Both the Government and the Opposition have announced they will cap the cost of medicines under the Pharmaceutical Benefits Scheme (PBS) at $25.
The policy, first announced by the Government and matched by the Coalition, will come into effect after the federal election — due by 17 May.
It comes a week after a group of American pharmaceutical giants accused Australia of “egregious and discriminatory… Government price controls“.
PBS
Under the PBS, the Government subsidises a range of prescription medicines for any Australian resident with a Medicare card.
The independent Pharmaceutical Benefits Advisory Committee (PBAC) recommends which drugs are listed — currently, there are more than 900.
According to analysis by the Australian Institute of Health and Welfare, 335.8 million prescriptions were supplied under the PBS in 2022/23.
Price cap
Under the policy, the maximum cost of PBS-listed medicines would be reduced from $31.60 to $25.
The Government said that if it is re-elected, the cost cap will take effect from 1 January 2026.
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The maximum price for pensioners and people with concession cards is set at $7.70 until 2030.
Health Minister Mark Butler said: “The last time Australians paid no more than $25 for a PBS medicine was over 20 years ago.”
Coalition
The Coalition has promised to match the Government’s $25 PBS policy if elected in May.
In a statement, Shadow Health Minister Anne Ruston said: “It has never been more important to ensure Australians have affordable access to essential medicines and treatments.”
Ruston pointed to Australian Bureau of Statistics data showing nearly one in 10 people did not buy, or delayed buying, medication due to cost in 2023/24.
U.S.
The announcement comes a week after U.S. lobby group Pharmaceutical Research and Manufacturers of America (PhRMA) accused Australia of “unfair and non-reciprocal trade practices” that threaten the U.S. pharmaceutical industry.
PhRMA encouraged U.S. President Donald Trump’s “robust” policy in response to “unfair” trade practices.
Analysts have suggested this means PhRMA is encouraging tariffs on Australian pharmaceuticals. Trump has already imposed tariffs on Australian steel and aluminium.
