pushed pharmaceuticals to a huge extent and serves as a massive market for advanced health-care products and other medicinal drugs.

Pharmaceuticals are now firmly established as the number one "substantially transformed" manufacturing export, beating the car industry in 2011-12 with $2.5 billion in exports and the wine sector with $2 billion, according to the new data published by the Australian Bureau of Statistics (ABS).

ABS figures show that the medicines industry exported more than $4 billion worth of pharmaceutical and medicines products in 2011-12, up from $3.7 billion the year before.

"These numbers underline the significant contribution Australia's medicines industry continues to make to the economy," Brendan Shaw, chief executive of Medicines Australia, stated.

Shaw added "the Australian medicines industry has continued to export more goods around the world than any other hi-tech industries.

"This reaffirms the pharmaceutical sector as one of the unsung heroes of Australian industry. It is a real export success story."

According to Shaw while the majority of other manufacturers were losing ground last year, medicines industry exports actually grew by seven per cent.

"At a time when Australia is debating the future of manufacturing in this country, this data underscores the important economic contribution the Australian medicines industry is already making to the community," Shaw said.

Even though the pharmaceutical manufacturing industry suffers from the same high-wage, high-dollar environment that affects other manufacturers, the Australian competitive advantages in skills and science are helping it resist the trend, and exports are rising.

Asia takes half of Australia's exports and old factories slated for closure in Australia are now being left open or even expanded to supply Asia's voracious appetite for drugs.

Homart Pharmaceuticals, which took out Manufacturers' Monthly's 2012 Manufacturer of the Year award, said that Homart's exports have been growing at a breakneck speed of 850 per cent in the last three financial years since July 2008 due to its export to Greater China Countries project, despite the GFC and high Australian dollar.

The company's largest market is China, but it is planning to increase its presence in other countries.

It currently manufactures an extensive range of products in its Sydney factory and continues to invest in research & development, launching seven to ten new products every year.

The sector's resilience shows that it should be a priority for a nation looking to replace its dying low-value manufacturing operations with higher-value ones.

For example GlaxoSmithKline Australia said it will expand its blow-fill-seal manufacturing operations, which pack medicines in innovative plastic containers in Melbourne; blood products and vaccine group CSL confirmed it is building a $250 million biotechnology product research and manufacturing facility at its Melbourne blood fraction plant; AstraZeneca Australia has an agreement to supply the Chinese market with asthma medicines manufactured at its plant in Sydney; Leo Pharma exports active ingredients for skin conditions from its manufacturing facility on the Gold Coast; IDT Limited, a Melbourne based Australian- owned company, exports active ingredients for cancer medicines to companies all over the world; and Sydney biotechnology company Pharmaxis has expanded production of its Bronchitol treatment for chronic respiratory conditions at its;new 7000 square metre factory in Sydney.

Cyclopharm, a radiopharmaceutical company, also announced a three party agreement with Queensland Mater Misericordiae Health Services and Queensland X-Ray to establish a cyclotron manufacturing unit at the South Brisbane Mater Hospital by 2014.

According to Cyclopharm "the deal will ensure Australia's growth in the pharmaceutical manufacturing sector as a leading provider of FDG and emerging PET radiopharmaceuticals".

Tim Oldham, president of Hospira Asia Pacific and representing Australia's Generic Medicines Industry Association said Australia's pharmaceutical industry is a high value-add sector and one which other countries look to for its high production standards, innovation and quality assurance.

"We are way ahead in terms of being the leading exporter of elaborately transformed goods but we can't be complacent with intense competition coming from countries such as India, which can produce the same medicines for less," explained Oldham.

He continued to say that "we need to focus on the innovative manufacturing sectors such as pharmaceuticals in order to be less buffeted by the two speed economy".