Slow progress: Ongoing reforms and strong import competition limit industry growth

The Australian Pharmaceutical Product Manufacturing industry has contended with several challenges over the past five years. Echoing trends on the global pharmaceutical stage, these challenges have included a changing regulatory and risk environment, a patent cliff that has seen manufacturers lose exclusive manufacturing rights to some of the most profitable drugs in the industry's history, and reform-driven pricing pressures. On the local front, ongoing reforms to the Pharmaceutical Benefits Scheme (PBS) have been particularly significant, as mandatory price disclosures have continued to reduce prices. Increased regulatory burden and heightened competitive pressures have added to the challenges that local industry players are currently more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22

Industry Threats & Opportunities

  • Industry players will adopt new business models as key drugs lose patent protection
  • The industry is highly dependent on imported products, including active ingredients
  • Ongoing deflationary pricing pressures are expected to constrain industry revenue
  • Industry Report - Industry Products Chapter

    Industry operators produce pharmaceutical products for human use. These products include prescription pharmaceuticals (patented and generic) that may or may not be listed on the PBS, over-the-counter (OTC) medicines, and complementary medicines including vitamins and dietary supplements. Prescription pharmaceuticals include products that can only be obtained in hospitals or with a medical practitioner's prescription. These pharmaceuticals include branded products, which are the first commercially available version of the drug and usually subject to patent; and generic products, which are chemically equivalent to a branded, out-of-patent product and may be sold under a trade name or chemical name. Ind...purchase to read more.

    Additional Insights for the Pharmaceutical Product Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Pharmaceutical Product Manufacturing Industry are

  • Economies of scale
  • Establishment of brand names
  • Having technology sharing arrangements with major players
  • IBISWorld analysts also discuss how external factors such as Federal funding for the Pharmaceutical Benefits Scheme and Population aged 50 and older in the Pharmaceutical Product Manufacturing industry impact industry performance..

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    What's in this report

    What is the Pharmaceutical Product Manufacturing Industry?

    The industry comprises companies that manufacture medicinal and pharmaceutical products for human use from both synthetic (chemical) and natural sources. Other products include chemical or diagnostic testing agents, blood serums and biotech products. Industry activities include manufacturing active pharmaceutical ingredients and synthesising chemical ingredients, late-stage packaging and fill-finish activities.

    Industry Products
  • Benefit-paid pharmaceuticals
  • All other medications
  • Vitamins and dietary supplements
  • OTC medicines
  • Other complementary medicines
  • Industry Activities
  • Antibacterial, antibiotic and antitoxin
  • Vaccine
  • Vitamin product
  • Herbal drug
  • Ampoule, medicinal capsule, medicinal ointment and vial
  • Biotechnological pharmaceutical and medicinal products
  • Serum and blood serum
  • Diagnostic substance
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Federal funding for the Pharmaceutical Benefits Scheme
  • Population aged 50 and older
  • Health consciousness
  • Trade-weighted index

  • Current Performance
  • Weak performance
  • Manufacturing capacity cuts
  • Reliance on imports
  • Ongoing PBS changes
  • Chart: Revenue Growth

  • Industry Outlook
  • Long-term survival
  • Ongoing consolidation
  • Table: Pharmaceutical Product Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Pharmaceutical Product Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • General Hospitals
  • Pharmaceuticals Wholesaling
  • Pharmacies

  • Key Selling Industries
  • Adhesive Manufacturing
  • Cosmetics, Perfume and Toiletries Manufacturing
  • Packaging Services
  • Soap and Cleaning Compound Manufacturing

  • Products & Services
  • Benefit-paid pharmaceuticals
  • All other medications
  • Vitamins and dietary supplements
  • OTC medicines
  • Other complementary medicines
  • Chart: Pharmaceutical Product Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Wholesalers
  • Export markets
  • Hospitals and pharmacies
  • Other retailers
  • Chart: Major Market Segmentation for the Pharmaceutical Product Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Pharmaceutical Product Manufacturing

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Pharmaceutical Product Manufacturing Industry

  • Industry Globalization
    GlaxoSmithKline Holdings Pty Ltd, AstraZeneca Pty Limited, Pfizer Australia Holdings Pty Limited, Aspen Asia Pacific Pty Ltd, Merck Sharp & Dohme (Australia) Pty Limited, Mylan Australia Holding Pty Ltd,
  • Table: GlaxoSmithKline Holdings Pty Ltd - financial performance
  • Table: AstraZeneca Pty Limited - financial performance
  • Table: Pfizer Australia Holdings Pty Limited - financial performance
  • Table: Aspen Asia Pacific Pty Ltd - financial performance
  • Table: Merck Sharp & Dohme (Australia) Pty Limited - financial performance
  • Table: Mylan Australia Holding Pty Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Pharmaceutical Product Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Pharmaceutical Product Manufacturing Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Exports (2008-2022)
  • Imports (2008-2022)
  • Wages (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Biological Medicines
  • Biological medicines are those created by biological processes from living organisms as opposed to those that are chemically synthesised.
  • Biosimilars
  • Biosimilars are a biological medical product that is a copy of an original biologic product. They can be known as follow-on biologics.
  • Blockbuster Drugs
  • Products generating annual sales of $1.0 billion or more.
  • E-Detailing
  • Information-technology supported promotional activities.
  • Expanded And Accelerated Price Disclosure (Eapd)
  • Under EAPD all Formulary 2 drugs are treated the same way and a new brand will no longer be required to trigger price disclosure.
  • Over-The-Counter (Otc)
  • Refers to products that can be obtained from a pharmacy or chemist without a prescription.
  • Patent Cliff
  • Refers to the potential significant fall in revenue following the patent expiration of key products.
  • Pharmaceutical Benefits Scheme (Pbs)
  • The PBS is a Commonwealth Government program that reduces the cost of pharmaceuticals for consumers to a maximum co-payment via subsidising the additional cost.
  • Price Disclosure Reforms
  • These are designed to progressively reduce the price of those PBS medicines subject to competition.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Pharmaceutical Product Manufacturing market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

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    This report on Pharmaceutical Product Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Pharmaceutical Product Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Pharmaceutical Product Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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