Big pharma calls out Australia’s ‘freeloading’ on US medicine

American pharmaceutical manufacturers have ramped up pressure on Donald Trump to take action against Australia over its $18bn federal medication subsidy scheme.

Foreign Minister Penny Wong speaks at a Quad meeting at the US State Department in Washington. Picture: AP

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US pharmaceutical manufacturers have ramped up pressure on Donald Trump to take action against Australia over its $18bn federal medication subsidy scheme, as Anthony Albanese pushes to secure an exemption from the US President’s tariff ­regime.

The powerful US pharmaceutical lobby has lashed Australia for engaging in “unfair and non-­reciprocal trade practices” by subsidising medicine under the Pharmaceutical Benefits Scheme, and short-changing US drug developers for their products.

In response to a call from Mr Trump’s trade representative for input on the impact of nations “freeloading on American-­financed innovation” in the ­medical sector, the Pharmaceutical Research and Manufacturers of America has accused Australia of setting prices too low.

Ahead of the reintroduction of Mr Trump’s “liberation day” tariffs on July 9, the PhRMA has urged Mr Trump to “leverage ongoing trade negotiations” to combat practices that force Amer­icans to pay more for medicines and suppress the price overseas.

“Australia undervalues new innovative medicines by setting prices based on older inferior medicines and generics and through use of low and outdated monetary thresholds per year of life gained from clinically proven treatments,” the PhRMA said.

“When recommending coverage of new medicines, the Pharmaceutical Benefits Advisory Committee examines a broad group of existing treatments and then selects the medicine with the lowest price as the comparator, even if that medicine is seldom used versus newer therapies.

“In addition, government assessments often restrict access to a small subset of the patient population for which the regulator determines the product to be safe and effective and additionally create considerable patient access delays through unnecessary data requirements and other administrative hurdles”.

The push comes as Foreign Minister Penny Wong denied Labor’s window to secure an ex­emp­tion may close before the 90-day pause on Mr Trump’s “reciprocal tariffs” expires next week, following her trip to Washington where she met with trade representatives.

“I made in the meeting the same point we’ve made publicly,” Senator Wong told Channel 7. “We have a free-trade agreement with the US. That agreement assures the US of entry into the Australian market without tariffs.

“We will continue to seek the application of that free-trade agreement for Australian goods and services entering the United States.”

Australian Medical Association president Danielle McMullen backed the Albanese government’s repeated declarations the PBS was not up for negotiation, calling the scheme the “most important tool in ensuring universal access to essential medicines”.

“It is a practical model of how a modern healthcare system can support innovation without compromising affordability, and an excellent example of our government working hard to protect taxpayer dollars while making sure we have access to a wide range of medications,” Dr McMullen said.

Medicines Australia chair Sue MacLeman said the US pharmaceutical sector had been consistent in its criticism of the nation’s medication scheme, and called for reforms to health technology subsidies to be accelerated to speed up patient access.

“From our position, we are opposed to tariffs, and we certainly support the free-trade agreement, and that being the mechanism by which we have these conversations,” she said.

“An important point for us is that this industry in Australia does support the PBS, and knows that it’s very important for patient access to medicines.”