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

Pharmaceutical spending is driven by demand and new product launches, says BMI.

Australia’s pharmaceutical market is projected to reach $24.5b (AU$33.9b) by 2030, with a compound annual growth rate (CAGR) of 6.5% in local currency terms and 8.6% in US dollar terms.

Demand and new product launches drove the growth of the market, which is expected to heighten spending despite ongoing cost constraints from the government, said BMI’s revised outlook.

The revised outlook follows the Pharmaceutical Benefits Scheme (PBS) report, highlighting that prescription medicine expenditure increased from $12.5b (AU$19.2b) in 2024 to $13.5b (AU$20.7b) in 2025.

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

PBS expenditure also reached $12.7b (AU$19.0b) in 2025, up from $11.8b (AU$17.7b) in 2024, with a 7.3% year-on-year growth in local currency terms, signalling an expanding market.

The patented medicine market is also projected to reach $17.8b (AU$24.5b) by 2030, with a CAGR of 6.7% in local currency terms and 8.7% in US dollar terms.

Nine hundred and forty-nine medicines were listed in the PBS as of 30 June 2025, up from 930 listings in 2024, according to the report.

The government also subsidised the Wegovy (semaglutide) weight-loss drug for patients with severe obesity and a history of stroke or heart attack, significantly reducing its cost for eligible Australians.

F1 drugs face statutory price cuts at the fifth, tenth and fifteenth anniversaries of listing, challenging the profitability and competitiveness of manufacturers.

A one-off 25% price cut also occurs once a medicine gains a generic or biosimilar competitor, moving it from the F1 to the F2 category.

Innovative drugs require an average of 2.2 submissions to the Pharmaceutical Benefits Advisory Committee before receiving positive recommendations.

Australia also launched its first health technology assessment in nearly 30 years, aiming to modernise how medicines are evaluated, with the report released in August 2025.

1 US$ = 1.44 AU$