Latest / The Front / Donald Trump just sent Australia’s medicine prices through the roof

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Donald Trump just sent Australia’s medicine prices through the roof · The Front

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  Speaker 1: From the Australian. Here's what's on the front. I'm Claire Harvey.
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  Speaker 1: It's Friday, June twenty six, twenty twenty six. The government
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  Speaker 1: gave itself a round of applause on Thursday for passing
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  Speaker 1: its controversial asset tax reforms, but former Reserve Bank Governor
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  Speaker 1: Philip Low has made a surprise attack, saying while he
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  Speaker 1: supports some of the changes, he has serious reservations about
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  Speaker 1: what the package will do to productivity. Those stories alive
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  Speaker 1: right now at the Australian dot com dot you six
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  Speaker 1: hundred dollars a month to lose weight migrain drugs that
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  Speaker 1: are nigh impossible to get at any price. The market
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  Speaker 1: for pharmaceutical products in Australia is all topsy turvy. It's
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  Speaker 1: part red tape nightmare, part geopolitical standoff. Our Health editor
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  Speaker 1: Natasha Robinson has been investigating what's going wrong and is
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  Speaker 1: here in just a moment to diagnose the real problem.
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  Speaker 2: For adults with type two diabetes.
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  Speaker 1: Do you know about Manjarra? Natasha Robinson is The Australian's
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  Speaker 1: Health editor and I've brought her in because a story
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  Speaker 1: that she wrote really caught my eye. It was about
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  Speaker 1: the drug Munjaro.
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  Speaker 2: Plus people last up to twenty five pounds.
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  Speaker 1: I know people who've had life changing benefits from taking
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  Speaker 1: this drug. I think it was originally designed for diabetes,
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  Speaker 1: is now being used to help people avoid serious obesity.
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  Speaker 1: What if all they do for my tape two diabetes
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  Speaker 1: isn't enough, or what if once weekly Mountjarro could help.
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  Speaker 1: But in Australia, if you're taking Munjaro, you are paying
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  Speaker 1: an absolute fortune compared to everyone else in the world.
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  Speaker 1: This kind of blew up my understanding about our access
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  Speaker 1: to medicine here in Australia. Why is Munjarro so expensive.
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  Speaker 3: Munjoo here is not funded on the PBS on the
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  Speaker 3: Pharmaceutical Benefits Scheme for diabetes. So that is a major
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  Speaker 3: flash point in this issue that we have with our PBS,
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  Speaker 3: in which there is increasingly tension between pharmaceutical companies on
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  Speaker 3: the one hand and our drug approval processes on the
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  Speaker 3: other hand, in which in this case, the Committee that.
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  Speaker 2: Approves Drugs did approve.
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  Speaker 3: Munjaro to be funded for people with diabetes on the
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  Speaker 3: Pharmaceutical Benefit Scheme, which means that the cost would be
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  Speaker 3: dramatically slashed for those people who really need this drug,
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  Speaker 3: but the pharmaceutical company Eli Lilly, who is the manufacturer,
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  Speaker 3: would not agree to the conditions that were.
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  Speaker 2: Put before it.
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  Speaker 3: And that is a major flashpoint in this ongoing tension
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  Speaker 3: between our drug approval system, the prices that we will pay,
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  Speaker 3: the conditions that we demand, and pharmaceutical companies who are saying, look,
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  Speaker 3: the global market is shifting.
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  Speaker 2: These are innovative medicines, we need you to pay more.
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  Speaker 2: The price in Australia is incredibly high.
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  Speaker 3: For people with diabetes and for people who are taking
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  Speaker 3: it for weight loss, it can be as high.
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  Speaker 2: As six hundred dollars or more a month.
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  Speaker 3: So that is an incredibly large private market and what
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  Speaker 3: you see is that these drugs are incredibly popular and
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  Speaker 3: a lot of people are willing to pay that price.
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  Speaker 1: The government negotiates with drug companies all the time. Every
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  Speaker 1: time a new drug comes to market. Naturally they want
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  Speaker 1: to sell it here in Australia and they want to
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  Speaker 1: get on the PBS. What does that actually mean. What
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  Speaker 1: does getting on the PBS mean for a drug manufacturer?
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  Speaker 3: Well, it's incredibly important for a drug manufacturer because it
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  Speaker 3: means that access is very very wide.
