Speaker 1: From Schwartz Media. I'm Daniel James. This is seven AM.
Speaker 1: Medicines in Australia might be about to get more expensive
Speaker 1: and harder to come by. Australia's Pharmaceutical Benefits scheme, the
Speaker 1: safety net that keeps our prescriptions cheap, has become a
Speaker 1: target of Donald Trump's trade war, and after the US
Speaker 1: President signed an executive order stating the US shouldn't pay
Speaker 1: more for medicines than its peers, drug companies are pausing
Speaker 1: UPBS listings and warning some medicines might never reach our shelves.
Speaker 1: Today's special correspondent for the Saturday Paper, Jason kotsukis on
Speaker 1: how one decision in Washington could leave Australians paying more
Speaker 1: for vital drugs and whether Australia has the leverage to
Speaker 1: do anything about it. It's Thursday, June nineteenth.
Speaker 2: Well, the G seven summit in Canada today will look
Speaker 2: a little more like a G six with Donald Trump,
Speaker 2: as we heard pulling the pin earlier to head back
Speaker 2: to Washington, DC. It means Anthony Alberinezi now has a
Speaker 2: gaping hole in his diary where talks with.
Speaker 1: The Anthony Aberneze was just ghosted by Donald Trump who
Speaker 1: left the G seven summit in Canada before the two
Speaker 1: leaders got a chance to meet.
Speaker 3: Was that expected, Well, it wasn't expected. Daniel V Prime
Speaker 3: Minister's office was very pleased to announce on the weekend
Speaker 3: that they had secured this long anticipated meeting with the US.
Speaker 4: President seriously, and I look forward to tomorrow's meeting, and
Speaker 4: not just with President Trump. It is important to say.
Speaker 3: But perhaps it's not unexpected that Donald Trump would want
Speaker 3: to change the script, and that's what he did, letting
Speaker 3: us all know that he was going to leave the
Speaker 3: G seven early and get back to Washington to keep
Speaker 3: a closer eye on what's happening in the Persian Gulf, where,
Speaker 3: of course Israel has launched a series of attacks on
Speaker 3: Iran's nuclear facilities.
Speaker 4: Now, it's perfectly understandable the decision that he made that
Speaker 4: meant that the meetings were scheduled not just with myself
Speaker 4: but with India.
Speaker 3: It must have blind signed it, Anthony Elbanezi on the
Speaker 3: one hand, But on the other hand, it is understandable
Speaker 3: that Donald Trump would want to be in the situation
Speaker 3: Room at the White House with all of that national
Speaker 3: security establishment of the US government.
Speaker 1: Do we have any idea of whether the two will
Speaker 1: have a chance to get to meet soon.
Speaker 3: We don't. The talk around Parliament House is that the
Speaker 3: earliest they could possibly get back together is on the
Speaker 3: sidelines of the UN General Assembly, which takes place in September.
Speaker 3: I personally don't think it really matters all too much
Speaker 3: if Anthony eberenezid a meeting with Donald Trump or not.
Speaker 3: We know that these meetings can be quite fraught. Donald
Speaker 3: Trump is, of course a very capricious president. He's changing
Speaker 3: his mind all the time, particularly on things like tariff's
Speaker 3: the other big issues. Of course orcas it's an uncertain
Speaker 3: time and I don't think a meeting with Donald Trump
Speaker 3: necessarily locks things down for the rest of Donald Trump's term.
Speaker 1: In offers, one of the main issues if the two
Speaker 1: are to meet for Australia is US tariffs, as the
Speaker 1: Prime Minister fires to get Australia an exemption on those,
Speaker 1: and one specific target of Trump's trade war has been
Speaker 1: Australia's pharmaceutical Benefit Scheme the PBS. So why has this
Speaker 1: scheme become a target?
Speaker 3: Well, the US pharmaceutical industry has long hated Australia's PBS.
Speaker 3: The PBS is a scheme that goes back to the
Speaker 3: nineteen forties in Australia.
Speaker 5: The Pharmaceutical Benefit Scheme covers aver two thousand and five
Speaker 5: hundred different medicines. It helps you make previous prescription medicines affordable.
Speaker 5: In addition, there's a safety in it for people or
Speaker 5: families who need a lot on medicine.
Speaker 3: It's a system that sees the Australian government by vital
Speaker 3: medicines on behalf of Australian consumers, and the Australian government
Speaker 3: negotiates a price directly with the pharmaceutical manufacture for these
Speaker 3: individual medicines. The Australian consumer then buys the drugs, but
Speaker 3: ultimately it's the Australian government that pays for them, and
Speaker 3: the Australian consumer is then charged a flat fee which
Speaker 3: is very different to what US consumers pay. That price
Speaker 3: is heavily discounted to what the same drugs are sold
Speaker 3: for in the United States.
