Australia pharma to reach $24.5b by 2030 despite ‘anniversary’ price cuts

Drug spending is driven by demand and new product launches, BMI said.

The Australian pharmaceutical market is expected to reach US$24.5b (AU$33.9b) by 2030, with a compound annual growth rate (CAGR) of 6.5% in local currency and 8.6% in US dollars.

BMI’s revised outlook said market growth is driven by demand and new product launches, with market spending expected to increase despite ongoing government cost restraints.

The revised outlook follows a Pharmaceutical Benefits Scheme (PBS) report highlighting prescription drug spending increasing from US$12.5b (AU$19.2b) in 2024 to US$13.5b (AU$20.7b) in 2025.

This prompted BMI to adjust the market size in 2025 from $16.2b (AU$24.6b) to approximately $15.9b (AU$24.2b).

PBS spending will also increase from US$11.8b (AU$17.7b) in 2024 to US$12.7b (AU$19.0b) in 2025, a year-on-year increase of 7.3% in local currency terms, indicating an expanding market.

The patented medicines market is expected to reach US$17.8b (AU$24.5b) by 2030, growing at a CAGR of 6.7% in local currency terms and 8.7% in US dollar terms.

The report said that as of June 30, 2025, PBS listed 949 drugs, up from 930 drugs in 2024.

The government is also subsidizing the Wegovy (semaglutide) weight loss drug for patients who are severely obese and have a history of stroke or heart disease, significantly reducing the cost for eligible Australians.

F1 drugs face statutory price reductions on their fifth, tenth and fifteenth anniversaries, posing challenges to manufacturers’ profitability and competitiveness.

Once a drug acquires a generic or biosimilar competitor, there is a one-time price reduction of 25%, moving it from the F1 category to the F2 category.

Innovative medicines require an average of 2.2 applications to the Pharmaceutical Benefits Advisory Committee to receive a positive recommendation.

Australia has also launched its first health technology assessment in nearly 30 years, aiming to modernize the way medicines are evaluated, with the report due to be released in August 2025.

1 US dollar = 1.44 Australian dollars