Treasurer Jim Chalmers has insisted Donald Trump’s move to slash drug costs in the US won’t drive up medicine prices for Aussies.
Trump claims his latest executive order, signed on Tuesday, will cut drug costs for Americans by up to 80 per cent as the US Government buys prescription drugs straight from manufacturers at the ‘most-favoured nation price’.
The move to buy medicines at the lowest price they’re being bought for in other countries has sparked concern that pharmaceutical companies will try to recoup their costs in other countries, including Australia.
‘How will you ensure the price of medicines don’t skyrocket here in response to the cuts in the US?’ Sunrise host Natalie Barr asked Mr Chalmers on Tuesday morning.
‘Obviously we’ve seen the announcements out of the US and we’ll work through them in the usual way,’ the treasurer said.
‘But we’ve made it really clear and I’ll make it clear again today, that our Pharmaceutical Benefits Scheme (PBS) is not up for negotiation.
‘We are making medicines cheaper in this country, not more expensive. The PBS is a really proud creation of Labour in government, it’s something that we cherish.’
Mr Chalmers added that the Labour government would do ‘everything to protect’ the PBS.
Mr Chalmers (pictured) said it was ‘unclear’ what the implications of Trump’s executive order will be, but the Labour government would do ‘everything to protect’ the PBS
Trump says his executive order will cut drug costs by up to 80 per cent as the US Government buys prescription drugs straight from manufacturers at the ‘most-favoured nation price’
Asked if the Australian taxpayer would have to may more to ‘prop up’ the PBS, Mr Chalmers said the implications of Trump’s announcement were ‘still unclear’.
‘Some of those consequences for other countries are being speculated on, but are not necessarily locked in.
‘We’ve made it very clear publicly and privately that we won’t be changing the PBS at the behest of other countries, and that remains our position.’
The PBS was a central pillar of Anthony Albanese’s election campaign, as he vowed to slash the maximum cost of prescription medicine under the scheme to $25.
Meanwhile, ‘big pharma’ in the US called on Trump to impose further tariffs on Australia because it subsidises medicines.
The drug companies lodged a formal complaint with Trump’s trade chief in March, calling for an end to the ‘damaging pricing policies’ in Australia.
It’s possible the US will try to use punitive tariffs to force Australia to abandon its medicine subsidies, and allow those companies exporting medicines to Australia to charge much more.
But Labor has vowed to keep the PBS off the table in any trade talks with the Trump administration.
