PBS will never be subject to negotiation: Albanese rejects US pharma pressure at APP

Prime Minister Anthony Albanese has drawn a firm line in the sand, declaring that Australia’s Pharmaceutical Benefits Scheme (PBS) “will never be the subject of negotiation”, amid mounting pressure from US pharmaceutical lobby group.

The Pharmaceutical Research and Manufacturers of America (PhRMA) has urged the US President Donald Trump to impose tariffs on pharmaceutical imports from Australia, arguing that the PBS model is eroding their profits.

“It’s not surprising that there is a push and some opposition to the PBS, but let me be very clear and explicit – the PBS is not for sale,” Prime Minister Albanese asserted during his speech at the Australian Pharmacy Professional (APP) conference yesterday.

“Under Labor, under my leadership, it is not and will never be the subject of negotiation. It is a monument to the fairness at the heart of Australian life and we don’t negotiate our values.”

Opposition Leader Peter Dutton echoed Albanese’s position, stating that he would also protect the PBS, calling it the “envy of the world.”

But behind the political unity, the battle over drug pricing is far from over. The US pharmaceutical industry, accustomed to a fragmented and profit-driven healthcare system, views Australia’s model as a direct threat to its bottom line. Unlike the PBS, which ensures price controls and subsidised access to medicines, the US system remains a convoluted mix of government agencies, health insurers, and private corporations, where patients often bear exorbitant costs.

The PBS itself has a long and hard-fought history. Before its creation, Australians had to pay out-of-pocket for medicines, with only limited relief provided by public hospitals and Friendly Society Dispensaries. While few effective medicines existed in the early 1900s, the discovery of insulin and penicillin in the 1920s made access to life-saving treatments critical.

“A rare successful referendum in 1946 changed that, enabling the National Health Act 1953 to pass. This established the PBS as we know it today,” explained Associate Professor Bonny Parkinson, Macquarie University Centre for the Health Economy.

Today, the PBS subsidises over 930 medicines and 5,164 brands, with the government investing $17.7 billion in the scheme in 2023-24. However, it is not without its flaws.

“No system is without its drawbacks and risks. The PBS’s flaws include: limited patient involvement in the process, the high frequency of re-submissions and delays to PBS listing, companies being unwilling to submit off-patent medicines for PBS listing due to high costs and low rewards, and the ongoing lack of high-quality clinical evidence about medicines to treat rare diseases and certain patient populations, such as children,” said Associate Professor Parkinson.

While political leaders claim bipartisan support for the PBS, the aggressive push from US pharmaceutical lobbyists raises serious questions. How long before global pressure forces Australia into difficult trade-offs? And will the government’s defiant stance hold if economic tensions escalate?

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