Global trade system fails Australia on medicines, need for local production capacity

May 27, 2024: Australia's Therapeutic Goods Administration (TGA) lists 423 medicines in short supply to the Australian people. Twenty of these are at critically low levels, including medicines such as blood thinners, antibiotics and menopause hormone replacement therapy (HRT) patches.

These shortages were apparent before the COVID-19 pandemic but it was the pandemic which provoked some serious discussion.

In July 2023 a Medicines Supply Security Guarantee was introduced by the Labor government which required manufacturers to keep at least four or six months supply in Australia for key medicines, but apparently this is not being enforced. 

The World Trade Organisation (WTO) Trade-Related Intellectual Property Rights (TRIPS) agreement gives the pharmaceutical companies 20-year monopolies on price and supply for new medicines. In 2022, they reported global revenues of US$1.48 trillion.

These companies have no obligation to ensure adequate supplies even in rich countries like Australia. They may decide to switch production to more profitable lines of medicine or have unexpected disruptions to production.

The Morrison Coalition, the Albanese Labor government and other WTO member governments squibbed the opportunities at the WTO and at the World Health Organisation (WHO) to regulate Big Pharma in the public interest during the COVID pandemic, and ensure access to affordable medicines in low-income countries. 

Despite the Australian experience of delays in access to vaccines during the pandemic, and the current shortages, there is no policy yet to ensure domestic production of critical medicines. While Labor’s Future Made in Australia policy holds out the prospect for sovereign production capacity, including of medicines, there is no detail of strategy or funding available about medicines. This is now desperately needed.