‘Foreign freeloading nations’: Trump takes aim at drug companies in latest threat to PBS

3 months ago 26

Washington: US President Donald Trump has blamed “foreign freeloading nations” for the high drug prices faced by Americans and told pharmaceutical firms to negotiate harder with other countries, in a new threat to programs such as Australia’s Pharmaceutical Benefits Scheme.

Trump issued letters to the bosses of 17 drug firms on Thursday (Friday AEST) demanding they extend “most favoured nation” pricing to the US Medicaid scheme, and guarantee that pricing level for new drugs. It means other comparable, high-income nations could not be offered cheaper prices than the US.

US President Donald Trump in the White House this week.

“Domestic MFN pricing will require you, and all manufacturers, to negotiate harder with foreign freeloading nations,” Trump wrote in the letters.

“US trade policy will endeavour to support this. However, increased revenues abroad must be repatriated to lower drug prices for American patients and taxpayers through an explicit agreement with the United States.”

The letters were sent to major drugmakers including Pfizer, Eli Lilly, AstraZeneca and Johnson & Johnson, and published on Trump’s social media.

They did not mention Australia but referred to putting “an end to the free ride of American innovation by European and other developed nations”.

Under the PBS, Australians can buy life-saving drugs worth thousands of dollars for as little as $31.60 a script after the government negotiates with the drug company to secure a lower price based on buying in bulk.

Trump’s letter makes explicit instructions to drug firms to “negotiate harder” and return those extra profits to American patients and taxpayers.

“Other nations have been freeloading on US innovation for far too long; it is time they pay their fair share,” he wrote, giving firms until September 29 to commit to the goals.

It was not immediately clear how Trump’s instructions would intersect with the PBS more broadly. Treatment of pharmaceuticals is already managed under the US-Australia free trade agreement.

But American drugmakers have long harboured other gripes against the PBS, including that it restricts market access for non-listed products, or undervalues innovative products.

An industry lobby group, Pharmaceutical Research and Manufacturers of America, identified the PBS on a list of “egregious and discriminatory” policies in a submission to the US Trade Representative this year, saying it threatened market competitiveness.

Trump’s latest pharmaceutical missive comes as he prepares to sign executive orders within hours that will set new tariffs on the US’s major trading partners, including a potential increase to the “baseline” tariff rate of 10 per cent, currently applied to imports from Australia.

Trump has said the rate was likely to rise to 15 or 20 per cent, but the Australian government has been kept in the dark about whether that would also apply to Australia.

“Those discussions are taking place with the trade team today,” White House press secretary Karoline Leavitt said on Thursday in Washington, referring to tariff rates for countries that had not signed a deal with Trump.

“The answer to that question will be in the executive order … I won’t get ahead of the president on that baseline.”

Leavitt said the president was fielding phone calls from world leaders and there was still time for a trade “deal” to be struck before midnight in Washington, ahead of the tariffs going into effect on Friday.

Meanwhile, a legal challenge to most of Trump’s tariffs was heard in an appeals court on Thursday, Washington time, brought by a number of small businesses including a New York-based wine importer.

In May, the Court of International Trade in Manhattan found Trump’s so-called reciprocal tariffs were illegal because the president lacked the authority to impose them using emergency powers.

Appeal judges appeared unconvinced during Thursday’s appeal. “[The emergency powers law] doesn’t even mention the word ‘tariffs’ anywhere,” Circuit Judge Jimmie Reyna said, in a sign of the panel’s incredulity to a government attorney’s arguments.

Trump thanked his lawyers and wished them well ahead of the hearing.

“Tariffs are making America GREAT & RICH Again,” he posted on TruthSocial.

“They were successfully used against the USA for decades and, coupled with really dumb, pathetic, and crooked politicians, we’re having a devastating impact on the future, and even the survival, of our country. Now the tide has completely turned, and America has successfully countered this onslaught of Tariffs used against it.”

Australia has no tariffs on US imports and the government has maintained a fair deal with Australia would involve US tariffs of zero.

With AP