Similar to numerous sectors, the medical technology (MedTech) industry is encountering both challenges and opportunities at present. The COVID-19 pandemic has heightened the importance of healthcare in the perception of the public and policymakers.
While there are still hurdles for our community to navigate due to the pandemic's repercussions, there are also significant opportunities that have arisen.
AusBio Tech states that “Australia is positioned to emerge as a global frontrunner in medical technology, backed by robust expertise infields like genomic medicine, digital healthcare, and precision medicine”.
In 2021/22, the total contribution of the MedTech industry to the gross domestic product (GDP), encompassing both direct and indirect contributions, amounted to $5.4 billion. This includes a direct GDP contribution from the MedTech industry itself valued at $4.1 billion, along with an indirect GDP contribution of $1.4 billion.
The indirect GDP contribution refers to the value added by suppliers to the MedTech industry, which in turn generates additional value within those supplying sectors.
Statista predicts a Compound Annual Growth Rate (CAGR) of 6.16% between 2024 and 2028, reaching a market volume of USD $10.11 billion by 2028 (Statista Market Forecast)
Australia's healthcare expenditure per capita stands significantly higher compared to its counterparts in the Organisation for Economic Co-operation and Development (OECD).
In 2019, healthcare spending represented 10.2% of the total gross domestic product (GDP), positioning Australia at the 11th spot out of 38 OECD countries, surpassing the median of 8.05% GDP.
As a percentage of GDP, Australia's healthcare expenditure exceeds that of the United Kingdom (9.9%) but falls below that of the United States (16.7%), Japan (11.0%), and Canada (11.0%).
Despite this, Australia's life expectancy outperforms these countries except for Japan, which ranks first in the OECD. Notably, Japan allocates less expenditure per capita compared to Australia.
Future of MedTech in Australia
The evolution of innovative MedTech solutions is empowering patients to lead more enriched lives. The emergence of personalised medicine is facilitating the creation of tailored and flexible MedTech solutions. According to Mike Wilson, OAM, CEO of the Juvenile Diabetes Research Foundation,"MedTech is the key to patient self-management."
Between 2010 and 2020, the number of patents in the Australian MedTech sector has seen a compound annual growth rate of 7%. During this period, the proportion of global patents held by Australia in the MedTech field has increased from 4.5% to 6%.
Australia holds the 14th position on the International IP Index 2023, which assesses the intellectual property (IP) frameworks across 55 global economies. With an overall score of 80.68%, Australia also ranks 4th in the Asia region.
There is ample room for innovation within the MedTech sector, capitalising on Australia's collaborative approach and renowned medical research capabilities.
However, the path for MedTech innovations to market fruitionis lengthy. Success in this field demands tailored support tailored to each company's stage in the innovation and commercialisation process.
Unlike many other industries, MedTech requires substantial upfront investment before yielding potential financial returns.
A common challenge for Australian researchers is navigating the funding "valley of death" before progressing to clinical trials and securing funding. Consequently, numerous small MedTech firms operate at a significant financial loss.
Digital health technologies have undergone significant transformation within Australia's healthcare system in recent years. These innovations play a crucial role in enhancing health outcomes and fortifying data systems across the healthcare sector, encompassing mobile health, telehealth, and IT systems. Notably, digital health solutions tailored for hospital management have demonstrated efficacy in streamlining operations and driving efficiencies.
Australia has witnessed notable advancements in digital health services, including the implementation of electronic prescriptions, Medicare online services, COVID-19 digital certificates, and digital health records.
However, the sector also faces identified gaps, which have been addressed by initiatives such as Australia’s National Digital Health Initiative (ANDHealth). ANDHealth has played a pivotal role in supporting over 400 companies in developing, commercialising, and implementing digital health technologies, thereby generating value for both the healthcare system and the economy.
The integration of electronic medical records, patient monitoring devices, mobile apps, and analytics presents a myriad of risks and opportunities for the sector.
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