The Medtech Hub Down Under

9th February 2016, MDDI Online  By Marie Thibault

Australia has an outsized reputation for exotic flora, cute koalas, and awe-inspiring beaches, but it is also a bright star in the medical technology industry.

The country actually outpaces the United States in terms of medtech sales per capita: $10.2 billion from 2012 to 2013 for its 23 million people, while U.S. revenue was approximately $110 billion in 2015 for a population of 319 million. The top three therapeutic areas for medtech companies Down Under are cardiovascular, anesthesia, and musculoskeletal, according to the trade group Medical Technology Association of Australia (MTAA).

Experts and executives attribute the success of this relatively young industry—MTAA notes nearly 40% of Oz’s medtech companies did not exist prior to 2000—to a mixture of its educated population, strong academic institutions, favorable regulatory and R&D environment, and government support.

Regulatory expert Arthur Brandwood, founder of Brandwood Biomedical and formerly a director with Australia’s regulator, the Therapeutic Goods Administration (TGA), notes the top notch and relatively streamlined clinical trials setting in the country.

“The standards of medical care and research are world class,” he wrote in an e-mail. Most medical centers are in well-populated cities, and “the clinical trial regulatory burden is very light touch . . . essentially equivalent to the low-risk device IDE process in the U.S.,” he added. Instead of requiring an ethics review for every trial site, Brandwood said one lead ethics review can clear all sites. “Trial costs can also be lower than sites in U.S. or Europe,” he wrote.

On top of that, Australia offers a generous R&D tax incentive, which entails a 45% refundable tax offset to firms generating less than $20 million in annual revenue and a nonrefundable 40% tax offset to other companies.

John Kelly, CEO of Atomo Diagnostics, a Sydney-based maker of a rapid diagnostic test platform for diseases including HIV and malaria, said that after factoring in the tax incentive, he estimates conducting R&D in Australia costs about one-third of the price of carrying it out in the United States. According to MTAA, the number of medical technology clinical trials in Australia climbed 19% in one year, to 570 trials in 2013.

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