Explained | Why should Australia lose sleep over West Asia war? Here's why

The ongoing war in West Asia is disrupting the medicine supply chains across the globe and forcing drug makers to re-route the medicine supplies away from the conflict zone to countries where they are needed.

Australia's medicine supply chain remains in a vulnerable spot, said The Conversation.

The island country produces some medicines and vaccines locally, however, largely depends on imported supplies.

As per reports, Australia imports 90 per cent of its medicine stocks, including both critical drugs and general medications.

In 2025, the Therapeutic Goods Administration (TGA), the national medicines regulator of the country listed about 400 medicines in shortage, of which about 30 were categorised as critical and having no replacements.

The main sources of the medicines are the United States, Europe, India and China, with these countries offering the raw materials used in making medicines and other paramedical equipment.

How is West Asia war disrupting the supply?

The medicine supply chains are like a spider’s web and not a straight road. When importing raw materials for making medicines, each element could come from a different part of the world. 

Amid war-like situations, shipping routes get blocked or delayed. It can also cause air restrictions where shipping planes take longer routes to avoid flying over the conflict zones or are restricted to do so.

The blockade in the Strait of Hormuz is disrupting supply chains across various sectors, including fuel, petrochemicals and medicines.

The re-routing of shipments can lead to increased transportation costs and medicine prices. 

As per reports, medicine shortage in Australia is old news. The country has already been in drug shortage for years, with six classes of drugs most likely to run short: antibiotics, anesthesia, hormonal medicines, cancer treatments and epilepsy drugs.

To avoid scarcity of important medicines, Australia had implemented a scheme in 2023 to stockpile medicines for emergency situations.

It had asked the drug manufacturers in the country to hold a minimum five to six months stock of certain listed medicines.

This buffer period allows the drug regulator of  the country to manage disruption in time and respond effectively in times of disrupted supply.

According to The Conversation, these medicines are not stored in just one warehouse, but distributed across regions for medicines to be equally available to all. 

Till 2025, the island country had a significant shortage of sterile intravenous fluids which are essential to administer drugs and hydrate the patients intravenously. 

However, the shortage has been stabilised coming into 2026.

If the West Asia conflict escalates, it could continue to cause uncertainty in the Australian drug markets.

Why is Australia not making its own medicines?

As per reports, Australia’s Pharmaceutical Benefits Scheme (PBS) aims at providing prescription drugs at affordable prices.

Though putting customers at an advantage, the land becomes unattractive to giant drug manufacturers.

To receive the subsidy from Australian taxpayers, the drug makers are required to provide evidence to the PBS committee which further assesses if the drug is cost-effective in comparison to other alternatives, said The Conversation.

These restrictions limit the range of medicines which could be offered to the island's drug market.

Australia accounts for only 2 per cent of the global pharmaceutical market.