The Times Australia
The Times Australia
.

Why doesn’t Australia make more medicines? Wouldn’t that fix drug shortages?

  • Written by Peter Coomber, PhD Candidate, Pharmaceutical Supply Chains, The University of Queensland

About 400 medicines[1] are in short supply in Australia. Of these, about 30 are categorised as critical[2]. These are ones with a life-threatening or serious impact on patients, and with no readily available substitutes.

Since 2024, there has been a nationwide shortage of sterile fluid[3]. This continues to affect[4] health care across Australia.

However, medicine shortages in Australia are not new. We know from past experience that six classes of medications[5] are the most likely to go short: antibiotics, anaesthesia and pain relief treatments, heart and blood pressure medications, hormonal medications, cancer treatments and epilepsy medications.

So, could we prevent medication shortages if Australia made more medicines[6]?

Why are there so many shortages?

Australia has a very small[7] pharmaceutical manufacturing industry. It mainly makes[8] vaccines and some generic medications (ones no longer protected by a patent). In fact, Australia imports 90%[9] of its medications[10].

Most raw ingredients are also imported, including the active pharmaceutical ingredient[11]. This is the ingredient that has a therapeutic effect, such as salbutamol to manage asthma or atorvastatin to lower cholesterol. Australia also imports the inactive ingredients known as excipients[12]. These include fillers, bulking agents and preservatives.

Then there are medication delivery devices (such as inhalers or syringes) and packaging (which has to be sterile) to source.

A shortage in one ingredient or component – in Australia or internationally – will affect the production and supply of the finished product. This can lead to shortages.

Often, there are limited sources (or a single source) for medication components. This makes supply chains[13] particularly vulnerable[14].

Australia is a small player, globally

Australia is a small market for pharmaceuticals[15], compared with other OECD countries.

So during a shortage of medications, raw materials or other components, suppliers prioritise larger and therefore more valuable markets.

Australia’s Pharmaceutical Benefits Scheme (PBS) has an underpinning pricing mechanism[16] to provide affordable medicines for Australians. But this also makes the market less attractive[17] to medication manufacturers.

Therefore, countries where markets are bigger, and offer larger profit margins, are more attractive. This restricts the type and range of medications offered to the Australian market, including when supplies are short.

Ampules of medicine on production line
Australia needs medicines, raw ingredients and sterile packaging, all of which can be in short supply. RGtimeline/Shutterstock[18]

So could ramping up local manufacture help?

The answer is maybe.

But developing Australia’s limited pharmaceutical manufacturing would take many years to reach a level and capacity for sustainable supply.

Increasing local manufacturing would address access to some medicines. However, domestic manufacturers also need access to raw ingredients. These could also be made locally.

For pharmaceutical manufacturing to be viable and profitable[19] in Australia there must be “economies of scale”.

Considerations include the availability of raw materials, production costs (including labour), access and availability of infrastructure and specialist facilities. To justify their investments, companies will ultimately need to sell enough product to cover these and other costs.

But Australian manufacturers struggle to achieve economies of scale due to the small domestic market. So they would need to export some of their products to supplement domestic sales.

To boost Australia’s pharmaceutical manufacturing industry, all states and territories would need a coordinated approach to planning and investment. This would also need bipartisan political support and a strategic long-term commitment.

What could we do in the short term?

Health authorities stockpiling medicines is the obvious short-term solution to Australian medication shortages. However, we’d need to carefully manage the stored medicines to ensure supply meets demand. We’d also need to make sure medicines are used before they expire. If not carefully managed, a stockpile risks unnecessary expense and waste.

Currently, state and territories manage the use of medications in their own hospitals. However, we could standardise medication use in hospitals nationally. With co-operation among states and territories this would allow manufacturers and suppliers to better plan production and distribution of medicines. Not only would this provide more certainty for suppliers, it would reduce the states and territories competing with each other for medicines in short supply.

