Relief for the pharmaceutical industry as it dodges US tariffs

Australian pharmaceutical companies may have dodged the immediate blow of Donald Trump’s sweeping tariffs on medicines exported to the US, but the broader implications are far from clear.

Australia exported a staggering $1.6 billion in pharmaceuticals to the US, with blood products leading the charge.

Elizabeth de Somer, CEO of Medicines Australia, said “We called for no tariffs and US based pharmaceutical companies called for no tariffs. Australia is a responsible trading partner and the industry here and in the United States will continue to advocate for free trade.”

She added, “We will continue to monitor the prospect of future sector specific tariffs and will support the Australian Government’s efforts to ensure medicines remain tariff free so that they can get on with improving the PBS for Australian patients.”

For biotech giant CSL, the picture is far from straightforward. While CSL manufactures in Australia, Switzerland and Germany, the company’s reliance on the US for much of its revenue makes it vulnerable. Should tariffs on pharmaceutical products kick in, those manufacturing sites will then become of greater concern.

“At this stage pharmaceutical products are not subject to the reciprocal tariffs,” CSL told the ASX yesterday. “CSL is continuing to assess the broader impact of the tariffs and will monitor further announcements by the US Government.”

In the midst of global market downturns and international plans for retaliatory measures against Trump’s tariffs, US Republican Senator Chuck Grassley and Democrat Maria Cantwell have introduced bipartisan legislation to mandate Congressional approval for any new tariffs.

Meanwhile, Medicines Australia continues to push the agenda for the implementation of the health technology assessment (HTA) reform recommendations which are sitting on the Health Minister’s desk.

“Active Australian-led reform of the PBS must be our priority and that of the next Government. Science and medicines have evolved significantly in the 30 years where no meaningful reform has occurred. The system is no longer fit for purpose and patients are waiting too long – on average 466 days when elsewhere in the world the wait may be as low as 60 days,” de Somer emphasised.

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