WEBVTT - How Trump could make Australian medicines more expensive 0:00:01.400 --> 0:00:10.400 From Schwartz Media. I'm Daniel James. This is seven AM. 0:00:10.600 --> 0:00:13.560 Medicines in Australia might be about to get more expensive 0:00:13.840 --> 0:00:17.960 and harder to come by. Australia's Pharmaceutical Benefits scheme, the 0:00:18.000 --> 0:00:21.119 safety net that keeps our prescriptions cheap, has become a 0:00:21.160 --> 0:00:24.120 target of Donald Trump's trade war, and after the US 0:00:24.200 --> 0:00:27.480 President signed an executive order stating the US shouldn't pay 0:00:27.480 --> 0:00:30.800 more for medicines than its peers, drug companies are pausing 0:00:30.880 --> 0:00:35.120 UPBS listings and warning some medicines might never reach our shelves. 0:00:36.000 --> 0:00:40.559 Today's special correspondent for the Saturday Paper, Jason kotsukis on 0:00:40.640 --> 0:00:43.720 how one decision in Washington could leave Australians paying more 0:00:43.800 --> 0:00:47.479 for vital drugs and whether Australia has the leverage to 0:00:47.520 --> 0:01:01.880 do anything about it. It's Thursday, June nineteenth. 0:01:01.920 --> 0:01:04.640 Well, the G seven summit in Canada today will look 0:01:04.680 --> 0:01:06.920 a little more like a G six with Donald Trump, 0:01:06.959 --> 0:01:09.120 as we heard pulling the pin earlier to head back 0:01:09.160 --> 0:01:12.240 to Washington, DC. It means Anthony Alberinezi now has a 0:01:12.240 --> 0:01:14.479 gaping hole in his diary where talks with. 0:01:14.480 --> 0:01:17.479 The Anthony Aberneze was just ghosted by Donald Trump who 0:01:17.560 --> 0:01:19.959 left the G seven summit in Canada before the two 0:01:20.040 --> 0:01:21.760 leaders got a chance to meet. 0:01:22.440 --> 0:01:27.280 Was that expected, Well, it wasn't expected. Daniel V Prime 0:01:27.280 --> 0:01:31.360 Minister's office was very pleased to announce on the weekend 0:01:31.400 --> 0:01:36.839 that they had secured this long anticipated meeting with the US. 0:01:36.800 --> 0:01:41.880 President seriously, and I look forward to tomorrow's meeting, and 0:01:41.959 --> 0:01:46.080 not just with President Trump. It is important to say. 0:01:46.200 --> 0:01:49.600 But perhaps it's not unexpected that Donald Trump would want 0:01:49.600 --> 0:01:53.880 to change the script, and that's what he did, letting 0:01:53.920 --> 0:01:56.960 us all know that he was going to leave the 0:01:57.000 --> 0:02:01.440 G seven early and get back to Washington to keep 0:02:01.480 --> 0:02:06.440 a closer eye on what's happening in the Persian Gulf, where, 0:02:06.440 --> 0:02:09.560 of course Israel has launched a series of attacks on 0:02:09.800 --> 0:02:12.000 Iran's nuclear facilities. 0:02:12.040 --> 0:02:17.720 Now, it's perfectly understandable the decision that he made that 0:02:17.880 --> 0:02:21.040 meant that the meetings were scheduled not just with myself 0:02:21.080 --> 0:02:22.000 but with India. 0:02:22.040 --> 0:02:25.320 It must have blind signed it, Anthony Elbanezi on the 0:02:25.320 --> 0:02:28.560 one hand, But on the other hand, it is understandable 0:02:28.600 --> 0:02:31.600 that Donald Trump would want to be in the situation 0:02:31.760 --> 0:02:34.799 Room at the White House with all of that national 0:02:34.919 --> 0:02:37.760 security establishment of the US government. 0:02:38.200 --> 0:02:40.040 Do we have any idea of whether the two will 0:02:40.040 --> 0:02:41.600 have a chance to get to meet soon. 0:02:41.680 --> 0:02:45.040 We don't. The talk around Parliament House is that the 0:02:45.120 --> 0:02:49.880 earliest they could possibly get back together is on the 0:02:49.880 --> 0:02:54.760 sidelines of the UN General Assembly, which takes place in September. 