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  Speaker 2: If you are on the PBS.
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  Speaker 3: It means that you've effectively got access to the entire
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  Speaker 3: Australian population, so not only the people who can.
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  Speaker 2: Pay for a private script, but everyone.
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  Speaker 3: Because on the PBS there's a co payment for patients,
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  Speaker 3: but it's capped by the government at only twenty five dollars,
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  Speaker 3: So that means that PBS drugs are incredibly accessible.
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  Speaker 2: The government futs you know, proportion of the bill.
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  Speaker 3: And the trade off for farmer is that we offer
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  Speaker 3: a price, but they get incredibly wide access to our population.
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  Speaker 1: Why in this case is Eli Lilly holding out because presumably, yes,
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  Speaker 1: they're getting six hundred dollars a month from a lot
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  Speaker 1: of people to take Monjaro, but they could have many, many,
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  Speaker 1: many more people and be making much more money. Is
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  Speaker 1: this a point of principle for them?
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  Speaker 3: So what is going on at the moment in the
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  Speaker 3: world is there is massive global disruption in the pharmaceutical
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  Speaker 3: market and that's as a result of a few things
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  Speaker 3: coming together. One of them is that innovative medicines are
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  Speaker 3: more effective. They are more expensive to develop, but they
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  Speaker 3: have this kind of personalized nature and a whole high
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  Speaker 3: degree of efficacy. So the price that they can command
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  Speaker 3: is generally more, and it's reasonable to ask higher prices
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  Speaker 3: for these medicines because they are costly to develop and incredibly.
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  Speaker 4: Effective by fellow Americans, this is Liberation Day.
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  Speaker 3: At the same time, you've got a phenomenon going on
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  Speaker 3: in the United States where Donald Trump has signed an
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  Speaker 3: executive order and has obtained the agreement of a large
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  Speaker 3: suite of pharmaceutical companies to basically guarantee that Americans will
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  Speaker 3: not pay more for drugs than the rest of the world.
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  Speaker 4: Our country and its taxpayers have been ripped off for
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  Speaker 4: more than fifty years, but it is not going to
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  Speaker 4: happen anymore.
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  Speaker 1: It's not going to happen.
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  Speaker 3: This is the sort of benchmarking exercise. It's not in
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  Speaker 3: legislation yet, but the agreement has been reached with pharmaceutical companies,
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  Speaker 3: which is placing pressure on other countries and low paying
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  Speaker 3: countries like Australia. That effectively means that if a pharmaceutical
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  Speaker 3: company charges a price for a drug in Australia, it
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  Speaker 3: could be held to that price in the US. And
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  Speaker 3: this is a major risk for Big Farmer because the
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  Speaker 3: US is its biggest market, that is where it gets
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  Speaker 3: its greatest profits. So it's causing a domino effect of
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  Speaker 3: pressure on countries like Australia, countries all around the world
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  Speaker 3: to pay more for drugs.
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  Speaker 1: It's such an interesting thing sitting alongside the tariff dispute,
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  Speaker 1: isn't it, Where Donald Trump really doesn't care what the
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  Speaker 1: situation is for Australian consumers or for Australian manufacturers. It's
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  Speaker 1: all about what the American consumer can get independence.
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  Speaker 4: For years, hard work in American citizens were forced to
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  Speaker 4: sit on the sidelines as other nations got rich and powerful,
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  Speaker 4: much of it at our expense. But now it's our
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  Speaker 4: turn to prosper and in so doing use trillions.
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  Speaker 1: And America's medication and drug and healthcare system is notoriously expensive,
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  Speaker 1: and I would say unfair. That's my biased Australian perspective.
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  Speaker 1: How can it possibly be that Australians end up worse
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  Speaker 1: off than Americans in men notoriously all full healthcare system.
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  Speaker 3: Yeah, So this is the issue, is that a lot
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  Speaker 3: of countries around the world negotiate as single payer nations
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  Speaker 3: like Australia, meaning that their government negotiates on behalf of
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  Speaker 3: the whole population. That is just such a radically different
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  Speaker 3: situation to America.
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  Speaker 2: Where almost every.
