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INDUSTRY & RESEARCH
Poor results
A new report found Australia ’ s health and medical research hasn ’ t produce significant results over 20 years .
By Tim Dodd
Australia ’ s $ 100bn investment in health and medical research across the past two decades has failed to produce a strong local biopharmaceutical industry according to a new report , raising questions about whether the investment can be justified on a value for money basis .
The Australian Medical Precincts Report , by research and higher education consultant Thomas Barlow , says the real achievements of Australian research have “ not yet translated to a profitable and self-sustaining Australian biopharmaceutical industry ”. “ With $ 8bn now spent each year on health and medical R & D , we have surprisingly few R & D-based life science companies that are : ( a ) profitable , ( b ) still operating in Australia , and ( c ) predominantly Australian-owned ,” the report says .
“ We seem better placed to sell companies rather than products , and once sold we seem to lose the self-reinforcing advantages that come from keeping capabilities onshore .”
In his report Dr Barlow points to important Australian discoveries that have high commercial value but are now largely owned by overseas based companies .
These include the human papillomavirus vaccine Gardasil , the leukaemia treatment Venetoclax , melanoma treatment Viralytics , and skin repair treatment Elastagen .
The report also notes that if we discount Australia ’ s one pharmaceutical giant CSL ( which is the former government-owned Commonwealth Serum Laboratories ) then Australia ’ s ASX-listed health companies are nearly all in the healthcare equipment and services sector , not in the research-driven pharmaceuticals and biotechnology area .
“ We have service companies , not biotechs ,” Dr Barlow said .
The report says Australia has had many companies since the 1980s that have tried to commercialise new healthcare technologies and new biopharmaceutical products but they have met with little success .
If CSL is removed , the remaining nearly 90 pharmaceutical , biotechnology and life sciences companies on the ASX posted a combined loss of nearly $ 1bn in 2021 .
“ After 40 years , one might have expected a different level of maturity , or at least a greater proportion of mature and profitable companies ,” the report says .
While it acknowledges that there are commercial success stories – and noncommercial benefits in quality of life , lives saved and broader economic and social returns – the report says there are strong reasons for universities , medical research institutes and hospitals to think carefully about the value of their research , what their role is and how they work with local partners .
The report compares 31 medical research precincts throughout Australia – areas where universities , hospitals and medical research institutes are located – and analyses which factors account for their relative success .
It concludes that Parkville – which includes the University of Melbourne and several hospitals and research institutes – is the largest and the most productive .
Parkville has the most companies in the pharmaceutical , biotechnology and life sciences sector , and is the only precinct with significant revenues from such companies .
Even without the advantage the precinct has from housing CSL , “ the organisations in Parkville appear to have self-organised in ways that are mutually beneficial ”, the report says .
Parkville ’ s scale , geographic concentration and focus is important , but Dr Barlow believes there is another factor .
“ The key thing which differentiates Parkville is its hospitals , this concentration of clinical activity ,” he said .
He advised all medical research precincts to co-ordinate so the partners were aligned in their areas of focus .
“ You will collectively be more likely to have a precinct which is nationally and internationally visible in your areas of choice ,” he said . ■
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