Donald Trump has threatened a crackdown on major pharmaceutical companies who fail to sell cheaper drugs to the US, and criticised nations “freeloading on US innovation”.
Trump wrote to 17 pharmaceutical companies, demanding they treat the US as the “most favoured nation” and lower prices of drugs for the US Medicaid scheme, and threatened to use “every tool in our arsenal” to crack down on pharmaceutical giants if they fail to cut drug prices for Americans within 60 days.
In Australia, under the Pharmaceutical Benefits Scheme (PBS), pharmaceutical companies negotiate directly with the department of health on pricing.
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The Australian government has not said whether tariffs or restrictions from the US on pharmaceuticals would affect the PBS.
Pharmaceuticals are already covered under Australia’s existing free trade agreement with the US.
Medicines on the PBS are capped for the public, with the government subsidising the rest of the cost. The government recently announced another drop in the price of prescriptions within the scheme, to $25 per script from 1 January.
“The PBS is not up for negotiation,” a government spokesperson said. “Our government is getting on with the job of delivering cheaper medicines for Australians.”
Labor has said repeatedly that prices wouldn’t rise in Australia.
The health minister, Mark Butler, said on Tuesday the US administration had been changing its position “a lot” on pharmaceuticals.
“It’s still shifting around a bit. I think it’s fair to say our officials are working hard to get a sense exactly of the nature and the timing of any tariffs on pharmaceutical exports,” he told ABC radio.
“Which … is a particular sector or industry that the US administration has been focused on.”
The US pharmaceutical lobby has complained to the Trump administration that the PBS undervalues drugs, and has criticised the long lead time for drug approvals in Australia.
Trump has also threatened countries globally to increase baseline tariffs to 15 or 20%.
The administration’s latest tariff deadline was recently delayed to 1 August. Trump has said countries that did not negotiate a trade deal directly with the US before that deadline – which was set to come into effect on Friday afternoon, Australian time – could face new levies.
On Friday morning in Australia, Trump issued an executive order confirming new tariff deals for several trading partners, as well as revised tariffs for a number of other countries.
Australian goods imported into the US will continue to attract the baseline 10% tariff, under the new tariff regime which will take effect in seven days.
In the executive order, Trump indicated he was open to further negotiations on tariffs for countries he saw as in accordance with his America First agenda.
The opposition has heavily criticised the prime minister for not having sat down with Trump for a meeting since he was elected president.
The two were supposed to meet on the sidelines of the G7 Summit in Canada in June, but the president left early after an escalation in tensions in the Middle East.
