Labor vows to ‘fight' as Trump threatens pharma tariffs
Health Minister Mark Butler says the Albanese government will 'fight for the PBS'. Martin Ollman / NewsWire Credit: News Corp Australia
The Albanese government is vowing to 'fight for the PBS' as Donald Trump tries to strongarm drugmakers into moving production to the US.
The Pharmaceutical Benefits Scheme (PBS) is a list of federally subsidised medicines and a prized Labor invention.
Health Minister Mark Butler last month introduced legislation that, if passed, would cap PBS-listed medicines at $25 from January 1, 2026.
Aside from subsidising medicines, the scheme also compels firms to negotiate prices with the federal government, which helps keep products affordable.
Celebrated as a cornerstone of the healthcare system in Canberra, the scheme is denounced by pharmaceutical lobbyists in Washington, who claim Australia is 'freeloading on American innovation'.
One group, Pharmaceutical Research and Manufacturers of America (PhRMA), has explicitly urged the Trump administration to 'leverage ongoing trade negotiations' to influence Australia's PBS policies.
But Anthony Albanese, Mr Butler and other ministers have ruled out budging on the PBS.
'We'll fight for our PBS and fight for the jobs of Australian manufacturers here,' Mr Butler told the ABC on Friday, noting most production is in Melbourne.
Pharmaceutical exports to the US totalled north of $2bn in 2024, making it the biggest foreign market for Australian producers.
Exports are mostly blood products and vaccines but also include packaged medicines and miscellaneous medical items, such as bandages.
Though, as Mr Butler noted, the US still exported more to Australia and did so without tariffs.
'We have zero tariffs on those imports that we take from America companies,' he said.
'We're making the case that should continue in reverse.
'We should be able to continue to export our terrific blood and plasma products and medicines to Americans without what might be a 250 per cent tariff.'
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Health Minister Mark Butler says the Albanese government will 'fight for the PBS'. Martin Ollman / NewsWire
Credit: News Corp Australia
For the moment, Mr Trump's concern with the sector appears to be largely driven by bringing down prices in the US rather than punishing allies for having cheaper medicines.
Last week, he wrote to 17 major pharmaceutical companies demanding they lower their prices for American consumers to bring them in line with prices overseas.
A Rand Corporation report found that Americans pay nearly four times more than Australians for medicines and about three times more than the average in other developed economies.
The answer, according to Mr Trump, is making pharmaceuticals in the US.
Mr Trump's 250 per cent tariff threat was a warning shot to firms, but one that, if realised, would hit producers Down Under hard.
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It will not save lives," a spokesman said. Opposition defence spokesman Angus Taylor said the recognition was premature. "This is a reward to Hamas for what they started on October 7 … if you start going down this path, I think Hamas will be very pleased with their work, and that's exactly the opposite of what we want to see," he told Sky News. Greens senator David Shoebridge said the recognition was overdue, but should also include sanctions on Israel. The crisis in Gaza began when Hamas attacked Israel on October 7, 2023, killing 1200 people and taking about 250 more hostage. Israel's response has since killed more than 61,000 people, according to Gaza's health authorities, and UN sources project more than two million people are facing high levels of acute food insecurity. Israel has denied that the population is suffering or dying from starvation despite international human rights groups condemning its offensive.
