- MTPConnect has issued a new report assessing how the sector is faring in light of the coronavirus crisis
- It would like to see more investment in pandemic related research and development including “next-generation technologies such as messenger RNA platforms for vaccine development”
- The government-funded body also sees the increased use of robotics, artificial intelligence and telemedicine as key trends emerging from the pandemic
A government-funded growth centre for the medical technology, biotechnology and pharmaceutical sector has called for sustained long-term investment into research and development (R&D) related to the pandemic response following the coronavirus crisis.
MTPConnect issued its second edition of its COVID-19 impact report on Tuesday, updating it for the period from June to September to assess how the medical technology, biotechnology and pharmaceutical (MTP) sector was faring in the wake of the pandemic.
The report found the sector was recovering but still faced challenges, including supply chain issues with the closure of international borders and enormous financial pressure for Australian universities with the loss of an estimated $2bn in revenue from international student fees.
$220m government investment in pandemic R&D
The 44-page report makes a number of recommendations including that Australia needs to have “sovereign capability” to better respond to future pandemics, and to ensure the country has adequate supplies of essential medical equipment, personal protective equipment (PPE) and medications.
“Strategic government procurement models and supplier networks/partnerships will ensure the long-term success of sovereign capability endeavours,” the report says.
The “long and complex development pathways for developing medicines and medical devices require a long-term investment approach in order to generate successful outcomes”.
“Consequently, there needs to be greater, sustained long-term investment into R&D in areas such as infectious diseases, next-generation technologies such as messenger RNA platforms for vaccine development and novel diagnostic testing approaches,” the report says.
The federal government’s $220m investment into CSIRO’s Australian Centre for Disease Preparedness in April is a good example of the type of investment required, the report says.
Other technologies such as artificial intelligence, robotics, automation and other capabilities have emerged as useful tools during the pandemic, the report says.
“Australia should leverage the experience from this pandemic to ensure that it is better placed in the future to respond even more effectively should a similar pandemic occur again.”
Six key trends emerging from pandemic
“The increased use of digital technologies such as artificial intelligence, big data and analystics and robotics is a trend that will be critical to maintain to build global competitive advantage and deliver economic growth and jobs to Australia, post-pandemic,” the report says.
Specifically, the report cites six trends it sees as emerging from the pandemic in the MTP sector.
First, it notes that telehealth and remote patient monitoring have been embraced during the pandemic, and says Australia has a chance to “adopt a patient-driven view” and make them permanent fixtures in the country’s healthcare system by permanently including those codes in the Medicare Benefits Schedule (MBS).
Second, it sees growth in home delivery of medical supplies and medicines to patients through services such as Uber Eats and medication management platform MedAdvisor (ASX:MDR), which reported delivering 34,000 items in 12,000 deliveries between late March and June.
That was just 0.05 per cent of pharmaceutical items dispensed over the period, meaning there’s still significant upside for the growth of medicine deliveries.
Third, it forsees more investments in local manufacturing and security of supply chains. While Australia’s manufacturing sector has been outsourced overseas in the past few decades, the pandemic shows that a local supply of medical devices is critical in times of crisis,.
Fourth, it says the pandemic response has resulted in the improved use of artificial intelligence, in things such as coronavirus case detection and body temperature monitoring. More R&D and innovation in AI tech can drive growth in the sector, the report says.
Fifth, there will be increased digitisation of clinical trials through online tools “to collect and analyse vast volumes of patient data”.
Lastly, it predicts better use of robotics, which have been used during the pandemic for everything from data collection to package deliveries to high-risk COVID-19.
Relevance for small cap companies
A number of ASX stocks have benefited from the increased use of telehealth solutions, including Global Health (ASX:GLH), Intelicare (ASX:ICR) and ResApp (ASX:RAP), while pooled development fund Strategic Elements (ASX:SOR) has exposure to robotics.