Australia says it won’t raise drug prices after Trump’s 100% tariff on pharmaceuticals imported into US | Tariffs

Health minister Mark Butler says Australia will not bow to pressure from pharmaceutical giants and the Trump administration to scrap consumer price protections on common medicines.

Overnight Australian time, Donald Trump imposed a new 100% tariff on branded drugs imported into the US, trying to force manufacturers to enter into drug pricing deals or produce their products domestically.

It’s the latest challenge for Australian manufacturers selling products to American consumers and comes as the White House seeks changes to Australia’s Pharmaceutical Benefits Program, which guarantees lower prices for prescription holders here.

Under a new executive order signed by Trump, big pharmaceutical companies have 120 days to announce plans to avoid the new tariff, while smaller companies have 180 days.

Companies that agree to move production to the U.S. may see a reduced tariff of 20%, with some cuts given to companies that agree to preferential pricing agreements for U.S. consumers.

Australia exports approximately $2 billion worth of medicines to the United States each year. Manufacturing giant CSL makes up the bulk of these exports, which are expected to receive exemptions from new tariffs, from blood plasma products.

CSL opened a new manufacturing facility in Illinois last month.

Butler said on Friday he would not bow to pressure from the federal government to raise prices in Australia.

“We continue to send the clearest possible messages to the US because we know they are on the ear of big pharmaceutical companies who are trying to dismantle PBS here in Australia and equivalent programs in other countries around the world,” he said.

“We’re not negotiating on these fundamental issues.”

Trump’s plan is expected to exempt generic drugs and maintain more favorable tariff rates for drugs produced in the European Union, Japan, South Korea and Switzerland. The UK has its own separate tariff agreement.

American consumers pay much more for prescription drugs than Australians; This is a source of frustration for Trump as he struggles to ease cost-of-living pressures in the United States. Affordability will be a key issue in the midterm congressional elections in November.

Butler told Channel Seven he would review the federal government’s latest tariff move.

“Obviously our immediate concern is our major exporters who have been sending products to America under a tariff-free free trade agreement for many years, 20 years.

“The largest of these exporters have very large manufacturing operations in the United States, so we are pretty confident they will be realized.”

A CSL spokesman told Guardian Australia the company was reviewing information from the US but did not expect a material impact from the tariffs.

“The vast majority of our trade to the US consists of plasma therapies made entirely from US-sourced plasma, and we recently announced plans to spend $1.5 billion to expand our plasma therapy manufacturing capabilities in the US,” they said.

Communications minister Anika Wells told ABC TV the tariff decision was disappointing.

“But Australia’s PBS is not for sale. We will not compromise on our PBS, it is something Australians value very much and we are truly proud that it is a world leader.”

“The quality of Australian medicines is world class and that is not something we are prepared to compromise on.”

Opposition leader Angus Taylor called for Labor to negotiate exemptions with Trump.

“I have a strong belief that this is ultimately good for Australians and that includes pharmaceuticals and I believe it will now be important for the government to work and prove itself to provide exemptions for Australian exporters on this,” he said.

“This is obviously not welcome news. We do not want to see this. We will work with the government to reverse this or provide exemptions for Australian exporters.”

Australia had received the lowest 10 percent rate under the so-called Independence Day tariff regime that Trump announced in 2025, but that rate was rejected by a US supreme court ruling in February.