The Australian pharmaceutical sector has grown to over A$20 billion and is projected to reach A$30 billion by 2020, making it Australia's largest exporting industry. Government reforms to the Pharmaceutical Benefits Scheme, which accounts for over A$6-7 billion in spending annually, are expected to further growth. Opportunities exist in clinical drug trials, which generate A$1 billion annually, and exporting to Asian and African markets. While regulatory changes will impact industry strategies, the growth of generic drugs indicates a shift toward that market segment. There is potential for increased global sourcing from countries like India and China to lower production costs as the sector expands.

1. www.brickworksourcing.com
Australian Pharmaceutical Phenomena
February 8, 2013
Procurement Consulting – Brickwork Sourcing
Brickwork India (Confidential)

2. Current Scenario
 The Australian pharmaceutical sector has crossed the A$20 billion mark.
 The Australian pharmaceutical sector is expected to touch A$30 billion by
2020.
 The industry is Australia’s largest exporter, with products worth
approximately A$4.1 billion shipped to over 60 markets worldwide.
 The sector is ranked 15th around the world.
 The industry seems set to grow further amid extensive government
reform centered on the A$6-7 billion plus per year Pharmaceutical
Benefits Scheme (PBS).
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3. The Future Road
 One important area to be addressed would be the reform processes
adopted by the Australian government, which would essentially regulate
pharma exports and investments.
 Regulatory change is an important parameter to determine the way
forward for pharma majors looking at increasing sales.
 The growth observed in generic drugs also indicates the direction in which
pharma companies in Australia are migrating, this seems to be the area of
focus for the pharma majors.
 The Australian pharma scene is governed by the PBS which is as important
as a prerequisite for informed policy development in Australia.
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4. Growth Drivers and Opportunities
 The growth driver for pharma seems to be Australia’s life expectancy
combined with increasing lifestyle diseases and leading health problems.
 There is an opportunity in the Australian clinical trials industry which is
estimated to generate revenues of A$ 1 billion annually.
 In terms of exports the top destination for respondent companies in the
Australian pharma exports by FOB value was Asia which was followed by
South Africa. Both of these destinations contribute to more than 50% of
the total exports.
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5. Market Potential
 The number of deals involving Australian drug developers has noticeably
risen in the last few years; an example for this was noted in 2010 which
saw 10 sizeable transactions worth A$1.4 billion.
Australia is poised to capture the pharmaceutical sector and there is a
huge opportunity waiting for investors in the pharma sector in Australia.
There is a need for new strategies to implement sourcing of materials and
equipment for production of drugs and healthcare products from
countries such as India and China. This would mean that there is an
increased need of global sourcing; Brickwork Sourcing works with global
pharma companies and has capabilities of providing end-to-end sourcing
as well as vendor and supply chain management solutions.
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6. About Brickwork Sourcing
Brickwork is the pioneer of the Virtual Office business. We
provide virtual support for businesses across the globe. Our
well informed Remote Sourcing Analysts (RSAs) can provide
support at any or all stages of your sourcing lifecycle. Your
Virtual Sourcing Office can be a large team of analysts
supporting large companies with established procurement
processes or a one-man-show to function as your entire
procurement office.
Disclaimer
“The information contained in this document that includes text, graphics and links, are provided on an “as-is”, "with all faults" and "as
available" basis and are without warranty of any kind. While Brickwork relies on sources that are believed to be reliable, it cannot rule
out errors in judgment or application. The document is intended for “information” and “general guidance” purposes only.” Investment
decisions and/or other decisions based on the conclusions and potential strategies mentioned in the document are not necessarily
endorsed by the Brickwork management.” 6

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THANK YOU
Contact:
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Sanjeeth Hegde
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15 February 2013