Health Minister Mark Butler says Australia won’t be bullied into unwinding PBS after latest Trump tariff

Australia is standing firm on its commitment to cheaper medicines under the Pharmaceutical Benefits Scheme after US President Donald Trump slapped a global 100 per cent tariff on pharmaceuticals overnight.

Federal Health Minister Mark Butler said there was “no way” the Federal Government would be negotiating any “fundamental elements” of the PBS, which allows Australians access to more affordable medicines.

“We’ve said very clearly there is no way we’re negotiating about those fundamental elements of the PBS that have served Australia so well for 80 years, bringing the best medicines from around the world to Australian patients and keeping prices affordable,” he told Sunrise on Friday.

Mr Butler said the immediate concern was for exporters sending product to the US under the existing free trade agreement — in force since 2005.

“We’ll be working with all of those businesses to understand any impact it would have on them and on Australian jobs,” Mr Butler said.

The new tariff applies to patented pharmaceuticals imported to the US, but will be reduced to 20 per cent for companies that move production to the States before the end of Mr Trump’s term in 2028.

Opposition Leader Angus Taylor, also appearing on Sunrise, agreed the tariffs were “not welcome news” and committed to working with the government on exemptions for Australian exporters.

“This is obviously not welcome news. We don’t want to see it,” Mr Taylor said.

“We’ll work with the government to do anything we have to to get it overturned or get an exemption for Australian exporters. But that has to be a first priority.”

The concerning move away from free trade agreements puts pressure on the Government to join other countries in striking new trade deals to protect smaller Australian-based drug companies facing the monstrous tariff.

Japan, Switzerland, the European Union and United Kingdom have all negotiated separate deals to lower their tariffs.

But Mr Butler maintained Australia would not be bullied into unwinding elements of the PBS, despite it being a longstanding point of contention for the American drug lobby.

“We keep sending this clearest of possible messages to the US 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,” he said.

Medicinal and pharmaceutical products are among the top three exports to the US over the past five years.

Australia sent $2.1 billion in pharmaceutical products to the US in 2024, almost 90 per cent of which were blood plasma-derived products.

These blood products are expected to be exempted from the new tariff, as products meeting an “urgent” US health need will be granted an exemption. It remains unclear whether any extra caveats will apply to such exemptions.

Australia’s largest biotechnology company CSL, which predominantly produces plasma-derived therapies, said it’s still reviewing the latest executive order but is not anticipating “material impact from tariffs in FY26”.

CSL is based in Victoria but already has a manufacturing presence in the US, and last month announced it was investing $1.5 billion USD ($2.2b AUD) into expanding its Illinois plasma therapy facility.