Bitter pill
Australia has had to defend its Pharmaceutical Benefits Scheme against pressure from US drug companies before. But this time a range of other local industries are also in the firing line.
Back in 2003, when the Howard government was negotiating the US-Australia Free Trade Agreement with the Bush administration, the Pharmaceutical Benefits Scheme (PBS) became a political hot potato.
Despised by American pharma companies for decades for aggressively negotiating prices and refusing to pay a premium for brand-name drugs, the PBS had long been seen as a threat to their global pricing strategies.
But even a committed economic dry like John Howard knew that the PBS was politically untouchable in Australia. In the end, US negotiators only secured minor procedural concessions around transparency, leaving the core price controls basically intact.
But resentments die hard. That’s the lesson we’ve learned this week, amid the flurry of submissions from US industry to a policy review by Donald Trump’s trade chief — some of which point the finger squarely at Australia. The pharma industry pleaded for Trump to impose reciprocal tariffs on Australia over the PBS. Tech giants lobbied for the same to undermine the news media bargaining incentive. American cattle farmers and winemakers are making noise too.
