PM poll pledge to slash cost of hundreds of medicines

Kat Wong | March 20, 2025

Australians will pay no more than $25 per script for certain medicines 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, if Labor is re-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.

But the entire medicine subsidy program could soon come under threat as the US president threatens to expand tariffs.

According to Treasury estimates, Donald Trump’s 25 per cent tariffs on all steel and aluminium imports are expected to directly impact Australia’s GDP by less than 0.02 per cent by 2030.

But pharmaceuticals represent a bigger slice of the US-Australia trade relationship and American pharmaceuticals representatives have called on their government to impose further tariffs and said Australia should be placed on a “watch list”.

“Egregious and discriminatory pricing policies in several markets, including Canada, Japan and Korea, continue to undervalue American innovation, threaten billions of dollars in lost sales and put American competitiveness, jobs and exports at risk,” Pharmaceutical Research and Manufacturers of America wrote in its submission.

The group claimed PBS listings dictate access to the Australian market but said “unnecessary” supplemental data requests and other administrative motions cause significant delays.

Its submission said the PBS’s pricing policies can have a “chilling effect” that prevents Australians gaining fast access to new medicines.

The federal government has continued to negotiate for tariff exemptions with the US administration.