REPORT: How we score on pharma R&D

Ruth Beran wraps up a recent report that gives Australia a high rating against other major centres of pharma R&D.

The Economist Intelligence Unit's recent report, 'Benchmarking Study of the Characteristics of the Australian and International Pharmaceuticals Industries' discusses how the Australian pharma industry and environment compares globally, then benchmarks 198 individual indicators relevant to international investment decisions made by the pharmaceutical industry.

The report assesses Australia against six other countries -- Germany, India, Japan, Singapore, the UK and the US. Of the seven countries assessed, Australia was ranked second overall, just behind Singapore.

Australia scored highly for many indicators relating to the industry skills pool, practices and regulatory processes although it scored below Singapore and India on costs. For the overall business environment, Australia was middle-ranked.

Australia was ranked either first or second for:

• Competitiveness in salary costs for skilled employees, including business, marketing and company directors, scientists, and chief executives.
• Affordability of overall utilities costs (energy, water and communications).
• Availability of scientists relative to overall size of population.
• Number of undergraduate and doctorate level degrees relative to size of population.
• Affordability of taxation of interest, capital and property.
• Provision of federal government grants for investment.
• Clinical trials infrastructure.
• General business environment scores related to political stability, foreign trade and exchange controls and financing provision.

Australia ranked third overall in relation to salary and additional employment costs -- we're markedly cheaper than the US, UK, Japan and Germany, and only slightly higher overall than in Singapore. However, India's labour costs were by far the lowest.

Australian office rental was more expensive than in Singapore and India, but cheaper than in the US, UK, Germany and Japan. Australia ranked fourth in relation to the cost of renting industrial land and fifth for construction costs. Not surprisingly, given our geographical position, Australia was the most expensive country for freight costs.

After Singapore, Australia has the highest proportion of skilled people employed in the pharmaceuticals industry, relative to overall population. Australia also scored well when it came to our pool of skilled labour. Australia and Singapore rank above all the other countries in the study in the number of undergraduate degrees, master and doctorates relative to population.

Australia was ranked behind the US, UK and Germany on regulatory and quality issues, judged on mutual recognition of data and standards, compliance with these standards and the time taken to reach significant milestones in the drug development process.

Australia ranked fourth for taxation overall and scored highly on four of the five measures relating to intellectual property regimes.

Ranking below Singapore, Australia came second on incentives and government support schemes, and in absolute terms, we ranked fourth after the US, Germany and UK, on indicators relating to the level and type of investment.

Our low levels of R&D spending let us down -- Australia ranked a lowly sixth against the other countries surveyed.

The Economist Intelligence Unit commissioned consultancy firm Thomson CenterWatch to conduct a survey on the number, cost and timeliness of clinical trials in the seven countries. Overall, Australia was ranked first, scoring well for low average costs of clinical trials, a relatively large amount of recognised trial sites and a high percentage of clinical trials completed within the allocated time.

However, the report suggests that there is "a significant potential for Australia to increase investment in clinical trial activity" based on the relatively low ranking on the actual number of clinical trials taking place on a per capital basis.

The US ranked second, Singapore third and Japan ranked the lowest due to poor scores for many of the measured indictors for clinical trials.