Butler defends PBS ahead of high-stakes negotiations with the pharma sector

Federal Health Minister Mark Butler has mounted a defence of the Pharmaceutical Benefits Scheme (PBS) amid growing criticism that pricing battles are keeping life-extending medicines out of patients’ reach.

In an opinion piece, Minister Butler described access to medicines as “fundamental” to Australia’s national identity, arguing that “the PBS must evolve, but it cannot lose sight of its core purpose: affordable, reliable access to medicines for all Australians.”

Behind the government’s message of sustainability is escalating controversy where a growing number of medicines recommended by the Pharmaceutical Benefits Advisory Committee (PBAC) are failing to reach patients after price negotiations collapse. While the PBS subsidises around 950 medicines, an estimated 3,000 additional medicines that have been approved by the regulator are not reimbursed.

The latest flashpoint is Tukysa (tucatinib), a treatment for women with HER2-positive metastatic breast cancer, including those with brain metastases. Despite receiving a positive PBAC recommendation in November 2025, the medicine will not be subsidised through the PBS after negotiations between Pfizer and the Federal Government failed to reach agreement on price.

The dispute has intensified scrutiny of Australia’s approach to pharmaceutical pricing, with critics arguing that regulatory approval is becoming disconnected from real-world access.

Yet, Minister Butler defended the PBS saying, “In Australia, we only fund new medicines when the evidence shows they genuinely work and offer good value for taxpayers.”

The Health Minister pointed to recent PBS listings as evidence that the Health Technology Assessment (HTA) system still delivers major breakthroughs, highlighting cancer immunotherapies and the May listing of Carvykti (ciltacabtagene autoleucel) which would otherwise cost patients around $200,000.

“To me, this is the PBS at its best,” he said, failing to acknowledge that the CAR T therapy Carvykti received Therapeutic Goods Administration (TGA) registration three years earlier, before PBS access was secured.

The pharmaceutical sector argues that Australia’s tightly controlled pricing model does not reflect the value of highly specialised medicines, particularly as treatments become more personalised and expensive.

Minister Butler’s response reframes the controversy as a global pricing problem, not a domestic failure.

“Global price compression can affect whether companies bring new medicines to markets like Australia,” stated Minister Butler. “This challenge is not ours alone. We are closely watching how countries like the UK, Europe and Japan are responding to Most Favoured Nation (MFN) [pricing policy] as we determine the best approach to protect and defend the PBS.”

A notable part of Minister Butler’s opinion piece is that he does not dismiss industry arguments. However, he maintains taxpayer value must remain the priority.

“Medicines policy is economic policy. When someone avoids a hospitalisation, reduces complications, or returns to work sooner, the benefits ripple well beyond the health system,” he said.

Yet he warned, that while the “PBS must evolve” it must be “sustainable” and “remain nimble enough to evaluate value, affordability and access in a way that continues to protect patients while also protecting the integrity of the system.”

Against this backdrop, the pharmaceutical industry is shaping the policy narrative on the HTA reforms ahead of high-stakes negotiations with the Federal Government, as Medicines Australia prepares to engage Minister Butler on 1 July at the commencement of Strategic Agreement discussions.

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