Speaker 6: Why doesn't somebody fate the drug price situation meaning equalization?
Speaker 1: There's a term and.
Speaker 3: On May twelfth, Donald Trump signed an executcutive order to
Speaker 3: try to do something about this. He wants US consumers
Speaker 3: to pay the same that consumers and other countries pay.
Speaker 3: And so ultimately, what that means is that he wants
Speaker 3: US consumers to pay less, but he wants Australian consumers
Speaker 3: to pay more.
Speaker 6: We're subsidizing others healthcare countries where they paid a small
Speaker 6: fraction of what for the same drug that what we
Speaker 6: pay many, many times and more for. And we're no
Speaker 6: longer tolerate profiteering and prase gouging.
Speaker 3: From What Trump's executive order is likely to do is
Speaker 3: take a group of countries, a basket of countries, and
Speaker 3: the US is going to benchmark the prices paid by
Speaker 3: the countries that are in that basket, and then that's
Speaker 3: the benchmark price that US consumers will then pay. What
Speaker 3: that is likely to mean is that Australian consumers will
Speaker 3: pay more and US consumers will pay lets. And I
Speaker 3: think this is a pattern that we see with Donald Trump,
Speaker 3: not just with pharmaceuticals. The whole issue that is driving
Speaker 3: Donald Trump's tariff increases is this idea that the US
Speaker 3: is getting ripped off. You know, if there's one thing
Speaker 3: that Donald Trump hates, it's the suggestion that the US
Speaker 3: is paying more for something that other countries are getting
Speaker 3: at a discount now, given that Prime Minister Anthony Albanezi
Speaker 3: has drawn a line in the sand when it comes
Speaker 3: to the PBS, I think a very difficult conversation is
Speaker 3: likely when the two meet over what the US President
Speaker 3: wants to do when it comes to Australians getting drugs
Speaker 3: cheaper than US consumers get them.
Speaker 1: You've been speaking on drug companies. What have they been
Speaker 1: saying to you about the impact of Trump's order?
Speaker 3: I think this order has created a lot of uncertainty
Speaker 3: about what prices drug companies will receive for the medicines
Speaker 3: they menfacture. From talking to drug companies and also the
Speaker 3: peak industry body medicines Australia, the main impact right now
Speaker 3: is that drug companies are pausing putting new drugs forward
Speaker 3: to be listed on the PBS, and that pause could
Speaker 3: be extended for quite some time, and ultimately it could
Speaker 3: lead to some vital medicines that Australian consumers want and
Speaker 3: need from overseas may not be listed as soon as
Speaker 3: they would like on the PBS.
Speaker 1: After the break, Can the government halt the worst impacts
Speaker 1: of Trump's executive order? Jason, Drug companies are delaying listing
Speaker 1: with the PBS because it could affect their pricing overseas.
Speaker 1: So can you tell me what kind of medications we
Speaker 1: may be missing out on.
Speaker 3: Well, Daniel, I think potentially it's a whole new generation
Speaker 3: of drugs that are coming onto market in countries overseats.
Speaker 3: Take one example, Daniel, don Anamab, a.
Speaker 7: New drug has been held as a turning point in
Speaker 7: the fight against Alzheimer's.
Speaker 8: Now US drug maker Elain Lilly says it's experimental drug,
Speaker 8: d nanomab, can slow down the development of the disease.
Speaker 8: Dananomab has a price tag of more than forty thousand
Speaker 8: dollars a year because it's not yet subsidized by the government.
Speaker 8: It will be considered for inclusion on the Pharmaceutical Benefit
Speaker 8: Scheme midyear, but there are no guarantees now.
Speaker 3: Health Minister Mark Butler revealed last month that the Pharmaceutical
Speaker 3: Benefits Advisory Committee will be considering dnanomab in July.
Speaker 7: There is still a fair way to go, though, to
Speaker 7: determine whether or not this will be reimbursed by the
Speaker 7: federal government, and if so, for which patients.
Speaker 3: Before that drug can be listed on the PBS. Elo
Speaker 3: Lilly's global head Office will have to approve the price
Speaker 3: that is offered by the Australian government. And that's where
Speaker 3: we're seeing the impact of this pause that the global
Speaker 3: head officers of these pharmaceutical manufacturers, that's where the hold
Speaker 3: up is coming because they are saying, let's just hold
Speaker 3: off on approving this price because we might get a
Speaker 3: better price once Donald Trump gets into the act and
Speaker 3: negotiates with Australia about the future of the PBS itself.