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  Speaker 3: Drug that gets approved by the FDA in America by
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  Speaker 3: the regulator is funded by and the funding is underpinned
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  Speaker 3: by insurance companies, largely because up to ninety percent of
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  Speaker 3: Americans do hold insurance, and it's really for the people
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  Speaker 3: that don't hold that insurance.
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  Speaker 2: They're the ones that are incredibly vulnerable.
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  Speaker 3: Millions and millions of Americans paying very high prices for
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  Speaker 3: drugs when they are actually the most disadvantaged in the country.
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  Speaker 3: So you're talking about very, very different systems that are
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  Speaker 3: impossible to compare. Nevertheless, these systems are being tethered to
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  Speaker 3: one another, causing this domino effect of price pressure around
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  Speaker 3: the world.
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  Speaker 1: There are other complexities in this health funding system. One
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  Speaker 1: that you've been writing about is the situation for people
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  Speaker 1: who suffer migraine. If you know anyone who has real migraines,
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  Speaker 1: it's not like a headache. It is a debilitating, multi
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  Speaker 1: day experience where you lie in a darkened room and
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  Speaker 1: kind of throw up and can't tolerate light, and medication
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  Speaker 1: is almost an essential part of life for those sufferers.
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  Speaker 1: What's happening to those people who live with migraines right now.
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  Speaker 3: Well, migraine is a very good example of a condition
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  Speaker 3: in which there are emerging effective drugs for that condition. Specifically,
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  Speaker 3: these new drugs specific for migraine. A few of them
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  Speaker 3: have been approved in Australia, but they've been approved with
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  Speaker 3: a lot of restrictions, so our system says, well, you
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  Speaker 3: need to try these other drugs first. You need to
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  Speaker 3: fail these other drugs before we will give you funded
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  Speaker 3: access to these specific migraine drugs. There are a number
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  Speaker 3: of processes in our pharmaceutical benefits scheme that is forcing
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  Speaker 3: down the price of drugs in ways that are potentially
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  Speaker 3: detrimental to patients, detrimental to pharmaceutical companies because their newer
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  Speaker 3: effective drugs are being compared against very old, sometimes generic drugs,
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  Speaker 3: and they're saying, well, you're not giving us a fair price.
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  Speaker 3: All of these aspects of our what is really widely
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  Speaker 3: regarded as a system that is not fit for purpose
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  Speaker 3: in the modern age of innovative medicines, colliding up against
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  Speaker 3: this global market disruption and leaving us particularly vulnerable because
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  Speaker 3: farmers just saying well, we're not They're almost able to
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  Speaker 3: use it as a negotiating tool while your system's broken.
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  Speaker 3: It is not fair. It is not offering us fair prices.
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  Speaker 3: Therefore we're not going to launch our drugs in your market.
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  Speaker 3: And that's quite a true thing. But it's also a
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  Speaker 3: convenient thing for pharmaceutical companies in this market where they
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  Speaker 3: don't want Australia's price to be pegged to the US.
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  Speaker 2: Big farmer is flush with cash. Is obesity drugs and
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  Speaker 2: new cancer treatments drive significant revenue. Investors are also hoping AI.
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  Speaker 1: These of course, are some of the most rapacious commercial
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  Speaker 1: organizations on the planet, and that's how they become so successful.
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  Speaker 1: You know, they invest a huge amount of money in
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  Speaker 1: research and development. They quite brutal in the choices that
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  Speaker 1: they make about drugs that they're going to fund and
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  Speaker 1: drugs that they're not, and it of course has to
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  Speaker 1: be a commercial consideration for them. It's almost like pure
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  Speaker 1: capitalism coming up against the government which has to can
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  Speaker 1: consider the benefit of taxpayers and the benefit of patients.
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  Speaker 1: It's really intriguing.
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  Speaker 3: Battles, it really is. And I'm not sure how true
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  Speaker 3: that is. I don't think these are rapacious organizations. I
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  Speaker 3: do think that they've got incredibly tough commercial realities. Sometimes
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  Speaker 3: we do see you know, exploitative or poor behavior. But
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  Speaker 3: by and large, I think pharmaceutical companies are in the
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  Speaker 3: business of investing enormous amounts of money with incredibly long
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  Speaker 3: time frames and high failure rates of drug development.
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  Speaker 2: They're fundamentally in the business of developing medicines that save
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  Speaker 2: lives and make people better.