0:02:55.360 --> 0:02:58.600 I personally don't think it really matters all too much 0:02:58.880 --> 0:03:02.080 if Anthony eberenezid a meeting with Donald Trump or not. 0:03:02.680 --> 0:03:06.000 We know that these meetings can be quite fraught. Donald 0:03:06.120 --> 0:03:10.720 Trump is, of course a very capricious president. He's changing 0:03:10.760 --> 0:03:14.399 his mind all the time, particularly on things like tariff's 0:03:14.760 --> 0:03:18.359 the other big issues. Of course orcas it's an uncertain 0:03:18.400 --> 0:03:21.440 time and I don't think a meeting with Donald Trump 0:03:21.480 --> 0:03:25.919 necessarily locks things down for the rest of Donald Trump's term. 0:03:25.919 --> 0:03:28.240 In offers, one of the main issues if the two 0:03:28.320 --> 0:03:32.200 are to meet for Australia is US tariffs, as the 0:03:32.240 --> 0:03:35.240 Prime Minister fires to get Australia an exemption on those, 0:03:35.960 --> 0:03:38.440 and one specific target of Trump's trade war has been 0:03:38.480 --> 0:03:42.760 Australia's pharmaceutical Benefit Scheme the PBS. So why has this 0:03:42.880 --> 0:03:44.280 scheme become a target? 0:03:44.600 --> 0:03:50.520 Well, the US pharmaceutical industry has long hated Australia's PBS. 0:03:50.800 --> 0:03:54.040 The PBS is a scheme that goes back to the 0:03:54.120 --> 0:03:56.320 nineteen forties in Australia. 0:03:57.320 --> 0:04:00.680 The Pharmaceutical Benefit Scheme covers aver two thousand and five 0:04:00.800 --> 0:04:05.080 hundred different medicines. It helps you make previous prescription medicines affordable. 0:04:05.360 --> 0:04:07.400 In addition, there's a safety in it for people or 0:04:07.440 --> 0:04:09.480 families who need a lot on medicine. 0:04:09.760 --> 0:04:14.240 It's a system that sees the Australian government by vital 0:04:14.360 --> 0:04:19.840 medicines on behalf of Australian consumers, and the Australian government 0:04:20.120 --> 0:04:24.720 negotiates a price directly with the pharmaceutical manufacture for these 0:04:24.720 --> 0:04:29.960 individual medicines. The Australian consumer then buys the drugs, but 0:04:30.080 --> 0:04:33.600 ultimately it's the Australian government that pays for them, and 0:04:33.720 --> 0:04:37.840 the Australian consumer is then charged a flat fee which 0:04:37.920 --> 0:04:42.200 is very different to what US consumers pay. That price 0:04:42.320 --> 0:04:45.880 is heavily discounted to what the same drugs are sold 0:04:45.920 --> 0:04:47.920 for in the United States. 0:04:51.520 --> 0:04:55.680 Why doesn't somebody fate the drug price situation meaning equalization? 0:04:55.760 --> 0:04:57.320 There's a term and. 0:04:57.480 --> 0:05:01.920 On May twelfth, Donald Trump signed an executcutive order to 0:05:02.000 --> 0:05:06.520 try to do something about this. He wants US consumers 0:05:06.560 --> 0:05:10.400 to pay the same that consumers and other countries pay. 0:05:10.880 --> 0:05:14.000 And so ultimately, what that means is that he wants 0:05:14.279 --> 0:05:17.840 US consumers to pay less, but he wants Australian consumers 0:05:17.960 --> 0:05:18.599 to pay more. 0:05:18.880 --> 0:05:22.800 We're subsidizing others healthcare countries where they paid a small 0:05:22.880 --> 0:05:26.960 fraction of what for the same drug that what we 0:05:27.120 --> 0:05:29.839 pay many, many times and more for. And we're no 0:05:29.960 --> 0:05:33.120 longer tolerate profiteering and prase gouging. 