Trump’s latest move could change medicine prices—here’s what you need to know
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In recent weeks, Australia has been navigating some tense discussions around the Pharmaceutical Benefits Scheme (PBS), but there's another issue quietly bubbling under the surface—one that could have a significant impact on the availability and cost of medicines.
What might seem like a small paragraph in a trade report could potentially reshape the way Australians access affordable generic drugs.
Let’s dive into the details of what’s at stake and how this could affect Australia’s health budget, medicine prices, and your access to more affordable treatments.
In recent weeks, Australia's Pharmaceutical Benefits Scheme (PBS) has been the centre of attention due to challenges from the US, but another issue quietly emerged, threatening the supply and affordability of medicines.
On page 19 of a report from the Trump administration, a paragraph caught the eye of healthcare advocates, addressing Australia's access to generic drugs—those cheaper alternatives that hit the market once a patented drug expires.
The US expressed concerns over Australia’s system, arguing that drug companies were not given enough notice about when generics would be introduced.
In the US, pharmaceutical companies can delay generic versions for 30 months, but Australia's system doesn't allow such delays.
Australia's process, which requires drug companies to provide a certificate to the Therapeutic Goods Administration (TGA) stating either that a product won’t infringe on a patent or that they have notified the patent-holder, is at odds with the US model. The US views this as a trade barrier.
In Australia, once a generic drug enters the PBS, the price of all versions of the drug drops by 25%, including the branded product.
US companies argue that this sudden price drop harms their interests, especially when they aren't given early warning about a generic launch.
If the US continues to push for changes to Australia’s system, the country could face delays in accessing cheaper generics, resulting in higher costs for the government.
Australia’s system was initially introduced to comply with the Australia-US Free Trade Agreement (AUSFTA), but the US has long argued it puts their pharmaceutical companies at a disadvantage.
The US patent notification system allows drug companies to delay generics for up to 30 months, giving them more time to launch legal challenges.
In contrast, Australia’s system allows generics to be listed on the PBS quickly, ensuring lower prices for consumers sooner.
Prime Minister Anthony Albanese had previously stated that he would not use the PBS as a bargaining chip in trade negotiations, yet the pressure to change the system remains.
Medicines Australia, the industry body representing Australian subsidiaries of major global drug manufacturers, has expressed concerns about the potential for penalties and compensation for patent-holders who take legal action against generics.
The US, however, views Australia’s system as creating uncertainty for patent-holders and preventing early resolution of patent disputes before generics hit the market.
If Australia bows to the US's demands, it could result in delayed access to generic drugs, meaning the government would have to continue paying for more expensive branded versions.
More generics on the PBS would mean lower prices for consumers, and over time, the competition would bring prices down even further, potentially below the PBS co-payment.
The introduction of generic drugs has always been an essential part of Australia's efforts to make medicines more affordable, but this new pressure from the US could undermine those efforts.
Australia's quick approval of generics has helped save the government money, but this could change if the US successfully pushes for a delay system similar to its own.
Both major political parties have affirmed they will not compromise on the PBS in exchange for trade deals with the US, but the ongoing negotiations are likely to continue shaping the future of Australia’s drug pricing policies.
In a previous story, we explored how Trump's trade policies are impacting Australia in unexpected ways.
The latest developments on generic medicines are just one example of how his administration is challenging Australia’s policies.
For more insight into the broader trade tensions, check out our coverage of his recent speech on tariffs.
As pressure mounts from the US, could Australia’s access to cheaper generic drugs be at risk? Share your thoughts in the comments below!
What might seem like a small paragraph in a trade report could potentially reshape the way Australians access affordable generic drugs.
Let’s dive into the details of what’s at stake and how this could affect Australia’s health budget, medicine prices, and your access to more affordable treatments.
In recent weeks, Australia's Pharmaceutical Benefits Scheme (PBS) has been the centre of attention due to challenges from the US, but another issue quietly emerged, threatening the supply and affordability of medicines.
On page 19 of a report from the Trump administration, a paragraph caught the eye of healthcare advocates, addressing Australia's access to generic drugs—those cheaper alternatives that hit the market once a patented drug expires.
The US expressed concerns over Australia’s system, arguing that drug companies were not given enough notice about when generics would be introduced.
US challenges Australia’s access to affordable generics. Image source: Instagram/realdonaldtrump
In the US, pharmaceutical companies can delay generic versions for 30 months, but Australia's system doesn't allow such delays.
Australia's process, which requires drug companies to provide a certificate to the Therapeutic Goods Administration (TGA) stating either that a product won’t infringe on a patent or that they have notified the patent-holder, is at odds with the US model. The US views this as a trade barrier.
In Australia, once a generic drug enters the PBS, the price of all versions of the drug drops by 25%, including the branded product.
US companies argue that this sudden price drop harms their interests, especially when they aren't given early warning about a generic launch.
If the US continues to push for changes to Australia’s system, the country could face delays in accessing cheaper generics, resulting in higher costs for the government.
Australia’s system was initially introduced to comply with the Australia-US Free Trade Agreement (AUSFTA), but the US has long argued it puts their pharmaceutical companies at a disadvantage.
The US patent notification system allows drug companies to delay generics for up to 30 months, giving them more time to launch legal challenges.
In contrast, Australia’s system allows generics to be listed on the PBS quickly, ensuring lower prices for consumers sooner.
Prime Minister Anthony Albanese had previously stated that he would not use the PBS as a bargaining chip in trade negotiations, yet the pressure to change the system remains.
Medicines Australia, the industry body representing Australian subsidiaries of major global drug manufacturers, has expressed concerns about the potential for penalties and compensation for patent-holders who take legal action against generics.
The US, however, views Australia’s system as creating uncertainty for patent-holders and preventing early resolution of patent disputes before generics hit the market.
If Australia bows to the US's demands, it could result in delayed access to generic drugs, meaning the government would have to continue paying for more expensive branded versions.
More generics on the PBS would mean lower prices for consumers, and over time, the competition would bring prices down even further, potentially below the PBS co-payment.
The introduction of generic drugs has always been an essential part of Australia's efforts to make medicines more affordable, but this new pressure from the US could undermine those efforts.
Australia's quick approval of generics has helped save the government money, but this could change if the US successfully pushes for a delay system similar to its own.
Both major political parties have affirmed they will not compromise on the PBS in exchange for trade deals with the US, but the ongoing negotiations are likely to continue shaping the future of Australia’s drug pricing policies.
In a previous story, we explored how Trump's trade policies are impacting Australia in unexpected ways.
The latest developments on generic medicines are just one example of how his administration is challenging Australia’s policies.
For more insight into the broader trade tensions, check out our coverage of his recent speech on tariffs.
As pressure mounts from the US, could Australia’s access to cheaper generic drugs be at risk? Share your thoughts in the comments below!
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