Health Minister Mark Butler is planning to speed up medicine approvals as US President Donald Trump threatens to put tariffs of up to 250 per cent on pharmaceutical products, which could affect $2 billion worth of Australian exports.
Butler said Trump’s latest threat would not change the discount Australians received on medicines through the Pharmaceutical Benefits Scheme, but revealed he would get advice within days about accelerating the approvals process for new drugs in Australia – a key issue that US pharmaceutical giants have raised with Trump.
The Trump administration has complained about other countries offering cheaper medicines than the US.Credit: Michael Howard
Speeding up the timeframe for US medicines to land on pharmacy shelves could improve the Australian government’s standing with the Trump administration, although it does not deal with the White House’s bigger concern that Americans pay more for medicines than citizens of other countries.
Trump’s anger with what he called “foreign freeloading nations” prompted him to threaten tariffs of up to 250 per cent on drug imports this week.
Butler said it was a “a very big threat”. “It’s one we’re working very hard to engage with the Americans on,” he said on Thursday.
“The numbers are jumping around … They were 200 per cent a couple of weeks ago, and now they’re 250 per cent potentially. They are very, very big tariffs.
“We are making the case very strongly, but I’m not going to pretend that the US administration doesn’t appear to be pretty serious about this.”
Australia’s PBS – under which the government subsidises drugs and Australians can buy expensive medicines for a maximum price of $31.60, soon to become $25 – has been brought up repeatedly during Trump’s trade wars as US pharmaceutical companies push the president to punish countries that limit their market access.
The big drug companies say the PBS delivers a hit to their potential profits because they are forced to negotiate with the Australian government, which pushes them to offer the lowest possible price. They also say the PBS takes too long to go through its process of deciding to approve medicines and, in doing so, delays the arrival of their products on Australian pharmacy shelves.
Medicines Australia, the nation’s peak pharmaceutical industry group, also takes issue with the approvals process, claiming it takes an average 466 days for new drugs to become subsidised after being approved for use. In other countries, it says, this process can be completed in 90 days.
Butler said he agreed that medicines should get into the Australian system more quickly, but blamed the complexity of policy reform for the delays in acting on the issue, which he first commissioned a review into in 2022. The review delivered 50 recommendations in May 2024.
“I’m expecting a report this week or next week on ways in which we can implement a series of recommendations to make our medicines approval system quicker,” Butler told the ABC on Thursday.
“We’re living through this turbocharged period of discovery that’s bringing more and more new medicines. So, making sure we can assess them and approve them very quickly ... is something I’ve said is a real priority for us this term.”
Trump’s threat has added impetus for Butler to act quickly on the longstanding issue. In July, the Albanese government also changed rules that effectively prohibited US beef exports into the country.
The government said the move was not connected with trade talks, but the Trump administration celebrated it as a win for the president’s tariff policies.
Last week, Trump told pharmaceutical firms to negotiate harder with other countries on drug prices. In a letter to the bosses of 17 drug companies, he warned that high-income nations could not be offered cheaper prices than the US.
Then this week, Trump told CNBC: “We’ll be putting an initially small tariff on pharmaceuticals, but in one year, 1½ years maximum, it’s going to go to 150 per cent, and then it’s going to go to 250 per cent, because we want pharmaceuticals made in our country.”
Butler said the tariffs would have the greatest impact on Australian multinational firm CSL, based in Melbourne, which makes blood and plasma products and represents the bulk of Australia’s medical exports to the US.
“America exports more pharmaceuticals to Australia than we do to them. They do it on a tariff-free basis. That served both of our countries very well, and we’ll continue to argue the case for a continuation of free trade in pharmaceuticals,” Butler said.
“But as the [prime minister] said, to the extent that this is motivated by big pharma companies seeking to lobby the US administration to water down the protections of our PBS, it’s simply not up for negotiation under our government.”
A CSL spokesman pointed to its significant presence in the US, where 60 per cent of its workforce lives, and said the company had been making its case to the US administration.
“We are aware of recent remarks by President Trump about potential tariffs on pharmaceuticals. We will continue to monitor the situation closely,” he said.
Prime Minister Anthony Albanese said: “We support the PBS. It is part of who we are as Australia. We’re a sovereign nation, it’s something that has produced massive benefits for Australia. It’s a proud Labor creation, and we are building on it.”
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