Australia’s pharmaceutical market is forecast to reach $24.5 billion (AU$33.9 billion) by 2030, growing at a compound annual growth rate (CAGR) of 6.5% in local currency and 8.6% in US dollar terms, according to Healthcare Asia Magazine.
Market growth is being driven by rising demand and new product launches, which are expected to increase overall spending despite ongoing government cost-containment measures, according to BMI’s revised outlook.
The update follows the latest Pharmaceutical Benefits Scheme (PBS) report, which showed prescription medicine spending rising from $12.5 billion (AU$19.2 billion) in 2024 to $13.5 billion (AU$20.7 billion) in 2025. As a result, BMI adjusted its 2025 market estimate to approximately $15.9 billion (AU$24.2 billion), down slightly from its previous forecast of $16.2 billion (AU$24.6 billion).
PBS expenditure also increased to $12.7 billion (AU$19.0 billion) in 2025, up from $11.8 billion (AU$17.7 billion) in 2024, representing 7.3% year-over-year growth in local currency and signaling continued market expansion.
The patented medicines segment is projected to reach $17.8 billion (AU$24.5 billion) by 2030, with a CAGR of 6.7% in local currency and 8.7% in US dollar terms.
As of June 30, 2025, 949 medicines were listed on the PBS, up from 930 in 2024. The government has also expanded subsidies for Wegovy (semaglutide) for patients with severe obesity and a history of stroke or heart attack, significantly lowering costs for eligible Australians.
Under PBS rules, F1 medicines are subject to statutory price reductions at the fifth, tenth, and fifteenth anniversaries of listing, placing pressure on manufacturer profitability. In addition, a one-time 25% price cut is applied once a generic or biosimilar enters the market, moving the drug from the F1 to the F2 category.
Innovative medicines require an average of 2.2 submissions to the Pharmaceutical Benefits Advisory Committee before receiving a positive recommendation. Australia has also introduced its first health technology assessment reform in nearly 30 years, with the final report released in August 2025, aimed at modernizing how medicines are evaluated, according to Healthcare Asia Magazine.