0:05:33.240 --> 0:05:37.839 From What Trump's executive order is likely to do is 0:05:37.920 --> 0:05:41.160 take a group of countries, a basket of countries, and 0:05:41.200 --> 0:05:45.800 the US is going to benchmark the prices paid by 0:05:45.839 --> 0:05:48.839 the countries that are in that basket, and then that's 0:05:48.920 --> 0:05:53.160 the benchmark price that US consumers will then pay. What 0:05:53.200 --> 0:05:56.240 that is likely to mean is that Australian consumers will 0:05:56.240 --> 0:06:00.200 pay more and US consumers will pay lets. And I 0:06:00.279 --> 0:06:04.080 think this is a pattern that we see with Donald Trump, 0:06:04.360 --> 0:06:08.640 not just with pharmaceuticals. The whole issue that is driving 0:06:09.160 --> 0:06:13.920 Donald Trump's tariff increases is this idea that the US 0:06:14.040 --> 0:06:16.360 is getting ripped off. You know, if there's one thing 0:06:16.400 --> 0:06:20.320 that Donald Trump hates, it's the suggestion that the US 0:06:20.400 --> 0:06:23.080 is paying more for something that other countries are getting 0:06:23.120 --> 0:06:26.720 at a discount now, given that Prime Minister Anthony Albanezi 0:06:26.839 --> 0:06:30.000 has drawn a line in the sand when it comes 0:06:30.000 --> 0:06:33.800 to the PBS, I think a very difficult conversation is 0:06:34.720 --> 0:06:38.679 likely when the two meet over what the US President 0:06:38.720 --> 0:06:42.800 wants to do when it comes to Australians getting drugs 0:06:43.000 --> 0:06:45.600 cheaper than US consumers get them. 0:06:45.960 --> 0:06:48.480 You've been speaking on drug companies. What have they been 0:06:48.520 --> 0:06:50.680 saying to you about the impact of Trump's order? 0:06:51.279 --> 0:06:54.760 I think this order has created a lot of uncertainty 0:06:54.839 --> 0:06:59.520 about what prices drug companies will receive for the medicines 0:06:59.560 --> 0:07:03.960 they menfacture. From talking to drug companies and also the 0:07:04.040 --> 0:07:09.119 peak industry body medicines Australia, the main impact right now 0:07:09.240 --> 0:07:13.200 is that drug companies are pausing putting new drugs forward 0:07:13.560 --> 0:07:20.600 to be listed on the PBS, and that pause could 0:07:20.680 --> 0:07:25.440 be extended for quite some time, and ultimately it could 0:07:25.600 --> 0:07:30.960 lead to some vital medicines that Australian consumers want and 0:07:31.080 --> 0:07:34.680 need from overseas may not be listed as soon as 0:07:34.680 --> 0:07:35.960 they would like on the PBS. 0:07:38.280 --> 0:07:41.400 After the break, Can the government halt the worst impacts 0:07:41.440 --> 0:07:55.360 of Trump's executive order? Jason, Drug companies are delaying listing 0:07:55.520 --> 0:07:58.480 with the PBS because it could affect their pricing overseas. 0:07:58.880 --> 0:08:00.720 So can you tell me what kind of medications we 0:08:00.800 --> 0:08:01.800 may be missing out on. 0:08:02.080 --> 0:08:04.880 Well, Daniel, I think potentially it's a whole new generation 0:08:05.440 --> 0:08:09.600 of drugs that are coming onto market in countries overseats. 0:08:10.000 --> 0:08:13.440 Take one example, Daniel, don Anamab, a. 0:08:13.440 --> 0:08:16.200 New drug has been held as a turning point in 0:08:16.240 --> 0:08:18.280 the fight against Alzheimer's. 0:08:18.640 --> 0:08:22.840 Now US drug maker Elain Lilly says it's experimental drug, 0:08:22.960 --> 0:08:26.280 d nanomab, can slow down the development of the disease. 0:08:26.680 --> 0:08:29.480 Dananomab has a price tag of more than forty thousand 0:08:29.560 --> 0:08:33.160 dollars a year because it's not yet subsidized by the government. 