Highlights of CPTPP – Healthcare

Continuing our series of articles on the recently signed TPP-11 free trade agreement (also known as the CPTPP), we now take a closer look at what it means for the healthcare sector.

Australia is globally recognised for its focus on, and early adoption of new technology, including the development of new medical devices. The key to this continued success is attraction of Research and Development (R&D) investment as well as access to a broad range of markets in which to sell new products.

Australian universities are becoming more commercially focused around their R&D in the health industry, in particular around medical devices, where they are partnering with commercial enterprises to help fund the development of new products and bring them to market.

More than half of Australian medical device companies have grown from startups, with 40% of all medical device businesses having been established since 2000.[1]

A report from the Medical Technology Association of Australia stated that the medtech industry in Australia employs over 19,000 high skill workers, across 500 companies, the majority of which are small to medium enterprises (SMEs). The industry is worth over $10 billion in economic contributions[2].

Support by the Australian government in this area, with the recent launch of the $35 million BioMedTech Horizons program[3], an initiative to support innovative and collaborative health technologies, drives discoveries towards proof of concept and commercialisation that addresses key health challenges.

TPP-11 will eliminate all remaining duties on Australian exports of medical instruments and devices to TPP-11 parties, which were valued at approximately $1 billion in 2016-17[4]. In reality, this means that Australian medical devices will now be exporting tariff-free to the 10 Asia-Pacific markets.

This commitment is important, when taken in the context of the additional promises by TPP-11 parties enabling Australian suppliers to bid for lucrative medical equipment government procurement contracts.

Commitments from Malaysia, Mexico and Vietnam will give Australian providers of private health and allied health services greater certainty regarding access and operating conditions in these markets, potentially seeing an expansion of this sector into TPP-11 markets.

If you’d like to discuss how free trade agreements could affect your exports, or the range of Crowe Horwath’s export services, including Export Strategy planning, Supply Chain Optimisation and Export Grant applications, please contact us directly for a friendly chat, or contact your local Crowe Horwath adviser.

Sam Lawrence, Senior Manager, Global Trade and Customs

John Haydon, Senior Partner, Audit and Assurance

[1] Source: Medical Technology Association of Australia

[2] https://www.mtaa.org.au/news/medtech-industry-benefit-mtpconnect-and-mtaa-partnership

[4] http://dfat.gov.au/trade/agreements/not-yet-in-force/tpp-11/outcomes-documents/Pages/tpp-11-outcomes-health.aspx