Australia Must Resist US Blackmail On Wholesale Medicine Prices

Following overnight reports that the British government has agreed to a 25% rise in the wholesale price of medicines to remove a threat of a hundred percent tariffs on British medicine exports to the US, the Australian government has said it is conducting similar negotiations with the US.

“The Australian government should keep its promise that the Pharmaceutical Benefits Scheme (PBS) will continue provide access medicines at affordable prices and will continue to regulate the wholesale price of medicines,” said Dr Patricia Ranald, AFTINET convener, today.

Dr Ranald explained that the PBS is economically sustainable because the Australian government negotiates with pharmaceutical companies to set the wholesale price of medicines based on both medical effectiveness and value for money in return for listing them on the PBS, which provides a guaranteed market. The government then subsidises the price at the chemist at $7.70 for pensioners and $31.60, for others, which is due to be reduced to $25 on January 1, 2026. The annual cost of the PBS is $22.586 billion.

“The Australian government should not agree to a 25% rise in the wholesale price of medicines as the British government appears to have done. This is simply enriching pharmaceutical companies who are already amongst the most profitable in the world, and will put unacceptable pressures on Australia’s health budget,” said Dr Ranald.

“The claim that US consumers are subsidising lower prices in other countries is simply a lie. The truth is that the US is the only advanced industrialised country which does not have a system to regulate the wholesale price of medicines. US Pharmaceutical companies charge high wholesale prices which are then passed on to consumers, and many people without private health insurance cannot afford medicines. The US government and pharmaceutical companies are using tariff threats to force other governments to raise wholesale prices to the US level,” said Dr Ranald.

“The Australian government should not give into this bullying blackmail.”

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