Big problem with essential Aussie scheme

Perth Now

4 hours ago

Health Minister Mark Butler says he is looking at recommendations to speed up medicine approvals amid pressure from lobbyists both within Australia and in the US.
Medicines Australia has repeatedly highlighted that Australia lags behind comparable countries in listing new medicines on the Pharmaceutical Benefits Scheme (PBS) – a list of federally subsidised medicines.
It takes an average of 466 days from when the Therapeutic Goods Administration approves a medicine to when it becomes affordable on the PBS, according to the peak body.
This is much longer than in the UK and Canada, for example.
The lengthy timeline has also angered the Pharmaceutical Research and Manufacturers of America (PhRMA), which has framed the PBS as a 'non-tariff trade barrier' that harms American companies in representations to the Trump administration.
Lengthy PBS listing times is among PhRMA's core criticisms.
Mr Butler said on Thursday he would look at Medicines Australia's recommendations to make the 'approvals system quicker'. Powerful pharmaceutical lobbyists in the US have accused Australia of 'freeloading' on the high prices paid by American consumers. Martin Ollman / NewsWire Credit: News Corp Australia
'We're getting an enormous number of new medicining coming on to the market,' he told the ABC.
'We're living through a turbocharged period of discovery bringing more and more new medicine, so making sure that we can assess them and approve them very quickly to get them into patients as quickly as possible is something I've said is a real priority for us this term.'
Because the PBS compels drugmakers to negotiate prices with the federal government, PhRMA has accused Australia of 'freeloading' on US-funded research and development.
Meanwhile, American consumers pick up the bill, according to the lobby group.
'The medicines industry, understandably, given their interest, want to make prices higher as well, so there will be a bit of a debate about how we do that,' Mr Butler said.
'But I'm very much on the page of getting medicines more quickly into our system, our PBS system.
'It's a terrific system and we're trying to make medicines cheaper at the same time for Australians.'
PhRMA has explicitly urged the Trump administration to 'leverage ongoing trade negotiations' to influence Australia's PBS policies.
Mr Butler has echoed Anthony Albanese and fellow senior government ministers in ruling out any 'compromise' on the system as part of tariff talks.
For the moment, Donald Trump's concern with the sector appears to be largely focused on bringing down prices in the US rather than punishing allies for having cheaper medicines.
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 the US President, is to make pharmaceuticals in the US.
In a warning shot to firms, Mr Trump this week threatened to slap tariffs of up to 250 per cent on foreign-made products.
With Australian pharma exports to the US worth more than $2bn in 2024, it would hit producers Down Under hard.
Exports are mostly blood products and vaccines but also include packaged medicines and miscellaneous products, such as bandages.
'We'll be putting (an) initially small tariff on pharmaceuticals,' Mr Trump told US business news channel CNBC.
'In one year, 1½ years maximum, it's going to go to 150 per cent and then it's going to go to 250 per cent because we want pharmaceuticals made in our country.'
He did not say what the initial rate would be, but earlier in the year he said duties on the sector would start from 25 per cent.
Mr Trump last week wrote to 17 major pharmaceutical companies demanding they lower their prices for American consumers and bring them in line with prices overseas.