The price of medicines in Australia could rise after Donald Trump’s announcement that he will sign an executive order aimed at slashing drug prices in the United States.
Trump says he will sign the order at 9am on Monday (local time) from the White House, claiming it will reduce US drug prices by between 30 to 80 per cent ‘almost immediately.’
Posting to Truth Social, Trump wrote that prices would ‘rise throughout the World in order to equalise and, for the first time in many years, bring FAIRNESS TO AMERICA!’
The order is already being described by supporters as ‘one of the most consequential Executive Orders in our country’s history’, though full details remain unclear.
The move is raising concerns globally, including in Australia, about how the move could impact local medication prices.
Jared Mondschein, who is the research director at the United States Studies Centre at the University of Sydney, says the announcement is no surprise.
‘It’s no surprise that the White House has finally moved on the issue of US drug prices,’ he said.
‘What’s surprising is that it took them 100 days to act. Americans pay three to four times more for prescription drugs than people in other countries.
President Trump (pictured) says his plan will cut US drug prices by 30 – 80 per cent
‘One of the main reasons Donald Trump gained traction in the first place was because voters were frustrated with the high cost of healthcare and medications.’
Mr Mondschein warned the move could lead to higher drug prices in Australia as pharmaceutical companies seek to balance the global market.
‘It doesn’t take much digging to see that Americans have effectively been subsidising the development of cutting-edge pharmaceuticals for the rest of the world,’ he said.
‘It’s not that Americans don’t want to see innovation continue, they just want other countries to start paying their fair share.’
Australians currently enjoy the Pharmaceutical Benefits Scheme, which reduces the wholesale prices retail chemists have to pay for subsidised drugs so the sick and the elderly can buy prescription medicines cheaply.
The federal government spent $17.7billion on subsidising medicines in the 2023-2024 financial year – with this move raising the possibility that more taxpayer money may have to be funnelled to keeping prices down.
Mr Mondschein compared the move to Trump’s previous trade tactics.
‘Just as Trump’s tariffs pushed nations to rethink supply chains, and rising global tensions have driven up defence budgets, countries must now also ramp up their health investment,’ Mr Mondschein said.
The move is expected to have global impacts, which could see prices in Australia go up (stock image)
He warned nations could be left behind if they weren’t willing to pay more.
‘The reality is, if a country won’t meet a sustainable price point, it may simply be excluded from the latest treatments,’ Mr Mondschein said.
He also warned this approach is not exclusive to Trump or republicans.
‘Some might view this as a uniquely Trump-style announcement,’ Mr Mondschein said.
‘But it’s worth noting what the Biden administration has actually done. Things are shifting.’
He pointed to the Biden administration’s move to cap the cost of insulin at $35, cutting prices by about 70 per cent.
‘At the end of the day, Americans still pay more for healthcare and insurance than anyone else, without necessarily receiving better care,’ Mr Mondschein said.
‘Maintaining that status quo is politically untenable.’
The full details of the plan are yet to be revealed (stock image)
Mr Mondschein said it remains to be seen what the new executive order will actually contain.
‘The real question now is how this reform will be implemented,’ he said.
‘Trump talked about cutting drug prices during his first term, but wasn’t able to get it done.
‘The devil, as always, is in the details – but the political pressure to act is undeniable.’
Trump’s announcement sparked a flurry of responses on social media with Aussies slamming the insane costs in the US healthcare system.
‘As a type 1 diabetic, the price they pay in the US for insulin has made me sick, as so many just couldn’t afford this lifesaving med, it’s criminal!’ one wrote.
‘Even if Trump manages to reduce prices by 80 per cent like he claims, they’ll still being paying USD$20 or more!’ another added.