We also need to review the pricing mechanism for medicines to make the Australian market more attractive for pharmaceutical imports. This would also help Australia move higher up the priority list when medicines are in short supply.

References

  1. ^ 400 medicines (apps.tga.gov.au)
  2. ^ about 30 are categorised as critical (apps.tga.gov.au)
  3. ^ shortage of sterile fluid (theconversation.com)
  4. ^ continues to affect (www.tga.gov.au)
  5. ^ six classes of medications (adpha.au)
  6. ^ made more medicines (ajp.com.au)
  7. ^ very small (www1.racgp.org.au)
  8. ^ mainly makes (www.medicinesaustralia.com.au)
  9. ^ imports 90% (sldinfo.com)
  10. ^ of its medications (parlinfo.aph.gov.au)
  11. ^ active pharmaceutical ingredient (www.cancer.gov)
  12. ^ inactive ingredients known as excipients (australianprescriber.tg.org.au)
  13. ^ supply chains (www.medicinesaustralia.com.au)
  14. ^ particularly vulnerable (ajp.com.au)
  15. ^ small market for pharmaceuticals (www.medicinesaustralia.com.au)
  16. ^ underpinning pricing mechanism (www.pbs.gov.au)
  17. ^ less attractive (theconversation.com)
  18. ^ RGtimeline/Shutterstock (www.shutterstock.com)
  19. ^ viable and profitable (www.medicinesaustralia.com.au)

Read more https://theconversation.com/why-doesnt-australia-make-more-medicines-wouldnt-that-fix-drug-shortages-255766

Should YouTube be included in Australia’s social media ban for kids under 16? We asked 5 experts

The Austalian government has confirmed video-sharing platform YouTube will be included[1] in the upcoming so...

Times Magazine

Why Social Media Marketing Matters for Businesses in Australia

Today social media is a big part of daily life. All over Australia people use Facebook, Instagram, TikTok , LinkedIn and Twitter to stay connected, share updates and find new ideas. For businesses this means a great chance to reach new customers and...

Building an AI-First Culture in Your Company

AI isn't just something to think about anymore - it's becoming part of how we live and work, whether we like it or not. At the office, it definitely helps us move faster. But here's the thing: just using tools like ChatGPT or plugging AI into your wo...

Data Management Isn't Just About Tech—Here’s Why It’s a Human Problem Too

Photo by Kevin Kuby Manuel O. Diaz Jr.We live in a world drowning in data. Every click, swipe, medical scan, and financial transaction generates information, so much that managing it all has become one of the biggest challenges of our digital age. Bu...

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

The Times Features

Jetstar announces first ever Brisbane to Rarotonga flights with launch fares from just $249^ one-way

Jetstar will start operating direct flights between Brisbane and Rarotonga, the stunning capital island of the Cook Islands, in May 2026, with launch sale fares available today...

Introducing the SE 2 and Mini hair dryers from Laifen

The Mane Attractions for Professional Styling at Home Without the Price Tag Fast, flawless hair is now possible with the launch of Laifen’s two professional quality hair dryers th...

Home Gym Recovery Routines: What Pro Athletes Do After Workouts

Training is only half the equation. What you do after your workout has just as much impact on your progress, performance, and long-term health. Professional athletes know this, w...

Flipping vs. Holding: Which Investment Strategy Is Right for You?

Are you wondering whether flipping a property or holding onto it is the better investment strategy? The answer isn’t one-size-fits-all. Both strategies have distinct advantages a...

Why Everyone's Talking About Sea Moss - And Should You Try It Too?

Sea moss - a humble marine plant that’s been used for centuries - is making a major comeback in modern wellness circles. And it’s not just a trend. With growing interest from athle...

A Guide to Smarter Real Estate Accounting: What You Might Be Overlooking

Real estate accounting can be a complex terrain, even for experienced investors and property managers. From tracking rental income to managing property expenses, the financial in...