Medicines Australia and Research Australia weight in on key productivity pillars: Economic reform roundtable

Medicines Australia and Research Australia have made strong cases to the Treasury’s Economic Reform Roundtable, calling for national reforms and strategic investments across health, research, and innovation to drive the nation’s productivity and economic growth.

Treasurer Jim Chalmers will host an Economic Reform Roundtable from 19–21 August, bringing together stakeholders and drawing on five inquiries from the Productivity Commission to help shape the government’s reform priorities – with productivity, resilience and budget sustainability all in the spotlight.

“Investing in health and medical research and innovation is not just good for our health – it is smart economic policy,” said Nadia Levin, CEO of Research Australia. “Every dollar invested delivers at least four dollars in return to the Australian economy.”

Research Australia’s submission aligns with the government’s five-pillar productivity agenda. But it warns that realising this potential requires coordinated national action.

Key recommendations include a National Health and Medical Research Strategy, recognising health innovation as a critical sovereign capability, closing translational funding gaps, developing a workforce strategy for Australia’s talent pipeline, and focusing on early intervention and prevention.

Medicines Australia’s submission zeroes in on long-overdue Health Technology Assessment (HTA) reforms to address the unacceptable lag between a medicine’s approval by the Therapeutic Goods Administration (TGA) and its listing on the Pharmaceutical Benefits Scheme (PBS). That delay currently averages 466 days – well above the OECD average.

Backing this position, the McKell Institute estimates that poor health-related early retirement reduces the economy by 2.5% or $65 billion in 2024 and finds “effective health programs including medicines can reduce the cost of early retirement by up to 20%.”

Further weight comes from Columbia University’s Frank Lichtenberg, whose research shows that without expanded access to PBS medicines between 1994 and 2011, Australia’s hospital expenditure would have been $6 billion higher each year by 2019, with that figure projected to rise to $7.4 billion in 2025.

The message is also echoed in the 2024 Productivity Commission report, which notes that “more timely approval processes for pharmaceuticals and other medical technologies would help ensure that the diffusion of new treatments remains a positive contributor to productivity growth.”

Medicines Australia has also called on the government to prioritise the National One Stop Shop (NOSS) implementation, committed to in the budget, to cut red tape and drive efficiency in clinical trials.

“We are urging the Government to elevate health and medical research as a key productivity lever,” Levin emphasised. “A strong and sustainable health innovation system will help solve some of our biggest challenges, from rising costs of care to workforce pressures and climate-related health risks.”

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