The Australian Government is manufacturing a new future for our nation. Manufacturing is critical to a modern Australian economy—a key part of almost every supply chain that adds significant value to all sectors. The Modern Manufacturing Strategy (MMS) is led by industry, for industry, to help our manufacturers scale-up, become more competitive and build more resilient supply chains. The Australian Government will be a strategic investor in this, notably through the 6 national manufacturing priority sectors. Prioritising these sectors will drive productivity and create jobs for Australians, both now and for generations to come.
On 1 October 2020, the Australian Government announced a $1.5 billion investment in the MMS to help Australian manufacturers become more competitive, resilient and build scale in the global market. The 6 key areas of focus are:
- Resources Technology & Critical Minerals Processing
- Food & Beverage
- Medical products
- Recycling & Clean Energy
Road maps have been developed with industry to set out plans for both industry and Government to strengthen Australia’s manufacturing capability. The road maps have been led by industry taskforces to identify and set a future vision for the priority areas with clear goals, opportunities and actions over the next 2, 5 and 10 years. This road map is designed to be dynamic—it will evolve with the industry and with other external forces such as economic and global trends as they affect the industry. As the MMS is implemented, we will continue to work with industry to ensure the road map evolves over its life, to take account of emerging opportunities and actions to support the sector to scale-up, become increasingly competitive and for businesses to integrate their commercial solutions with global supply chains and markets. View Road map in context for more details on the process.
Through the MMS, the Government wants to support projects from industry that will transform manufacturing in Australia. The medical products road map will help to inform the investment decisions that both Government and industry make across the next 10 years, in particular, by supporting projects that will:
- harness and build on the sector’s strengths and advantages
- provide innovative solutions to overcome constraints that limit value creation and may prevent the sector achieving its full potential
- transform the sector by growing a high-value, reputable and dynamic medical product manufacturing industry.
Getting the economic conditions right
The MMS outlines the whole-of-government agenda to help grow Australian manufacturing and ensure manufacturers can harness global opportunities and achieve scale. Getting the economic conditions right is the first pillar of the Strategy, noting affordable and reliable energy, lower taxes, industrial relations, training and skills, and cutting red tape are key determinants for the success of local manufacturing businesses.
The Australian Government is getting the economic conditions right for manufacturers, paving the way for growth and improved competitiveness in all sectors. Manufacturers need a pipeline of skilled workers as they transform and scale. The Government is investing $7 billion this financial year to keep apprentices in jobs, to help jobseekers re-skill and to promote vocational training. We are working to ensure that we are creating the jobs of the future and that we have a pipeline of skilled workers to support new and emerging industries, including in manufacturing. The Government’s reforms to higher education will boost the number of graduates in areas of employment growth, including STEM.
A gas-fired recovery will ensure Australian gas is working for local businesses and manufacturers, with a 13-point plan and a $49.8 million investment to unlock supply. This complements the Government’s initiatives to reduce electricity prices, boost liquid fuel security and invest in low emissions energy technology through Australia’s Technology Investment Roadmap.
The Government is harnessing opportunities from emerging technologies and building business digital capability, including growing Australian business’ cyber security resilience. Work to implement a Simplified Trade System will support Australia’s exporters and importers to invest and grow local jobs by making it easier for businesses to integrate into global supply chains.
The Government is focused on making and sustaining jobs through the JobMaker scheme. This will unlock investment, and expand the productive capacity of the nation through expanding the instant asset write-off and temporarily allowing businesses with a turnover of less than $5 billion to offset tax losses against previous profits.
Why medical products manufacturing?
Quality medical products are at the centre of a healthy society. They can also be the centrepiece of a dynamic economy based on translating smart ideas into globally competitive manufactured products. Medical products make a significant contribution to Australia’s economic prosperity. The sector is responsible for some of Australia’s most innovative commercial successes. Australian medical products making a global impact include the cochlear implant, green whistle and cervical cancer vaccine.
Medical product manufacturing covers businesses and enterprises that develop regulated human and animal medical products. Medical products also include associated activities with a clear health focus, such as digital health equipment and applications. Manufacturing includes pre-production activities such as R&D, design and logistics, and post-production activities such as distribution, sales and services.
The ultimate purpose of any medical product is supporting patient health. The development pathway represents how ideas are commercialised and produced, including commercial opportunities in pre and post production.
Sources: Abridged from MTPConnect, Medical Technology, Biotechnology & Pharmaceutical Sector Competitiveness Plan, 2020, p20–21 and CSIRO, Medical Technologies and Pharmaceuticals: A Roadmap for unlocking future growth opportunities in Australia, 2017, p4.
The medical products manufacturing pathway typically follows these steps:
- Research is conducted (Australian and/or international)
- Pre-clinical development
- Clinical development (often broken down into phases)
- Market access and distribution
- Marketing, sales and services
Digital applications may not follow any of these steps, i.e. they could go from research straight to production.
This pathway can vary depending on the product being developed. For pharmaceuticals, it can take well over 10 years to get to market, cost billions of dollars, and involve numerous safety and efficacy trials. In contrast, a digital application that relates to general health and wellbeing, and involves non-invasive monitoring, might be unregulated. These applications in some cases may skip clinical trials altogether and follow a more iterative process similar to software development.
Companies can capture value at all stages of the manufacturing pathway. Much of this value is at either end of the manufacturing ‘smile curve’: in the intellectual property value developed in the research and development stage, to how the product is integrated in the service provided for the clinician or patient. The sophisticated nature of many medical products can also lead to complex production activities with significant opportunities to capture value. For example, drugs that treat rare diseases can require expensive and advanced technologies to manufacture. The taskforce emphasised that companies should focus on capturing this value, regardless of where the activity occurs in the manufacturing pathway.
Clinical trials are of particular importance to medical products. The process of running clinical trials is estimated to be worth $1 billion to the Australian economy annually. This can also benefit manufacturing as an intermediate step to large-scale production of medical products. Final production is often ‘anchored’ to the location where the late stages of clinical development occur.
1 Software and digital solutions can be divided into two main categories: ‘health’ and ‘medical’ applications. Health applications do not require Therapeutic Goods Administration (TGA) approvals, relate to general health and wellbeing, and involve non-invasive monitoring. A medical application will be TGA approved. Medical applications usually make certain diagnostic or treatment claims, and may be classified as medical devices. ↵