Speaker 1: The Prime Minister has said repeatedly that the PPS is
Speaker 1: not upfit negotiation when it comes to negotiations on tariffs
Speaker 1: and what way does Trump want Australia to alter the PBS.
Speaker 1: What regulations are under pressure here?
Speaker 3: Well, he wants the Australian government to pay more for
Speaker 3: the drugs that US companies are making, and he's saying
Speaker 3: the the prices that Australia negotiates are just way too
Speaker 3: low and don't compensate US companies fairly for the research
Speaker 3: and development, the investment that they put into developing these
Speaker 3: new drugs. So US drug companies have long opposed the PBS,
Speaker 3: and Australia's PBS does deliver some of the lowest medicine
Speaker 3: prices in the developed world. They argue that the PBS
Speaker 3: systematically drives down what they can charge Australians for the
Speaker 3: drugs that they make, and that that the low price
Speaker 3: in Australia ultimately undermines the global pricing power that they
Speaker 3: have and it limits their ability to recoup what they
Speaker 3: argue are the high costs of research and development.
Speaker 1: Will Trump's strategy for one of the better term actually
Speaker 1: work in driving US prices down, Jason.
Speaker 3: That's really difficult to assess. One thing that I didn't
Speaker 3: know about is that the prices that the Australian government
Speaker 3: lists that it pays drug companies for the medicines that
Speaker 3: we consume doesn't actually reflect the real price that is paid.
Speaker 3: So on the one hand, yes, there's a listed price
Speaker 3: and this money is paid to the drug companies, but
Speaker 3: then the next month the drug companies pay back what
Speaker 3: they call a rebate to the Australian government, which is
Speaker 3: effectively means that the price that is actually paid is
Speaker 3: even lower than the listed price, and I think drug
Speaker 3: companies end up paying back around thirty percent of the
Speaker 3: total cost of the PBS, which is quite staggering when
Speaker 3: you think about it. And so perhaps the Australian government
Speaker 3: might be able to work out a way where they
Speaker 3: increase the listed price, so perhaps keep Donald Trump happy
Speaker 3: by saving face that there's been a price increase, But
Speaker 3: the Australian government might then be seeking an increase in
Speaker 3: the rebate that is paid kind of under the table,
Speaker 3: if you like, by the drug companies back to the
Speaker 3: Australian government.
Speaker 1: So is there anything else that the government can do
Speaker 1: about all of this, Jason, I.
Speaker 3: Think it's going to be really difficult because if Donald
Speaker 3: Trump does include Australia in this basket of countries against
Speaker 3: which US drug prices will be benchmarked, then I think
Speaker 3: it really does put the government in a difficult position
Speaker 3: because we have some of the lowest prices and I
Speaker 3: think that will lower the average of drug prices overall.
Speaker 3: I think the Australian government is going to have a
Speaker 3: lot of difficulty pushing back against that.
Speaker 4: We will only sign up to things that are in
Speaker 4: Australia's national interest, so on things like the Pharmaceutical Benefit Scheme,
Speaker 4: the Media Bargaining Code, our biosecurity in agriculture, they're not
Speaker 4: on the table as far as we're concerned.
Speaker 3: And as the Prime Minister has so clearly stated that
Speaker 3: Australia won't be intimidated by the US. It does create
Speaker 3: a potentially big political problem for the Prime Minister and
Speaker 3: his government.
Speaker 1: Jason always great to speak with you.
Speaker 3: Daniel, thank you so much. Great to speak with you.
Speaker 7: Also in the news today, the United States military is
Speaker 7: reportedly sending additional fighter jets to the Middle East and
Speaker 7: extending existing deployments to bolster its presence amid the Israel
Speaker 7: Iran conflict. In a social media post, US President Donald
Speaker 7: Trump stated that we now have complete and total control
Speaker 7: of the skies over Iran. US officials have declined to
Speaker 7: provide specific numbers of jets that have been deployed, and
Speaker 7: insist that the US military has not taken any direct
Speaker 7: offensive action against Iran. And restrictions around sexually active, gay
Speaker 7: and bisexual men donating blood and plasma are being loosened
Speaker 7: Under new more inclusive rules. From July fourteen, Australian Red
Speaker 7: Cross Lifeblood will remove restrictions which state gay and bisexual men,
Speaker 7: as well as transgender women who have sex with men,
Speaker 7: cannot donate blood or plasma if they've been sexually active
Speaker 7: in the past three months. Seven am will be back tomorrow.
Speaker 7: Thanks for listening.