Anthony Albanese election eve pledge to cut PBS medicines to $25 in the March 25 budget

Anthony Albanese will lower the cost of medicines to no more than $25 in an election-eve play for millions of votes, as the government lifts its cheaper medicines funding to almost $10bn since 2022.

Prime Minister Anthony Albanese, with Phuong Le and her baby Emma Nguyen, visiting Rochedale Village Doctors in Brisbane. Photo: Steve Pohlner

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Anthony Albanese will lower the cost of medicines to no more than $25 in an election-eve play for millions of votes, as the government lifts its cheaper medicines funding to almost $10bn since 2022 on top of tens of billions of dollars spent on hospitals, pharmacists and Medicare.

In addition to pre-election ­announcements including $644m for new urgent care clinics and the $8.5bn Medicare package, the Prime Minister will spend $689m over the forward estimates in next Tuesday’s budget to lower scripts under the Pharmaceutical Benefits Scheme to $25.

As Mr Albanese frames health as a key plank of his re-election campaign and promotes cheaper medicines as a cost-of-living relief measure, the policy improves on Labor’s 2022 election pledge to lower the maximum price for PBS medicines from $42.50 to $30.

After making the largest cut to the cost of PBS medicines by ­reducing the general patient co-payment in January 2023, Health Minister Mark Butler in January froze indexation increases on medicines at $31.60. The government says reducing scripts to $25 will save consumers more than $200m a year and reduce costs of four out of five PBS medicines.

With up to 20 million Australians eligible for PBS scripts, the cut to medicine costs adds to Labor’s big health spends in the budget, including a record $33.91bn on state and territory public hospitals in 2025-26 after the Albanese government in February lifted commonwealth funding by $1.7bn.

As the nation faces a decade of deficits, the government has spent a combined $9.1bn on cheaper medicines packages in Jim Chalmers’ last three budgets.

The government last year also pumped an additional $3bn into a new $26.5bn five-year community pharmacy agreement after striking a deal with the Pharmacy Guild of Australia to end its campaign against Labor’s 60-day ­dispensing policy. Labor’s boost to the PBS comes as the US pharmaceutical industry lobbies Donald Trump’s top trade tsars to apply strict reciprocal tariffs against Australia over the $18bn scheme.

The US President has previously warned he was likely to impose tariffs of 25 per cent or more on pharmaceutical imports to the US, with Australian pharmaceutical exports to the US last year valued at $1.9bn.

Mr Albanese and Labor have prioritised cheaper medicines since taking power. Picture: Dan Peled / NewsWire

In a March 11 submission sent to US trade representative Jamieson Greer, the Pharmaceutical Research and Manufacturers of America said the PBS was among the world’s most “egregious and discriminatory” economic barriers and should be targeted under Mr Trump’s widening trade war.

Mr Albanese, whose mammoth $8.5bn Medicare election pledge last month was immediately matched by Peter Dutton’s $9bn commitment, said “cheaper medicines is another way we are helping with the cost of living, while putting downward pressure on inflation – our No.1 focus”.

“With cheaper medicines, more free GP visits and a stronger Medicare, we say to Australians: we’ve got your back,” he said.

Mr Albanese, who is putting health at the centre of his pre-election campaigning in Brisbane this week, on Wednesday said “one of the big issues this campaign will be about is healthcare”.

After spending recent months travelling to Labor-held seats under a defensive strategy, Mr ­Albanese has switched to offence since arriving in Queensland on Tuesday. The Labor leader has campaigned in the LNP-held seats of Bonner, Longman and Hinkler, and the Greens-held seats of Griffith and Brisbane.

Under Labor’s new cheaper medicines plan, a re-elected Albanese government would pass legislation and commence $25 maximum PBS scripts from January 1 next year. The government has already introduced 60-day prescriptions and reduced by 25 per cent the number of scripts a patient must fill before the PBS safety net kicks-in.

Ramping up Labor attacks on Mr Dutton over his record as health minister, Mr Butler said the Opposition Leader had “tried to make medicines cost more, not less”. “The last time Australians paid no more than $25 for a PBS medicine was over 20 years ago. Cheaper medicines are good for the hip pocket and good for your health,” Mr Butler said.

“In opposition, Peter Dutton and the Liberals voted to block cheaper medicines six times. The contrast this election is clear: cheaper medicines with a re-elected Albanese government, or the frankly terrifying legacy of Peter Dutton, who wants medicines to cost more, not less.”

Government analysis claims that Labor’s cheaper medicines measures have saved patients $1.3bn since July 2022 across 178.2 million cheaper scripts. The analysis says new patient savings from the $25 co-payment would be $786m. Case studies provided by the government included examples of drugs used by patients for menopause, diabetes, juvenile arthritis, ADHD, heart failure and stroke prevention. Pensioners and concession cardholders continue to benefit from a freeze to the cost of their PBS medicines, which was fixed at its current level of $7.70 until 2030.

The PM has been campaigning in Coalition-held seats in Queensland. Picture: Dan Peled / NewsWire

After failing to win exemptions from Mr Trump on tariffs imposed on Australian steel and aluminium, there are growing fears the Trump administration could expand tariffs to other exports including pharmaceuticals and beef. The peak US medicines lobby last week told Mr Greer that “the Australian government employs pricing policies that do not appropriately recognise innovation, such as using the lowest-cost comparator when setting the prices of new medicines as well as statutory price reductions and subsidy caps”.

“PBAC (Pharmaceutical Benefits Advisory Committee) creates significant barriers to listing new medicines on the Pharmaceutical Benefits Scheme. PBAC conducts biased health technology assessments … then values health and longevity gains based on low monetary values that are designed to demand excessive discounts.”

Both Mr Butler and opposition health spokeswoman Anne Ruston have said the PBS will not be on the table in any tariffs negotiations with Mr Trump. The government last year announced a $4.3bn cheaper medicines package in the 2024-25 budget, which included $3.4bn for new medicines added to the PBS, $318m for freezing PBS co-payments and $151.1m to increase access to dose administration aids.

In the 2023-24 budget, the government allocated $2.2bn for new and amended listings on the PBS to ensure affordable access to new medicines. In the 2022-23 budget, the government announced a $2.6bn cheaper medicines package, which included $787.1m to reduce the PBS general co-payment from $42.50 to $30, $327.7m to provide an additional 71,000 people with type 1 diabetes access to subsidised continuous glucose monitoring, $22.8m to extend the listing of oral Covid-19 antiviral treatments on the PBS and $73.9m for Monkeypox vaccines.

Visiting the Rochedale Village Doctors clinic in Brisbane on Wednesday, Mr Albanese said “we do not need an Americanisation” of health”. “What we need to do is to look after each other in the way that Australians do. One area of pride that Australians have is our Medicare system and the fact that when you are sick, it’s not what your bank balance is that matters. It’s whether you can get the care that you need and you get the same care regardless of who you are.”