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  Speaker 3: And I think that big farmer gets a bad rap. Yes,
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  Speaker 3: they do need to make profit. That's just a commercial reality.
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  Speaker 3: They can't produce drugs and an invest in research and
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  Speaker 3: development without turning a profit. But as well they have
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  Speaker 3: a social contract. You know, this is an industry like
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  Speaker 3: no other medicine, and so navigating all of these commercial
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  Speaker 3: but also the moral aspects I think is very very
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  Speaker 3: interesting what we're seeing play out.
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  Speaker 1: One of the notable features of Australia's system is that,
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  Speaker 1: unlike in say the United States, you're not bombarded with
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  Speaker 1: ads here for particular medications. You know, there are certainly ads,
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  Speaker 1: but they're sort of a bleak and they might end with,
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  Speaker 1: you know, talk to your doctor about what's best for you.
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  Speaker 1: This ad was brought to you by you know, Eli
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  Speaker 1: Lilly or whatever, and we're talking about how awful it
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  Speaker 1: is to live with diabetes, and maybe your doctor's got
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  Speaker 1: some solutions and then they send the doctors on a
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  Speaker 1: conference and the doctors are aware of Eli Lily's offerings
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  Speaker 1: in that area. In America, the ads are like, this
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  Speaker 1: is the drug you need. It's going to make your
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  Speaker 1: life better. And the hope is that you'll go to
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  Speaker 1: your doctor and ask for this drug by name.
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  Speaker 2: Excluded terms and conditions apply. Ask your doctor about once
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  Speaker 2: weekly Mailgarre.
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  Speaker 1: Is that something that the drug companies want to change
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  Speaker 1: here in Australia to be able to advertise direct to consumers?
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  Speaker 3: Oh? Well, they might want to, but I just think
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  Speaker 3: there's a snowballs chance in hell. I mean, we've got
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  Speaker 3: incredibly tough laws on direction advertising of medicines. They are
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  Speaker 3: being circumvented to some extent, particularly by telehealth companies, But
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  Speaker 3: fundamentally those strong regulations that we have in Australia.
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  Speaker 2: That forbid the direct.
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  Speaker 3: Advertising of medicines I would not see as being at
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  Speaker 3: all likely to change anytime in the future.
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  Speaker 1: Are we going to get cheaper drugs anytime soon? Or
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  Speaker 1: we're going to get better access to drugs? Is there
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  Speaker 1: a shorter term fix for this?
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  Speaker 3: What this ultimately comes down to is that the government
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  Speaker 3: will need to pay more for medicines.
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  Speaker 2: We have contained the budget.
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  Speaker 3: Of the Pharmaceutical Benefits scheme very very well for a
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  Speaker 3: couple of decades. It's one of the most efficient aspects
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  Speaker 3: of our health system. When health inflation has been very high,
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  Speaker 3: health costs have been going up exponentially, the PBS budget
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  Speaker 3: has not risen all that much faster than inflation. The
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  Speaker 3: Labor government in particular is very committed to cheaper medicines
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  Speaker 3: for the population. It's a central plank of their political philosophy.
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  Speaker 3: We've seen the copay reduce it's now just twenty five
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  Speaker 3: dollars for patients.
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  Speaker 2: They're highly committed to that.
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  Speaker 3: So if medicines are going to be more expensive, it's
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  Speaker 3: going to be for the government, not really the consumer
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  Speaker 3: when you're talking about PBS drugs, unless you know something
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  Speaker 3: radically changes with the future government. But what is also
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  Speaker 3: likely is that access to medicines, you know, that's at
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  Speaker 3: high risk of eroading in Australia in the future. So
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  Speaker 3: drugs for conditions that there can't be agreement reached between
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  Speaker 3: pharmaceutical companies who are demanding higher prices and Australia may
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  Speaker 3: end up only available on private scripts. You know, you've
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  Speaker 3: already got the Munjaro example. An enormously profitable private market
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  Speaker 3: has emerged. I think that's quite unprecedented and we may
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  Speaker 3: see more of that.
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  Speaker 1: Natasha, thank you very much, Thank you, Claire. Natasha Robinson
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  Speaker 1: is The Australian's Health editor. You can read the series
• 15:16
  Speaker 1: she's created with Penny Tims right now at The Australian
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  Speaker 1: dot Com dot a you