Australians may face reduced access to vital medications following Donald Trump‘s recent announcement aimed at lowering drug prices in the United States. On September 29, 2023, President Trump signed an executive order instructing American pharmaceutical manufacturers to reduce their prices. The order stipulates that if voluntary compliance does not lead to significant price reductions, the administration could introduce a rule to implement “most-favoured pricing,” which would align US drug prices with those in other nations.
This pricing strategy raises concerns for Australia, as it could discourage pharmaceutical companies from supplying their products to the Australian market. According to Elizabeth de Somer, chief executive of Medicines Australia, if US drug prices are benchmarked against Australian prices, it could severely impact the availability of new and innovative medicines in Australia.
De Somer explained that companies are already delaying the launch of new treatments due to uncertainty in the US market. “It’s really those new medicines that may be life-changing and life-saving for Australians that may get delayed coming here,” she stated. She specifically highlighted the potential delays in accessing new cancer treatments, which could be critical for patients in need.
In addition to the pricing order, Trump has announced a 100% tariff on branded or patented pharmaceutical imports, effective immediately unless companies establish manufacturing plants in the US. Pharmaceuticals represent a significant export sector for Australia, valued at $2.2 billion annually. De Somer emphasized that the pricing proposal poses a greater threat to Australian patients’ access to medicines than any tariffs might.
“Tariffs would negatively impact US consumers’ access to medicines, likely increasing prices in the US,” she noted. “But Australians may miss out on new medicines altogether if the reference pricing policy is enforced.”
In light of these developments, Australian Prime Minister Anthony Albanese has scheduled a face-to-face meeting with Trump on October 20, 2023, during his attendance at the United Nations General Assembly. De Somer expressed confidence that the Prime Minister would advocate for free, fair, and open trade, underscoring that tariffs are not in the best interest of either nation.
As the situation evolves, the implications of Trump’s drug pricing strategy could significantly reshape the landscape for pharmaceutical access in Australia, potentially leaving many Australians without critical treatments.
