Australians will pay no more than $25 per script for certain medicines from next year under a federal government plan to lower prices.
From January 1, the maximum amount patients would pay for prescription medicines listed on the government’s subsidy scheme will be reduced from $30 to $25, with both of Australia’s major parties confirming the move if elected.
Four out of five Pharmaceutical Benefits Scheme medicines would become cheaper, saving Australians $200 million every year and reducing the program’s patient cost cap to its lowest level in two decades.
“Cheaper medicines are good for the hip pocket and good for your health,” Health Minister Mark Butler said.
The $689 million proposal will be included in the federal budget, to be handed down on Tuesday, and is part of Labor’s broader platform to improve Australia’s healthcare system.
“With cheaper medicines, more free GP visits and a stronger Medicare, we say to Australians: we’ve got your back,” Prime Minister Anthony Albanese said.
The Pharmacy Guild of Australia said that if Labor is re-elected, and the policy is implemented, prescription costs will fall to the lowest in 20 years.
“If this action had not been taken, Australians would be paying up to $50 per script in 2026,” national president Trent Twomey said.
In response, the opposition matched the government’s plan.
“We will lower the PBS co-payment to $25 and continue our longstanding policy of listing all approved and recommended medicines on the PBS – and in a timely manner,” health spokeswoman Anne Ruston said in a statement on Thursday.
Opposition Leader Peter Dutton said the coalition supported the plan and had gone to the last election with a similar policy.
“We support affordable medicines,” he told 2GB radio on Thursday.
“It’s good for prevention, it’s good for people to have well-managed medication programs, and you get better health outcomes in the system.”
However, the entire medicine subsidy program could be under threat after the US president threatened to expand his tariff regime.
According to Treasury estimates, Donald Trump’s 25 per cent tariffs on all steel and aluminium imports are expected to directly impact Australia’s economic output by less than 0.02 per cent by 2030.
While the PBS has unanimous support in Australia, big US pharmaceutical companies resent not being able to extract maximum profits from Australians for their essential medicines.
The Pharmaceutical Research and Manufacturers of America (PhRMA), a peak lobby group representing US pharmaceutical companies, wrote to President Donald Trump calling for him to add Australian medicine manufacturers to his tariff hit list.
Health Minister Butler ruled out allowing the PBS to be used as a bargaining chip in tariff discussions, saying it wasn’t the first time Big Pharma had pushed against Australia.
“Their interest is in selling medicines at top dollar,” he said.
“Our interest is in making medicines cheaper for Australians. We have to make it crystal clear as a government that we will not negotiate over the PBS. We will not negotiate over cheaper medicines.”
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