Australia Should Be More Like Bangladesh
Australia claims to have one of the best healthcare systems in the world, a claim which, judging purely by life expectancy, seems to be true. All the same, I think we should be more like Bangladesh. I don’t mean this in a global sense, I know far too little about Bangladesh to make sweeping generalisations like that, but in terms of health care one thing Bangladesh does way better than us is avoiding medicine shortages.
The reason I bring this up is that this is a national security issue, and one at that which is far more immediate and deadly than hypothetical submarines.
Australia imports 90% of its medicines. Because of this, trade wars could lead to more Australians deaths than any physical wars have recently, unless our medical supply chains are resilient enough (and our government is able to respond appropriately).
This is not just a Trump-related issue; Australia has suffered chronic medicine shortages these past few years, with just under 400 medicines currently in limited supply or unavailable, and a further 85 with anticipated shortages. Of these 400, 31 are “critical” – a category meaning that the consequences could be serious or life-threatening, and that there is no readily available substitute. How did we get here?
During the height of the pandemic, the Institute for Integrated Economic Research released a scathing report. It is beyond the scope of this article to list all the ways in which our health system is, to put it politely, suboptimal. It is worth noting however, that the report identifies a general move towards a reactive, “just in time”, short-term approach to healthcare as being one of the root causes of many of our problems. It’s worth pointing out that “just in time” can only work for businesses where nobody dies if it doesn’t arrive on time. Furthermore, State healthcare systems are poorly connected to each other, a matter complicated by an unclear division of responsibility between the State and Federal levels.
This drive for cost efficiency has reduced the “supply” of healthcare. This is at a time when demand is rising enormously. The Baby Boomer generation is getting older and sicker, but also our world is increasingly littered with toxic chemicals and poor lifestyle choices. Why Australia is getting sicker as a country is again beyond the scope of this article, but suffice to say that demand for healthcare is rising faster than population growth. This means a more precarious health system, before we even consider where we get medicine from.
As the report put it: “The principle of “equity of access to healthcare for all Australians” has slowly unravelled as inequity more generally has increased across Australian society over recent decades. This decline was not the result of one single policy failure or event, rather a gradual disintegration of Australia’s social contract as the influence of free-market ideology seeped into every aspect of our lives”
Although none of this is the result of a single policy (making it harder to solve), one example the report gives of a policy that led to our current situation is the PBS Reform 2007, passed in the dying days of the Howard Government. The Pharmaceutical benefits Scheme is how the government subsidises medicines. This reform put in place mandatory price reductions on generic medicines. The pressure this placed on manufacturers forced a lot of the industry to move overseas, leading to short term savings that came at the cost of our resilience.
The report gives a damning example of the decline of local pharmaceutical manufacturing:
“Australia grows around one-third of the worlds opium poppies used to produce morphine, codeine, buprenorphine, and oxycodone that are familiar pain-killers to most Australians. Australian grown poppies are refined into APIs that are then flown overseas for final formulation and packaging. For example, a10mg morphine ampoule used by clinicians is packaged overseas and then returned to Australia by air. These ampoules were in critical short supply during the pandemic as a result of the contraction of air freight during the COVID-19 pandemic.”
The Joint External Evaluation of the WHO really puts it into perspective: “All medical countermeasures held in the NMS [National Medical Stockpile] are manufactured overseas. Laboratory supplies and equipment are also produced offshore. Medical countermeasures cannot be procured ‘just in time’ within normal emergency (short) time frames because of manufacturing timelines, global market pressures and the complexity of the global supply chain.”
Given all the above, I don’t think it should be controversial to think that Australia should have some level of sovereign capability in pharmaceutical manufacturing. It may sound nationalist to some, but Australia’s sovereignty cannot be sacrificed to the fetish of the free market. This is what I mean by an issue of national security – if in a crisis Australia has no access to medications, how fragile is our stability and wellbeing as a country?
Now let’s turn to Bangladesh. Remember how Australia imports 90% of it’s medicine? Bangladesh imports just 2%. It can easily be argued that this is a hugely unfair comparison, because Bangladesh has an enormous population allowing for such large industries. It also exports to nearly the entire world these days, which obviously allows for a greater economy of scale.
That isn’t to say that we can’t learn from them though. Their world-leading pharmaceutical industry‘s growth began with the 1982 Drug Control Ordinance, which banned the import of drugs that could be manufactured locally and made it mandatory for manufacturers to produce drugs listed by the authorities.
However, an important first step would just be to build serious national medicine stockpiles, and to understand the supply chain vulnerabilities we’re exposed to. A few years ago the U.S. (our main supplier of medicines) realised that most of their pharmaceutical products were being made with Chinese components. Australia needs to conduct a similar analysis.
Labor’s election campaign talked so much about Medicare that you’d almost think it didn’t already exist. To kill three birds with one stone, Albo could spend this second term of government building our sovereign pharmaceutical capabilities: in this way he would be improving our national security, improving our health services, and delivering that Future Made in Australia Labor’s so proud of.
