Radio interview with Minister Butler and Sabra Lane, ABC AM - 20 March 2025

SABRA LANE, HOST: No matter who wins the looming federal election, drugs listed on the Pharmaceutical Benefits Scheme will cost no more than $25 per script from January next year. The Federal Government's made that election commitment and the Coalition's matched it. The maximum cost is currently $31.60. The PBS program subsidises the cost of many expensive drugs, making them affordable. But this proposal is happening as US drug giants appeal to President Donald Trump to impose tariffs on Australia because of the PBS scheme. The Federal Health Minister, Mark Butler, joined me earlier. Mark Butler, thanks for joining AM.
 
MINISTER FOR HEALTH AND AGED CARE, MARK BUTLER: Hi, Sabra.
 
LANE: This promise requires Labor to be re-elected and for a new Parliament to pass it for cheaper PBS drugs from January next year. Why not this July?
 
BUTLER: Usually the indexation happens in January. That's how we delivered the first four instalments in cheaper medicines that have already saved Australian patients $1.3 billion at the pharmacy counter. This is a really important part of the election platform we took to the last election we've delivered on it, but we know there's more to do.
 
LANE: The Coalition last night pre-empted the government's announcement and issued a media release, saying the co-payment should be $25 and would be under them. Why not legislate it next week?
 
BUTLER: If we did that, the usual time would be to put it in place on January 1st. We need software arrangements and the like. The important thing is we're delivering cheaper medicines this year. We've frozen the price of medicines for this year. We delivered three earlier instalments in the first two years of our government as well. But we know that cheaper medicines are not just good for the hip pocket of household budgets. It's really good health policy because cheaper scripts are far more likely to be filled. They're good for people financially, but they're also good for their health.
 
LANE: 8 per cent of people apparently haven't been filling their scripts because of cost-of-living pressures. That's happened on your watch.
 
BUTLER: That was the situation we encountered when we came to government, and it's why cheaper medicines was right at the centre of our healthcare policy. If we hadn't done what we have done over the last couple of years, medicine prices would be as high as $50 a script next year. And then they'll, be just $25. We've delivered this would be the fifth instalment in cheaper medicines policies spread across general patients, pensioners, ensuring that people can get 60-days supply of many common medicines for the price of a single script. This has been a very important part of our strengthening Medicare agenda.
 
LANE: The cost to the budget is $689 million a year. How will that be paid for?
 
BUTLER: All of our revenue and spending measures will be made clear in the Budget next week Sabra when Jim Chalmers stands up in Parliament on Tuesday night.
 
LANE: The Trump Administration says a new round of tariffs will take place from April the 2nd. US pharmaceutical companies have been writing to the President to say he should be taking action against Australia's PBS system. They argue it's among the world's most egregious and discriminatory economic barriers and should be targeted. If that's what he chooses to do how will the government respond?
 
BUTLER: We'll certainly respond by defending the PBS, as we always have since we created it 75 years ago. They call it egregious Big Pharma in the US I call it one of the shining jewels of one the world's best healthcare systems. We do not want to go down the path of an American style user pay system. Of course, they want to sell their medicines at top dollar, but our interest is cheaper medicines. We know it's good for people's hip pocket, we know it's good for health. And we've been here before Sabra. This is exactly what Big Pharma did -  
 
LANE: Yeah, well, how can you actually protect the PBS? The government said it was going to protect steel and aluminium, and yet the US government whacked on extra tariffs just the other week. You'll be powerless if that's what he wants to do.
 
BUTLER: Yeah, but this is about what price people pay here in Australia. And we're not going to be influenced by lobbying by Big Pharma over in the US about what price people pay for their medicines here in Australia. They tried this when we were negotiating as a country, the US Free Trade Agreement, 20 years ago. They pushed the Howard Government then and Labor was determined to put into the Parliament clear protections for our PBS. Howard didn't support them at the time. He backed the US pharma industry over Australian patients. But we got that through the Parliament. With determination we can protect the PBS, and your listeners should be very reassured that Labor is utterly determined to do that.
 
LANE: Do you think Mr. Trump's going to target it?
 
BUTLER: I'm not sure, frankly. We're very clear what the position of the Big Pharma industry over in the US is. They've made that clear through general media as well as industry media. I'm not sure we've heard anything from the administration yet, but we are prepared to make it very clear there is no change we will countenance to our PBS.
 
LANE: And you're lobbying right now, the White House?
 
BUTLER: That's obviously happening through the very regular discussions our trade and foreign affairs people are having, including through Ambassador Rudd. But look, we've made our position as a Labor Party clear since this was first raised 20 years ago in the negotiations for a free trade agreement.
 
LANE: Mark Butler, thanks for joining AM this morning.
 
BUTLER: Thanks, Sabra.