0:08:33.559 --> 0:08:36.680 It will be considered for inclusion on the Pharmaceutical Benefit 0:08:36.760 --> 0:08:40.760 Scheme midyear, but there are no guarantees now. 0:08:41.000 --> 0:08:45.360 Health Minister Mark Butler revealed last month that the Pharmaceutical 0:08:45.400 --> 0:08:50.080 Benefits Advisory Committee will be considering dnanomab in July. 0:08:50.600 --> 0:08:53.319 There is still a fair way to go, though, to 0:08:53.320 --> 0:08:56.160 determine whether or not this will be reimbursed by the 0:08:56.200 --> 0:09:00.040 federal government, and if so, for which patients. 0:09:00.120 --> 0:09:03.160 Before that drug can be listed on the PBS. Elo 0:09:03.240 --> 0:09:08.240 Lilly's global head Office will have to approve the price 0:09:08.320 --> 0:09:11.560 that is offered by the Australian government. And that's where 0:09:12.080 --> 0:09:15.040 we're seeing the impact of this pause that the global 0:09:15.080 --> 0:09:20.720 head officers of these pharmaceutical manufacturers, that's where the hold 0:09:20.800 --> 0:09:23.800 up is coming because they are saying, let's just hold 0:09:23.840 --> 0:09:26.960 off on approving this price because we might get a 0:09:26.960 --> 0:09:31.800 better price once Donald Trump gets into the act and 0:09:32.040 --> 0:09:37.400 negotiates with Australia about the future of the PBS itself. 0:09:39.840 --> 0:09:42.480 The Prime Minister has said repeatedly that the PPS is 0:09:42.520 --> 0:09:46.520 not upfit negotiation when it comes to negotiations on tariffs 0:09:47.240 --> 0:09:50.040 and what way does Trump want Australia to alter the PBS. 0:09:50.080 --> 0:09:51.839 What regulations are under pressure here? 0:09:52.320 --> 0:09:55.720 Well, he wants the Australian government to pay more for 0:09:55.800 --> 0:09:59.680 the drugs that US companies are making, and he's saying 0:09:59.840 --> 0:10:03.439 the the prices that Australia negotiates are just way too 0:10:03.520 --> 0:10:08.320 low and don't compensate US companies fairly for the research 0:10:08.320 --> 0:10:12.440 and development, the investment that they put into developing these 0:10:12.520 --> 0:10:17.000 new drugs. So US drug companies have long opposed the PBS, 0:10:17.400 --> 0:10:21.160 and Australia's PBS does deliver some of the lowest medicine 0:10:21.160 --> 0:10:25.040 prices in the developed world. They argue that the PBS 0:10:25.040 --> 0:10:29.240 systematically drives down what they can charge Australians for the 0:10:29.320 --> 0:10:32.319 drugs that they make, and that that the low price 0:10:32.360 --> 0:10:37.160 in Australia ultimately undermines the global pricing power that they 0:10:37.240 --> 0:10:40.959 have and it limits their ability to recoup what they 0:10:41.080 --> 0:10:44.240 argue are the high costs of research and development. 0:10:44.880 --> 0:10:48.160 Will Trump's strategy for one of the better term actually 0:10:48.240 --> 0:10:51.000 work in driving US prices down, Jason. 0:10:51.360 --> 0:10:54.760 That's really difficult to assess. One thing that I didn't 0:10:54.760 --> 0:10:57.600 know about is that the prices that the Australian government 0:10:57.679 --> 0:11:01.960 lists that it pays drug companies for the medicines that 0:11:02.000 --> 0:11:06.400 we consume doesn't actually reflect the real price that is paid. 0:11:06.559 --> 0:11:09.200 So on the one hand, yes, there's a listed price 0:11:09.679 --> 0:11:12.840 and this money is paid to the drug companies, but 0:11:12.920 --> 0:11:15.600 then the next month the drug companies pay back what 0:11:15.640 --> 0:11:19.440 they call a rebate to the Australian government, which is 0:11:19.520 --> 0:11:24.160 effectively means that the price that is actually paid is 0:11:24.200 --> 0:11:27.480 even lower than the listed price, and I think drug 0:11:27.520 --> 0:11:31.320 companies end up paying back around thirty percent of