The federal government has vowed that the Pharmaceutical Benefits Scheme (PBS) will not be subject to negotiation after it was revealed that the UK agreed to a substantial increase in spending on US medicines in exchange for the removal of tariffs.
Under the US–UK agreement, the UK will receive zero per cent tariffs on pharmaceutical exports to the US and will increase its spending on US medicines by 25 per cent, marking the first major boost in National Health Service spending in over 20 years.
There are concerns that the higher spending could eventually be passed on to taxpayers. The Albanese government has committed to capping prescription prices under the PBS at a maximum of $25 from January 1 next year — the lowest level since 2004. Calls have emerged to ensure that any similar deal Australia may reach with the US does not result in higher medicine prices at home.
Dr. Patricia Ranald, convenor of the Australian Fair Trade and Investment Network, emphasized that the Australian government must uphold its promise to keep the PBS affordable and continue regulating the wholesale price of medicines. She warned against agreeing to a 25 per cent rise in wholesale medicine prices, as the UK has done, saying it would enrich pharmaceutical companies and place undue pressure on Australia’s health budget.
UK officials stated that the 25 per cent spending increase would focus on approving medicines that deliver significant health benefits but might have previously been rejected for cost-effectiveness reasons, including breakthrough cancer treatments and therapies for rare diseases.
Dr. Ranald criticized claims from the Trump administration that US citizens subsidize lower-cost medicines in other countries, calling it “simply a lie.” She noted that the US is the only advanced industrialized nation without a system to regulate wholesale medicine prices, resulting in high costs for consumers, particularly those without private health insurance. She urged the Australian government to resist “bullying blackmail” from the US.
A spokesperson for Trade Minister Don Farrell said the government will continue advocating for the removal of all tariffs on Australian imports to the US in line with the existing free trade agreement. Farrell confirmed that the Albanese Government will never negotiate the design of the PBS, stating that it has delivered Australians good health outcomes at affordable prices and will continue to do so. The government will also continue engaging with the US administration to protect Australian interests.
