Australia has no shortage of world-class medical innovation. What Australia lacks, however, is a local health system that buys what it creates. And that’s a difficult issue.
It is the central tension underpinning a new push from the Australian MedTech Manufacturing Alliance (AMMA), which is attempting to solve a paradox that has long frustrated the sector: a strong domestic capability in medical technology that is overwhelmingly exported, while the local health system continues to rely on imports of technology from elsewhere.
In this episode of the Commercial Disco podcast, Professor Ian Meredith, argues that this disconnect is not a failure of science or innovation, but of incentives, procurement settings and system design. This is where the AMMA is putting its attention.
Australia’s MedTech market is worth about $8.5 billion, yet only a fraction of that – less than four to five per cent – is spent on locally manufactured products. Meanwhile, the country produces more than $2 billion worth of MedTech goods each year, the vast majority of which are exported.
The result is a structural imbalance: Australian companies are forced to look offshore for their primary markets from day one. Health systems are buying overseas products even when viable domestic alternatives exist.
For Professor Meredith, the issue is not that hospitals or procurement teams are making the wrong decisions. In fact, he is clear that they are behaving exactly as the system requires.
“It isn’t a procurement department’s job to support local industry,” he says. “There’s no requirement or mandate for that, so the most accessible, cost-effective product is what comes into play.”
That logic creates a broader economic blind spot, Professor Meredith says. Health procurement decisions are made in isolation from national industry objectives – even as governments talk about sovereign capability, supply chain resilience and economic diversification.
The creation of the AMMA is an attempt to bridge that gap.
Connecting manufacturers with health system buyers
AMMA emerged from earlier efforts to strengthen local MedTech manufacturing and procurement pathways. Today, the alliance is delivered as a national partnership of industry organisations, led by BioMelbourne Network and supported with funding from the Victorian government. It connects Australian manufacturers with health system buyers and works to remove structural barriers to adoption.
At its core is a simple proposition: where Australia has a competitive local product, it should at least be visible to the system, evaluated and fairly considered.
That sounds straightforward, but Professor Meredith points to deeper systemic issues that complicate that baseline.
One of the most immediate is data. There is no unified, real-time view of what the health system is actually purchasing – down to the level of consumables, devices or equipment.
Without that visibility, local manufacturers cannot properly assess market opportunity, plan production or compete effectively.
“If you were making bandages or catheters, you don’t really know the size of your own domestic market,” Professor Meredith says.
That lack of transparency feeds into a second challenge: fragmented procurement processes across states and institutions, with no consistent mechanism to evaluate or prioritise local alternatives.
Rather than mandating local purchasing outright, Professor Meredith suggests a more pragmatic starting point – aligning incentives.
That could mean introducing procurement frameworks that require decision-makers to assess whether a local option exists, or creating broader policy settings that recognise the long-term economic and resilience benefits of domestic supply chains.
The defence sector offers a useful analogue. There, sovereign capability is explicitly recognised as a strategic priority, and procurement decisions are shaped accordingly.
Professor Meredith argues that health should be treated no differently – particularly given recent supply chain shocks, from PPE shortages to disruptions in basic items like intravenous fluids.
Australia consistently punches above its weight in research output, contributing around 3 per cent of global scientific publications despite accounting for just 0.3 per cent of the population. In top-tier research, that figure rises even higher.
The opportunity is to better harness what Australia is already producing in science.
A stronger domestic market would provide a proving ground for new technologies – allowing companies to refine products, generate clinical evidence and build commercial capability before expanding globally.
It would also strengthen the broader innovation ecosystem, creating feedback loops between clinicians, researchers, manufacturers and investors.
“You need a win for the patient, the health system, the company and the shareholders,” Professor Meredith says. “Procurement is what connects all of that.”
The inclusion of procurement as a key lever in the federal government’s Strategic Examination of Research and Development (SERD) review reflects a growing recognition of this dynamic.
For Professor Meredith, it signals a shift from a purely ‘push’ model – funding research and capability – to a ‘push-pull’ approach that also creates demand.
That demand is what ultimately determines whether innovation translates into economic and clinical impact. None of this, he cautions, will change overnight. But the direction is clear.
Australia already has the scientific base, the clinical trial infrastructure and pockets of advanced manufacturing capability. What it lacks is a system that consistently connects those strengths to its own market.
Fixing that may be less about inventing new technologies — and more about rethinking how, and from whom, the country chooses to buy.
This article was produced in partnership with BioMelbourne Network and the Australian MedTech Manufacturing Alliance (AMMA).
Do you know more? Contact James Riley via Email.