Australian gov't rules out negotiating with U.S. on pharmaceutical tariffs

Alsharq Tribune-AFP 

The Australian federal government will not make changes to its subsidization scheme for medications amid tariff pressure from the U.S. administration, said Mark Butler, the health minister, on Friday.

Butler told Seven Network television that Australia will not negotiate with the United States on the "fundamentals" of the Pharmaceutical Benefits Scheme (PBS), under which the federal government subsidizes the cost of prescription medicines.

"We keep sending this clearest of possible messages to the U.S. because we know they get the big drug companies in their ear trying to unpick the PBS here in Australia and equivalent schemes in other countries around the world. We are not negotiating about those fundamentals," he said.

Butler was speaking after U.S. President Donald Trump signed an executive order on Thursday imposing a 100 percent tariff on imports of certain patented pharmaceuticals.

In an updated list of trade grievances with Australia released late in March, the U.S. administration said that the PBS undervalues American innovation through unfair drug pricing practices.

Under the scheme, pharmaceutical manufacturers must negotiate sales directly with the Australian government rather than individual buyers to prevent commercial bidding wars.

According to data from the United Nations' Comtrade, Australian pharmaceutical exports to the United States were worth 1.3 billion U.S. dollars in 2025.

Biotechnology giant CSL is Australia's largest pharmaceutical company, but Butler said on Friday the government is confident the Melbourne-based firm will be exempt from the new tariffs because of its large U.S. manufacturing presence.

A spokesperson for trade minister Don Farrell told the Australian Broadcasting Corporation on Friday that the government was disappointed by the U.S. tariffs on pharmaceuticals and would continue to push for the removal of "unjustified and unwarranted" tariffs.