Australia Must Continue To Resist Both US And Pharma Industry Blackmail On Medicine Prices

Both the US Trump administration and Big Pharma in Australia are continuing to lobby our government to raise the wholesale price of medicines under the Pharmaceutical Benefits Scheme (PBS). The Trump administration has claimed that US consumers are subsidising lower wholesale prices in other countries and that it will impose 100% tariffs on pharmaceutical imports in 120 days unless those governments agree to set higher wholesale prices for medicines. Trump is also demanding that pharmaceutical companies invest in the United States. Medicines Australia, the voice of big Pharma in Australia says they oppose the tariffs but support the US claim that the PBS undervalues new medicines and are pressing for higher wholesale prices as has occurred in the UK.

Dr Patricia Ranald, AFTINET convener, said today:

“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 trying to force other governments to raise wholesale prices to the US level, which is clearly absurd.

“The PBS is economically sustainable precisely 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 to be prescribed by doctors, which provides a guaranteed market. The government then subsidises the price at the chemist at $7.70 for pensioners and $25 for others. The main cost of the scheme is this difference between the wholesale and retail price.

“The Australian government is in a strong position to resist the US tariff threat because Australian company CSL, the main exporter to the US, exports mainly blood products which are exempt from the tariff, and CSL also already has investments in the US.

“The Australian government should not agree to a 25% rise in the wholesale price of medicines as the British government has done This is simply enriching pharmaceutical companies who are already amongst the most profitable in the world. The total annual cost of the PBS is $22.586 billion. A 25% wholesale price increase could mean $5.6 billion less to spend on hospitals and public health when the budget is already stretched.

“The government should continue to resist this blackmail from the US government and the big pharma industry.”

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