Drug Companies to Expand Overseas

Although the Australian pharmaceutical industry remains strong, pharmaceutical companies are looking into expanding overseas and to adapt to more government restrictions.

The Australian operations of Pfizer, Eli Lilly, GlaxoSmithKline and MSD have confirmed that they have let go of hundreds of jobs in 2012. The multinational pharmaceutical companies said the cuts were implemented to address the increasing health costs and keep the companies competitive.

Blockbuster drugs are also facing tougher competition as many of them are scheduled to become off-patent, which means other pharmaceutical companies can come up with generic counterparts.

Medicines Australia chief executive Brendan Shaw said that the Pharmaceutical Benefits Scheme is seeing an increase in annual cost from $173 million to $9 billion. The scheme is a government program that subsidizes cost of medicines in the country.

Despite the soaring costs, patient contributions have remained the same at about 0.1 percent of the GDP.

IMS Health, meanwhile, said that global spending on medicines may reach as much as $1 trillion in 2013. The trend would be driven by countries like India, China, and Thailand. Shaw said growing economies mean more middle-class families would require better healthcare products and services.

AstraZeneca has already announced the expansion of its Sydney manufacturing plant to meet the demand for asthma medicines in China.