Carrick Ryan
Trump is coming for Australia's Pharmaceutical Benefits Scheme (PBS). This is incredibly important, so please ensure you understand what is at stake.
To start with, the PBS is a program funded by the Australian government to make prescription medicine affordable by essentially allowing Medicare to buy medication wholesale at a negotiated price.
If a medication is deemed both effective and cost-effective compared to existing drugs, the Australian government will negotiate a price directly with the pharmaceutical company. Because the government has enormous purchasing power, they can negotiate a far fairer price than anyone could attain as an individual.
Once a price is agreed, it is added to the PBS and Medicare subsidises the cost so no Australian pays more than $31.60 per script (or $7.60 for concession card holders).
This means that even for medication that costs Americans hundreds and sometimes thousands of dollars, every script is always never more than $31.60 for Australians.
It's one of the pillars of our public health system that ensures no Australian is excluded access to healthcare because they can't afford it.
So what's the issue?
US pharmaceutical companies have a number of complaints about the PBS, but at its core is a concern that if Americans see how much less Australians are paying for their medication, even before the Medicare subsidies, they could demand similar prices there.
The argument is that pharmaceutical companies need this revenue to fund the research and development to create new drugs. Which sounds reasonable... until you look at the numbers.
In 2023, Pfizer only spent 16% of its revenue on research and development. In fact it spent $3 billion more on marketing and administration than it did on research and development, and still made $2.4 billion profit.
In that same year, Johnson and Johnson spent $15.4 billion on research and development, $24 billion on marketing and administration, and still made a profit of $13.3 billion.
This is replicated throughout the industry, with billions in profits being passed on to shareholders rather than the apparently crucial development of the next wonder drug.
Additionally, a study by the National Academy of Sciences found that every single drug approved by the FDA between 2010 and 2019 had received substantial public funding, with a total of $230 billion in public sector funding contributing to these drugs.
The most important thing to remember here is that US pharmaceutical companies are still making a sizeable profit from the Australian market. Every price negotiated through the PBS has to be considered fair and reasonable to both parties. In the 2022–23 financial year, the Australian government spent $16.7 billion on PBS medicines, the Australian people then spent an additional $1.6 billion on top of that. This is from a comparatively tiny market of only 25 million people.
We don't know exactly how much money the big US pharmaceutical companies make in Australia, but we do know our own largest pharmaceutical company, CSL Limited, made a profit of $2.6 billion last year, so there is clearly plenty of money to be made here.
I genuinely see the utility in ensuring the pharmaceutical industry is lucrative to encourage further innovation, but this has to be balanced against the well being of individuals desperately seeking relief from crippling, chronic, or even terminal illness. The PBS allows us to get that balance right by ensuring companies still make profits without exploiting consumers.
If Trump attempts to turn the screws on this, it needs to be seen for what it is; an attack on our sovereignty, our values of fairness, and our way of life. This cannot be up for negotiation, and Albanese needs to be left in no doubt what the Australian people expect of him.
If Trump chooses to attack the fundamental right of Australians to access affordable healthcare then this is an attack on the Australian people. We must, therefore, seriously review the status of the US as an "ally". At this point, the viability of hosting troops, intelligence officers, and military installations from an increasingly hostile adversary must be reviewed.
Those of you who have followed my page for a while understand that I don't say that lightly. This is not a flippant comment, it is a clear red line, and every Australian needs to ensure we are united on where this line is.
Do not touch our PBS.
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