Australia’s MedTech sector is a sleeping giant. National strengths in genomic medicine, digital health and precision medicine, along with lighthouses like Cochlear and a pipeline of promising startups, all point to a sector with a ton of potential to become a globally competitive force.
The MedTech market is already substantial. According to a 2023 report, there are 17,000 direct jobs in the sector and 51,000 total jobs, with $11.4 billion in revenue produced.
MedTech has enjoyed seven per cent annual growth in the number of patents filed across the last decade, and the federal government has committed more than $1 billion each year in health and medical research.
And yet, there is still a lot to be done to ensure the sector can take on the world and continue this rapid growth, and a significant role for governments to play.
There are few Australians better positioned to comment on the local MedTech sector and what levers need to be pulled going forward than Professor Ian Meredith. The highly respected cardiologist has worked on both sides of the equation, having served at Monash University for three decades and as Boston Scientific’s global chief medical officer and executive vice-president in the US for nearly eight years.
Upon his return to Australia, he took up a number of board and advisory positions, including as a non-executive director of the BioMelbourne Network, a senior medical advisor at MIVI Neuroscience and Anumana, and an independent board member at Alleviant Medical.
When it comes to public policy and the medtech space, Professor Meredith zeroes in on efforts to address fragmentation in initiatives around the country and silos within government. He points to cultural changes that are needed in Australia, asking the question of why the commercialisation side of healthcare is somehow seen as the “dark side” rather than the driver of positive health impact. And he points to the need for a novel approach to measuring success in health research.
Bringing initiatives and the ecosystem together
When he came back to Australia, Professor Meredith was surprised by the huge array of MedTech-focused initiatives from the federal and state governments, and the sheer number of industry bodies and organisations.
He believes that consolidating these efforts and ensuring a national approach is vital to avoid a state versus state situation. “This is a key aspect that the government can address to help the sector commercialise crucial health research,” he says.
Particularly since the COVID pandemic, there have been swathes of MedTech-focused policies and initiatives from the federal government and the states and territories.
But according to Professor Meredith, these are often only focused on the relevant state, and are typically pitting jurisdictions against each other, rather than taking a more holistic national approach.
“These efforts at a state and federal level are somewhat fragmented and not necessarily synergistic or complementary,” Professor Meredith says.
“I think we have to figure out ways to actually have a more unified national policy and understand the role that each of the states can actually play as part of this, rather than competing one against the other.
“The problem with that is that there’s not enough assets in any given state to necessarily support those initiatives, and we should be looking to a more holistic national approach.”
In comparable US states and wider nations such as Ireland and Israel, there are more “holistic” approaches to support the sector, he says.
There are also issues of siloing and fragmentation in the Commonwealth’s approach to MedTech policies, which is currently spread across the Health, Industry and Education portfolios.
“We can’t have different branches of the federal government working on policies that don’t complement, integrate with, support and synergise with a broader strategy,” Professor Meredith says.
This fragmentation is also an issue among the various industry bodies and non-government organisations in the MedTech space.
“When I first got back I struggled to actually know the acronyms for all the different organisations and what they actually did – and when you read their mission statements, many of them are quite similar or overlapping,” he says.
“So, if it’s the best way to use our resources, should we be consolidating and creating larger aggregated structures that might be able to do this more effectively? We need to have a national mindset. That is the direction we want to go as a nation, and this is the direction we should be taking and then thinking more holistically.”
A reality check
There are common refrains in the industry of Australia’s world-class efforts in the sector, particularly around its research. But Professor Meredith believes that the industry needs to be careful with these statements in order to not lose sight of what improvements can be made and where the room for growth is.
“While it’s great for promotion, it may not necessarily lead us to where we want to go,” he says.
“We’re using those terms too loosely…I think it’s a two-edged sword, because we start to believe it and there is a level of complacency associated with that, not the level of hunger and gritty competitiveness that one needs to make it to the top.
“I think a reality check might help us understand what quantum steps we need to actually make in order to meet that global standard.”
The ‘dark side’
There is a common refrain in the sector, and among the general public, that the medical care side of the sector is the “bright side,” and the industry, commercialisation and manufacturing side is the “dark side”. But this misconception is damaging and needs to be stamped out, Professor Meredith says.
“They don’t realise it’s one continuum. There’s simply nothing that happens in a healthcare setting that wasn’t manufactured or produced somewhere else at a profit. If it wasn’t manufactured and produced at a profit, it wouldn’t be available for healthcare in the first place.
“We’ve got to get away from this idea that there’s a light side and a dark side – you realise that we’re highly dependent on healthcare commercialisation to innovate healthcare. If you don’t commercialise it, it doesn’t happen.”
And commercialisation is an area where Australia can and needs to improve in order to compete with the best ecosystems in the world.
“There’s no shortage of great ideas here and there’s no shortage of great research – it’s the rate of conversion that I think presents some challenges,” he says.
“We just need to continue to have success because nothing will generate success like success.
“The thing I love here in Australia is that there’s genuine scientific creativity and great ideas. There are some astonishingly talented leaders who really get it, and others who could benefit from a deeper appreciation and understanding of what it takes to get regulatory approval and build commercial success in foreign jurisdictions like the US.”
A part of this is also a cultural shift in how success is measured in the MedTech and research spaces, Professor Meredith says.
“There are people who think the end game is the next scientific grant, and the scientific publication that actually helps you, but it doesn’t help the community.”
“It’s only when you take it out of that setting and create it into a real, manufacturable product that can be commercialised, transported and distributed to people…that you’ve made a difference.
“We’ve got to get this mindset that the next research grant or the publication you got is only one step in success. We make too much of a focus on the number of publications or the size of the grant that you actually got as being success in and of itself.
“That actually doesn’t do much for humanity until it’s converted into a real, tangible product that can be made and distributed.”
Growing smart money
One area that can be grown to improve Australia’s commercialisation of MedTech is in the venture capital space. While there are now significant VC funds focused on health, there is not necessarily the level of expertise and experience needed in the area yet, Professor Meredith believes.
“I think many of the funds here are very good at diligence, but in terms of their ability to allocate assets along the path to regulatory and commercial approval in global markets, the skillsets become thinner and thinner, and then the ability to syndicate as a non-partner with other international bench firms is perhaps not as strong,” he says.
“Money is one thing; smart money is another. And smart money actually brings with it the level of collaboration and connectivity to bring the right people in at the right time to give the right advice.”
A potential way to accelerate the growth of this “smart money” would be for the government, through the National Reconstruction Fund, to become a major lead investor in a big international VC fund, enabling it to bring its depth, breadth, and connectivity to the Australian sector.
“That seems like an extremely good strategy to me,” Professor Meredith says.
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