Medicines Australia escalates pressure on government over ‘missing medicines’

Medicines Australia has ramped up its offensive against the Albanese Government’s implementation of the Health Technology Assessment (HTA) Review reforms, publishing a third report that strikes at the centre of an increasingly fraught policy and funding dispute.

The latest report, Bitter Pill, examines 18 medicines that received positive recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC) but have not been launched or supplied on the Pharmaceutical Benefits Scheme (PBS). Manufacturers have walked away from the Australian market because of poor commercial viability, prolonged approval timelines and intensifying global pricing pressures.

The report is the latest instalment in an intense advocacy effort by Medicines Australia. It follows Access Denied released in May, which argued the PBS is failing to fund access to some of the world’s most cutting-edge medicines, and The Real Value of Innovative Cancer Treatments published in June, which framed productivity gains as a key lever in the push for HTA reforms.

Medicines Australia CEO Elizabeth de Somer said the consequences of Australia’s medicines policy is becoming increasingly difficult to ignore.

“I think if the public knew just how many innovative medicines are now bypassing Australia because of an outdated process, they would be justifiably alarmed,” de Somer emphasised. “The time for Government to see higher spending on innovative medicines as a cost and not as a long-term investment must finish.”

Federal Health Minister Mark Butler has 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.”

However, Medicines Australia argues the financial trajectory underpinning innovative medicines tells a different story.

There are approximately 3,800 prescription medicines approved by the Therapeutic Goods Administration (TGA). Of these, only around 25% are listed on the PBS.

Despite the 2022–27 Strategic Agreement between the government and Medicines Australia stating an expectation of increased “…real expenditure on new medicines”, net spending on innovative medicines fell by 3% in real terms (inflation-adjusted and rebate-adjusted) in 2024–25. Net investment in innovative medicines has also declined as a share of GDP, falling from 0.26% in 2015–16 to 0.20% in 2024–25, while its share of the health budget has contracted from 6.2% to 4.1% over the same period.

The decline has occurred despite pharmaceutical companies paying a growing share of rebates to government. Rebates reached 35% in 2024–25, up from 20% in 2017–18. Yet the pharma industry argues those funds are not transparently ringfenced to improve medicines access, instead flowing back into consolidated revenue.

The commercial equation has become even more challenging as global pricing shift, with the United States’ Most Favoured Nation (MFN) pricing policy, reverberates across international markets.

“The pricing environment for medicine is quite dynamic right now,” said Minister Butler. “That’s largely being driven by changes in the US pricing system… It’s not the only element though, there are reference pricing changes being made by other significant players in the world market, including China.”

Pharmaceutical executives say those global pricing pressures are directly influencing investment decisions in Australia.

“Accepting low pricing in Australia now has a substantial impact on business sustainability because accepting low pricing in Australia means accepting low pricing in many larger markets,” said a local affiliate General Manager of a pharma company.

“…the lack of commentary or commitment from the Australian government or policy makers is very frustrating as we are caught between divergent/opposing local & global practices,” said another senior leader.

The consequences, Medicines Australia argues, are already evident. Only 26% of new medicines available in comparable OECD countries are funded in Australia.

Minister Butler, however, has 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 clash comes as negotiations over the next Strategic Agreement between the Federal Government and the pharmaceutical industry enter a high-stakes phase. With HTA Review reforms now folded into those confidential negotiations, Medicines Australia is intensifying pressure on the government while patients are being promised the illusion of inclusion in its implementation.

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