Melbourne Herald Sun, Friday 8th October 2010
Automotive is no longer king of Australia’s high-tech exports. You could say their leadership has been nobbled - today’s big winner is pharmaceuticals.
Yes, we export more pills and potions than Fords and Holdens. In fact IBISWorld researchers believe that in the coming year our sales will be $4.3 billion. That’s nearly half of all exports that haven’t been dug up or grown.
It’s interesting that although major markets, as you’d expect, are New Zealand, South Korea and the US, we also have a burgeoning trade with China and India - who are no pygmies in their own abilities to make and export medicines.
The secret is that we have a good grasp at the leading edge of medicines. Drugs like the influenza cure Relenza, invented by the cooperation between scientists at CSIRO, Monash University and ANU. Earlier this year the world had a scare over swine flu and all of a sudden governments around the globe were stocking tonnes of the only reliable remedy - Relenza.
Dr Fiona Wood made history with her ReCell spray-on skin. The dividends have been coming in, like last month’s announcement of a $2 million contract with the US Army.
But let me ask you a question. Where is the biggest producer of opium poppies in the world? Burma? Afghanistan? Nope. Tasmania.
Yes, Tasmania is the world's real Golden Triangle. It produces 51 per cent of the world's morphine concentrate, grown by 1000 licensed farmers. And then it is manufactured in the world's biggest opium factories - in Port Fairy, Victoria.
Of course, this information is not shocking news because it's all strictly legal - the opiates are used for medicines like codeine, thebaine and morphine. The only unauthorised junkies were a mob of wallabies who jumped a fence, got stoned, and made crop circles. (Cross my heart, it's the truth!)
Big pharma, however, is facing problems for the future. Some of the most lucrative patents in history have recently expired or will soon do so. Asthma drug Advair, antibiotic Levaquin, cholesterol drug Lipitor, and the invention that made Britain great, Viagra, are all expected to go off patent this year. This then makes them open game for the smaller generic manufacturers.
A blockbuster drug can also explode. Like Vioxx, which cost Merck & Co over $5 billion in legal damages, or the newly emerging case from users of Glaxo’s diabetic drug Avandia which is also being accused of causing heart problems.
Added to this, the government's Pharmaceutical Benefits Scheme has locked down the prices of many drugs and ensured that Australia has some of the lowest prices in the developed world. Good news for consumers but not for profits.
But as always it's swings and roundabouts. With a greying population about to be hit by a flood of baby boomers, the pharmacists' tills will ring ever louder for some time to come.
The companies and universities are not standing still, either. Last month the Australian Bureau of Statistics reported that this country’s research investment has just topped $1 billion. The hunt for new cures is relentless.
So the 40,000 employees in this $18 billion industry can regard their jobs as being pretty secure for some time to come.
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