Australia has spent years asking how to produce more world-class healthcare innovation. A more urgent question is now emerging: why are so few of those innovations making it into Australian hospitals?
This disconnect sits at the centre of the Australian Medtech Manufacturing Alliance’s Better Health Made Here agenda – an industry push to ensure the country’s growing medtech and biotech capability translates not just into patents, trials and export wins, but into tangible improvements for Australian patients and a stronger domestic health economy.
It is a challenge Australia is hardly alone in confronting. But according to industry leaders, Australia’s version of the problem is particularly frustrating because the upstream ingredients are increasingly in place.
The nation is getting better at research translation. More companies are reaching commercial readiness, and more devices are being manufactured locally.
But too often, Australian-made technologies are validated overseas, sold overseas and adopted overseas before they are ever used in the health system that helped create them.
“We are becoming much better as a nation at moving from development to full commercialisation,” said AusBiotech chief executive Rebekah Cassidy.
“The challenge in medtech is that there are increasing numbers of companies reaching commercialisation in Australia, manufacturing here, but their products are not reaching Australian patients and are going offshore.”
That missing middle – the difficult terrain between technical validation and real-world adoption – is increasingly being recognised as one of the sector’s most significant structural weaknesses.
And procurement, industry argues, is the least glamorous but perhaps most consequential part of that puzzle.
For years, the life sciences conversation has focused on grants, venture capital, research translation and manufacturing incentives. Those remain critical. But none of them solve the question of who buys an Australian innovation first – and what happens when there is no clear, navigable pathway into the hospital system.
“A purchase order is often better than a grant,” said Stuart Dignam, CEO and managing director for MTPConnect.
“Grants help innovation, but purchase orders send a stronger signal. They provide validation that something works, is safe, and is trusted in clinical settings. They also signal to investors that the product is worth backing.”
This insight sits neatly alongside the broader recommendations of the federal government’s Ambitious Australia report, which argued that Australia’s innovation system has long over-emphasised invention while underinvesting in the mechanisms that turn research into domestic economic activity.
In healthcare, this means acknowledging that commercialisation does not end at Therapeutic Goods Administration approval, manufacturing readiness or even investor backing. It ends when a clinician can actually use the technology – and when an Australian company has a viable domestic customer.
This is the logic behind MTPConnect’s Pathway to Market program, now emerging as one of the clearest practical examples of what Better Health Made Here could look like in action.
Rather than another grant round or accelerator, the Victorian pilot has taken aim at a more basic market failure: innovators and hospital procurement teams largely do not know how to find one another, speak one another’s language, or assess each other’s needs.
Companies often see hospital procurement as opaque, slow-moving and impossible to penetrate. Procurement teams, meanwhile, are typically focused on risk, certainty of supply and budget pressure, with limited visibility of what local innovators are building.
“The Pathway to Market program is about how we improve procurement in Australia so homegrown medtech is purchased by Australian hospitals to treat Australian patients,” Mr Dignam said.
The program, delivered in partnership with BioMelbourne Network with backing from the Victorian government, has brought medtech SMEs, procurement leaders and clinicians into direct workshops and showcase environments – a simple intervention, but one that is already surfacing practical opportunities.
“We are putting health system stakeholders and innovators in the same room, which traditionally has been difficult,” Mr Dignam said. “This has opened up real opportunities.”
These opportunities matter for reasons that extend well beyond the immediate sale of a single device.
A first hospital contract provides a company with clinical validation, procurement credibility and a signal to private capital that the technology is no longer hypothetical. It also improves the likelihood that manufacturing, workforce growth and future R&D investment stay onshore rather than following customer demand offshore.
In other words, procurement is not simply a hospital purchasing issue – it is an industry-building lever.
Peer nations have understood that for years. Countries including Singapore, Germany, Denmark and the United Kingdom have increasingly used public procurement settings to support SMEs, sovereign capability and local healthcare adoption – often by weighting social and economic value alongside immediate price.
Australia, by contrast, still treats procurement largely as an administrative exercise rather than a strategic policy tool.
This fragmentation is particularly acute in health, where industry development levers largely sit federally while hospital purchasing decisions sit with states and individual health services.
“Procurement is one lever in a broader system change,” Ms Cassidy said, “that requires coordinated governance and national strategy.”
This is where Better Health Made Here becomes more than a slogan.
The Action Plan currently being developed by AMMA, AusBiotech, MTPConnect and sector partners is expected to focus on several connected pillars: stronger sovereign manufacturing capability, more effective capital formation, clearer translation pathways, better health system adoption settings and more coordinated government engagement across what is currently a highly fragmented policy landscape.
Procurement alone will not fix all of those issues, but industry leaders increasingly see it as the practical pressure point where many of the broader ambitions either become real or remain theoretical.
Without a functioning pathway into domestic health purchasing, the rest of the ecosystem continues to leak value: governments fund innovation that patients do not see, investors back companies that scale offshore, and manufacturers build products for export before local clinicians ever get to trial them.
The Better Health Made Here proposition is that this does not have to remain normal.
Five years from now, Ms Cassidy says success would look like a system in which “it is no longer surprising for hospital procurement teams to see Australian innovation as a viable option”.
Mr Dignam puts it simply: “Ambitious Australia provides the roadmap. Pathway to Market is a practical implementation that can be scaled nationally.”
Australia may already know how to invent medtech.
The harder — and economically more important — task now is building a health system capable of backing its own ideas.
This article was produced by InnovationAus.com in partnership with AMMA.
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