the 0:11:31.320 --> 0:11:34.840 total cost of the PBS, which is quite staggering when 0:11:34.880 --> 0:11:38.360 you think about it. And so perhaps the Australian government 0:11:38.440 --> 0:11:40.360 might be able to work out a way where they 0:11:41.160 --> 0:11:45.200 increase the listed price, so perhaps keep Donald Trump happy 0:11:45.440 --> 0:11:48.880 by saving face that there's been a price increase, But 0:11:49.440 --> 0:11:52.240 the Australian government might then be seeking an increase in 0:11:52.280 --> 0:11:54.840 the rebate that is paid kind of under the table, 0:11:54.880 --> 0:11:57.160 if you like, by the drug companies back to the 0:11:57.200 --> 0:11:58.040 Australian government. 0:11:58.280 --> 0:12:00.160 So is there anything else that the government can do 0:12:00.240 --> 0:12:02.320 about all of this, Jason, I. 0:12:02.320 --> 0:12:05.480 Think it's going to be really difficult because if Donald 0:12:05.480 --> 0:12:09.480 Trump does include Australia in this basket of countries against 0:12:09.559 --> 0:12:13.240 which US drug prices will be benchmarked, then I think 0:12:13.240 --> 0:12:15.760 it really does put the government in a difficult position 0:12:16.160 --> 0:12:18.800 because we have some of the lowest prices and I 0:12:18.840 --> 0:12:22.680 think that will lower the average of drug prices overall. 0:12:23.120 --> 0:12:24.640 I think the Australian government is going to have a 0:12:24.640 --> 0:12:26.960 lot of difficulty pushing back against that. 0:12:27.440 --> 0:12:29.640 We will only sign up to things that are in 0:12:29.800 --> 0:12:34.560 Australia's national interest, so on things like the Pharmaceutical Benefit Scheme, 0:12:35.160 --> 0:12:41.480 the Media Bargaining Code, our biosecurity in agriculture, they're not 0:12:41.520 --> 0:12:44.719 on the table as far as we're concerned. 0:12:45.120 --> 0:12:48.960 And as the Prime Minister has so clearly stated that 0:12:49.000 --> 0:12:54.079 Australia won't be intimidated by the US. It does create 0:12:54.120 --> 0:12:58.760 a potentially big political problem for the Prime Minister and 0:12:58.800 --> 0:12:59.360 his government. 0:13:01.320 --> 0:13:03.080 Jason always great to speak with you. 0:13:03.400 --> 0:13:05.760 Daniel, thank you so much. Great to speak with you. 0:13:13.080 --> 0:13:16.360 Also in the news today, the United States military is 0:13:16.400 --> 0:13:19.320 reportedly sending additional fighter jets to the Middle East and 0:13:19.400 --> 0:13:23.480 extending existing deployments to bolster its presence amid the Israel 0:13:23.600 --> 0:13:27.640 Iran conflict. In a social media post, US President Donald 0:13:27.679 --> 0:13:31.320 Trump stated that we now have complete and total control 0:13:31.440 --> 0:13:35.120 of the skies over Iran. US officials have declined to 0:13:35.120 --> 0:13:38.080 provide specific numbers of jets that have been deployed, and 0:13:38.200 --> 0:13:41.200 insist that the US military has not taken any direct 0:13:41.240 --> 0:13:48.040 offensive action against Iran. And restrictions around sexually active, gay 0:13:48.040 --> 0:13:51.120 and bisexual men donating blood and plasma are being loosened 0:13:51.200 --> 0:13:55.640 Under new more inclusive rules. From July fourteen, Australian Red 0:13:55.640 --> 0:13:59.880 Cross Lifeblood will remove restrictions which state gay and bisexual men, 0:14:00.120 --> 0:14:02.440 as well as transgender women who have sex with men, 0:14:02.840 --> 0:14:05.960 cannot donate blood or plasma if they've been sexually active 0:14:06.040 --> 0:14:09.480 in the past three months. Seven am will be back tomorrow. 0:14:09.559 --> 0:14:10.320 Thanks for listening.