Exporting Pharmaceuticals

Australia’s high standards for pharmaceutical goods present a solid brand overseas, but there is a tangle of red tape to unravel before shipping products abroad.

The health industry is one of the most regulated industries in Australia and our rigorous standards generally surpass those of most other countries. Unfortunately, while our trustworthy reputation is good for representing our health products overseas, regulation by the Therapeutic Goods Administration (TGA) is often a barrier for exporters. 

The pharmaceuticals sector of the health industry becomes a tangle of red tape. Defined as any commodity related to medicinal drugs, pharmaceutical goods comprise medicines for human and animal ingestion or other types of consumption (via injection, absorption, sprays and drops, for example), including complementary health products and the raw materials used as ingredients for medicines. Overlaps include products from bioscience and biotechnology as well as medical supplies and equipment which may have components for consumption, for example, an EpiPen, which is an injecting device containing an adrenaline substance to treat severe allergic reactions.

Dr Tony Lewis, executive director of the Complementary Healthcare Council of Australia (CHC), says regulation is a major problem for companies looking to export and sees bureaucracy as a barrier to potential exporters. “There’s a resistance by the TGA around standards, perhaps they feel that the standards here are the only appropriate standards,” he says. “Our view is that they’re appropriate in the local market but for export they’re an impediment.”

The council has lobbied to remove regulatory barriers, in particular the rule that forces companies to comply with Australian regulations (particularly the labelling rules) even if the product is destined solely for the export market. This compliance, and the duplication it manifests, becomes a cost factor that many small businesses see as a discouraging expense. “We'd like to see some freeing up of that process, to have products that are purely going to be exported just comply with the requirements overseas. A product sold in Australia that would require a warning label here has to carry that label into the overseas market where, for the most part, they're not required. So that puts the person exporting here at a disadvantage,” says Lewis.

“In Australia, complementary medicine is regulated as medicine whereas similar products marketed in the US are referred to as dietary supplements. They're regulated as food so they don't have to comply with codes of manufacturing practice, they don't have to put the warning labels on and comply with requirements for the height of lettering and everything else.”

The Motive

So, what is the attraction in exporting pharmaceuticals? Taking maximum advantage of intellectual property (IP) is one reason. A standard patent lasts 20 years, so after the research and development phase many pharmaceutical companies may only have a few years to capitalise on their exclusive competitive advantage in the open market to recoup costs. Because Australia has such a small population, worldwide exposure reaps benefits through increasing demand for product through volume.

Protecting IP is an important part of a pharmaceutical exporter’s worldwide strategy. IP Australia is the government body that holds patents here. As Australia holds a number of agreements with other countries with regard to patents, this patenting body can also help businesses navigate international patent systems. Although there are fees involved, it is a good way to ensure you have a unique product to sell and protection for it.

The government also has a number of programs in which businesses can participate to simplify the export process. For example, Austrade provides advice for businesses looking to export, others may choose to undergo an export capability assessment, which will look at a business in the context of the industry and the specific countries targeted for export.

Maverick Biosciences, from Dubbo in NSW, exports products to the biopharmaceutical sector to use in the manufacture of medication, vaccines, and nutritional products. They have used Austrade’s assistance to make the export process easier–for example, through Austrade’s relationships with trading partners such as Japan, one of their main clients. "It's been extraordinarily valuable to have relationships with people in our target markets," says Maverick co-founder, Cameron Crowley.

Exports comprise 98 percent of Maverick's business, which Crowley attributes to their ability to get the details right to make things easier for the importer. “We produce and supply material exactly as per their manufacturing and regulatory needs while meeting rigid requirements to ensure timely and trouble free importation,” he says.

The unique characteristics of pharmaceutical products means these goods also have very specific requirements when it comes to transport including temperature and humidity control, product handling and freight security, to prevent products from entering the black market.

Greg Paradine is the commercial manager for the Life Sciences and Chemicals division at freight forwarding company DHL. "The biggest challenge in pharmaceutical exports and imports is temperature-control shipments. When companies do their clinical trials and product stability testing they do it at certain temperatures. For biologicals, the most stable temperature range is two to eight degrees because they'll get the longest shelf life. But for the freight world, two to eight degrees is the hardest temperature range to move something at, because we're moving it through so many different parties. It's easier if it's frozen or if it's ambient. For two to eight degree shipments, we become risk managers more than anything else."