Labor Pledges to Lower PBS Drug Costs to $25 Per Script, Coalition Matches Promise

The Coalition matched Labor’s offer to reduce PBS medicine costs, with Mark Butler confirming changes would take effect from January 1.

A customer is served at an Amcal pharmacy in Albany, Western Australia, on Dec. 10, 2023. Susan Mortimer/The Epoch Times

Labor has pledged to cap the cost of drugs to $25 per script from January next year under a revised Pharmaceutical Benefits Scheme (PBS) plan if they win re-election.

Currently, the maximum cost for PBS medicines stands at $31.60. The taxpayer-backed scheme subsidises the cost of essential medications for all Australians.

The Coalition has tried to take the air out of the election promise by issuing a media release saying the federal opposition will match the offer if it wins.

Prime Minister Anthony Albanese said lowering the cost of medicines was another way to help ease cost of living pressures.

“With cheaper medicines, more free GP visits and a stronger Medicare, we say to Australians: we’ve got your back,” he told ABC Radio Melbourne.

Health Minister Mark Butler said it wasn’t possible for the PBS to be introduced earlier than Jan. 1.

“We need software arrangements and the like. I mean, the important thing is we’re delivering cheaper medicines this year. We’ve frozen the price of medicines for this year,” he told ABC.

Australian Minister for Health and Aged Care Mark Butler addresses the media at Parliament House in Canberra, Australia on March 30, 2023. Martin Ollman/Getty Images

$690 Million Annual Cost to Budget

Estimates suggest the policy will cost the federal budget $690 million annually.

However, Albanese declined to specify how Labor would fund the additional costs, but Minister Butler confirmed that Treasurer Jim Chalmers would formally announce the details in his budget speech on March 25.

Butler added that the proposal builds on Labor’s 2023 policy that reduces the PBS co-payment from $42.50 to $30—the amount Australians contribute towards paying for drugs listed on the PBS.

Pensioners will continue paying $7.70 per script until at least 2030, following a five-year price freeze introduced in last year’s budget.

Labor has also introduced 60-day scripts for over 320 common medicines. This allows Australians to buy 60 days worth of medicine from a single prescription, instead of the previous 30 days. The idea is to try cut down the cost of patients having to visit the doctor or pharmacy twice.

The move initially faced backlash from pharmacists, but was later offset by a $3 billion support package.

Coalition Matches the Offer

Meanwhile, Opposition Leader Peter Dutton’s Coalition has matched Labor’s pledge, promising to lower the PBS co-payment to $25 while ensuring continued support for affordable medicines.

Health spokesperson Anne Ruston released a statement saying it would “ensure Australians have more affordable access to the medicines and treatments they need, at a time when healthcare has never been more expensive.”

The opposition heavily criticised Labor’s handling of the cost-of-living crisis, arguing that financial strain has forced Australians to make difficult health decisions.

“Eight percent of Australians went without or delayed prescription medicine because of Labor’s cost-of-living crisis—so frankly, what they’re doing today is just making up for the damage they’ve done to Australian households and families,” Shadow Home Affairs Minister James Paterson told Sky News.

Opposition Health spokesperson Anne Ruston at Parliament House in Canberra, Australia, on March 24, 2020. Sam Mooy/Getty Images

US Pharma Targets PBS Amid Tariff Concerns

The announcement comes at a time when the US is preparing a fresh round of tariffs, set to be unveiled on April 2 by the Trump administration.

US pharmaceutical companies have urged President Trump to take action against Australia’s PBS, labelling it an “egregious and discriminatory” economic barrier that undercuts American drug prices.

In response, Butler defended the PBS, emphasising that Australia would not be swayed by U.S. lobbying.

“They call it egregious in Big Pharma in the U.S.. I call it one of the shining jewels of one of the world’s best healthcare systems. We do not want to go down the path of an American-style user-pays system. Of course, they want to sell their medicines at top dollar, but our interest is cheaper medicines,” he said.

He reiterated that Australia had resisted similar pressure during negotiations for the U.S. Free Trade Agreement 20 years ago.

“They pushed the Howard government then, and Labor was determined to put into Parliament clear protections for our PBS,” Butler said.

“Howard didn’t support them at the time—he backed the U.S. pharma industry over Australian patients. But we got that through Parliament. With determination, we can protect the PBS.”

The Coalition has also pledged to defend the PBS from potential U.S. tariffs.

“Of course, we’ll deliver this in government. We have a proud record of supporting the PBS,” Paterson said, adding that the Coalition considers Australia’s pharmaceutical benefits scheme “sacrosanct.”

Ruston described the potential new tariffs as deeply concerning and stated they would test Prime Minister Anthony Albanese’s leadership.

“He must travel to the United States as a matter of urgency for a face-to-face meeting with Donald Trump to ensure Australian businesses are not adversely impacted,” she said in a statement.

“Failure to do so would be another sign of weak leadership from the prime minister.”