The peak body’s new white paper calls for PBS pricing reform, earlier shortage detection, and streamlined regulation to strengthen Australia's medicine supply resilience.
Australia should shift its focus from reacting to medicine shortages to preventing them before they affect patients, according to a new white paper from the Generic and Biosimilar Medicines Association.
The GBMA says domestic policy reform is needed urgently to strengthen the resilience of the nation’s medicine supply.
The white paper, No Patient Left Waiting: A Reform Roadmap for Medicine Supply Resilience, said Australia could not avoid every global manufacturing or supply chain disruption but could reduce its vulnerability by reforming Pharmaceutical Benefits Scheme (PBS) pricing, improving early identification of supply risks, and removing unnecessary regulatory barriers.
Developed following the GBMA’s inaugural Medicines Supply Resilience Summit earlier this year, the white paper drew on consultation with patient groups, clinicians, pharmacists, medicines manufacturers, and policymakers.
It concluded Australia’s current approach is largely reactive, relying on emergency imports, stockholding requirements, and shortage notifications once supply disruptions were already affecting patient care.
GBMA independent chair Professor Jane Halton AO PSM said Australia had built important systems for managing shortages after they emerged, but the next phase of reform needed to focus on preventing shortages before they reached patients.
“The next stage of reform must focus on prevention: addressing the market, pricing, stockholding and regulatory settings that can make Australia more vulnerable, before a shortage reaches patients,” she said.
“Affordability, availability and resilience must be considered together. A medicine is only accessible if it remains available to the patient who needs it.”
The report highlighted Australia’s dependence on imported medicines as a key structural vulnerability.
More than 90% of prescription medicines used in Australia are imported, exposing the country to manufacturing disruptions, freight constraints, and international competition for limited supply.
At the same time, generic and biosimilar medicines account for more than 70% of PBS prescriptions while representing less than 30% of government expenditure on PBS medicines, making the sector critical to both affordability and supply resilience.
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The white paper proposed three broad areas for reform. The first was strengthening long-term PBS sustainability through a review of floor-price settings for low-cost medicines, introducing targeted indexation to better reflect rising manufacturing and supply costs, and ensuring minimum stockholding requirements are proportionate and based on evidence rather than applied broadly across products.
The second focused on earlier identification and management of shortages. The GBMA recommended establishing a formal partnership between government, the Therapeutic Goods Administration (TGA), and industry to support earlier coordination when supply risks emerged.
It also called for the TGA’s Medicine Shortages Database to be redesigned so shortages were grouped by active ingredient rather than sponsor, with separate information for patients, pharmacists and prescribers, alongside guidance on appropriate alternatives where substitution was clinically appropriate.
The third pillar was regulatory reform. The association wanted greater use of reliance and recognition pathways that allowed Australia to leverage assessments by trusted overseas regulators, faster approval of manufacturing and packaging changes that support continuity of supply, and a more predictable section 19A emergency import pathway that remains a last-resort mechanism rather than becoming routine.
The report said current policy settings could unintentionally undermine medicine supply by making Australia a less attractive market for manufacturers.
It warned that ongoing price compression, rising production costs and increasing reliance on a smaller number of suppliers risked reducing competition and leaving the health system more vulnerable when global disruptions occurred.
GBMA chief executive Nikki Lorenz said the recommendations were designed to complement work already undertaken by the federal government, the TGA, and healthcare stakeholders.
“This is not about choosing between affordable medicines and reliable supply,” she said.
“It is about creating settings that deliver both, and reducing the patient, workforce and system costs that arise when action occurs only after a shortage is already affecting care.”
According to the white paper, the reforms would reduce treatment disruptions and uncertainty for patients, decrease the time clinicians and pharmacists spend sourcing alternative medicines, lower emergency response costs for government and provide more predictable market conditions for medicine suppliers, ultimately strengthening the resilience of Australia’s medicines system.
“Australia needs a medicines supply system that is affordable, reliable and resilient. At present, those objectives are not sufficiently connected. Policies that achieve low prices but weaken market participation can ultimately reduce patient access and increase whole-of-system costs,” the report concluded.
“Covid-19, global conflict, geopolitical tensions, energy shocks and inflation have all reinforced the same lesson: Australia cannot control global supply volatility, but it can choose whether domestic settings make the country more or less resilient when volatility occurs.
“The reform package in this paper is practical and proportionate. It recognises the importance of PBS affordability, but affordability cannot be separated from continuity of supply.
“It recognises the role of minimum stockholding, but stockholding must be risk-based, evidence-led and assessed against its full cost. It recognises the importance of communication and emergency pathways, but more information and more section 19A activity are not substitutes for a sustainable medicines market.”
Read the full white paper here.
