Butler said he supported the drugs remaining on the PBS because of their clinical benefits.<\/p>\n
However, the advisory committee has also called for a rapid review of the use of MS drugs, set to be completed before the end of the year, when a final decision will be made.<\/p>\n
It comes after a number of pharmaceutical companies have pulled drugs<\/a> \u2013 or said they could be withdrawn \u2013 from the PBS in recent months.<\/p>\n The moves have led to key questions about the government scheme: why are some PBS treatments under threat, and how much is US policy influencing this?<\/p>\n How does the PBS work?<\/p>\n In Australia, to keep prices down, about 90% of medicines are subsidised through the PBS.<\/p>\n This enables affordable access to medicines that would otherwise cost thousands of dollars.<\/p>\n An independent expert body, the Pharmaceutical Benefits Advisory Committee (PBAC), first evaluates the health benefits and cost-effectiveness of a drug and recommends whether it should be subsidised.<\/p>\n Sign up for the Breaking News Australia email<\/a><\/p>\n The government then negotiates and sets the wholesale price of each PBS medicine with the relevant drug company \u2013 but does not actually buy them. Instead, it subsidises the retail price at the chemist, at $7.70 for pensioners and $25.00 for others.<\/p>\n The cost of the PBS to the government is the difference between the wholesale and the retail price.<\/p>\n The PBS system means a company gets access to a much bigger and guaranteed market: if a drug is cheaper, many more people will use it and doctors will more readily prescribe it. This increased volume can offset the wholesale price reduction.<\/p>\n What is reference pricing, and is it a factor in this case?<\/p>\n The PBS also uses reference pricing, which works on the premise that if multiple different drugs treat the same condition \u2013 and all of them are safe and similarly effective \u2013 the lowest-cost drug will set the pricing benchmark.<\/p>\n And if a cheaper treatment becomes available, the government informs all other manufacturers that it will cut what it pays for their drugs.<\/p>\n If the company doesn\u2019t accept this price change, the government can remove that particular drug from the PBS, while leaving the cheaper ones on it.<\/p>\n In the case of MS treatments Kesimpta and Ocrevus, a third drug, Briumvi (produced by TG Therapeutics), was added to the PBS in late 2025 at a cheaper cost.<\/p>\n The government told drug companies Novartis and Roche that it would now be paying them the same price as it pays for Briumvi.<\/p>\n While pricing negotiations are kept confidential, there were reports this might mean a 50% price cut<\/a> for the drug companies.<\/p>\n In the US, Kesimpta can cost more than US$10,000 a month. In Australia, a monthly dose of Kesimpta costs the government $2,231, while a course of ocrelizumab costs $16,500 \u2013 of which patients contribute just $25 under the PBS.<\/p>\n Roche\u2019s general manager, Dr Nic Horridge, has said: \u201cThis cut, should it stand, would make it impossible to keep Ocrevus on the PBS.\u201d<\/p>\n The advocacy group MS Australia also says it is wrong to treat the three treatments as the same because MS is a heterogeneous disease and no single therapy is best for all patients. Roche and Novartis also say their drugs are innovative and unique, and that cutting prices punishes this innovation.<\/p>\n The convener of advocacy group the Australian Fair Trade & Investment Network (Aftinet), Dr Patricia Ranald, has studied the PBS for 20 years. Ranald rejects the argument that high US prices fund life-saving medical research and innovation, and that prices should also be relatively high in Australia.<\/p>\n \u201cThey [drug companies] are amongst the most profitable companies in the world, and that\u2019s because they have a 20-year monopoly on medicines that people really need,\u201d Ranald says.<\/p>\n \u201cIt\u2019s true they spend money on research and development, but they spend more money on promoting their products. What is going on at the moment is really a concerted push at the US government level and at the pharmaceutical company level to just get higher prices across the board.\u201d<\/p>\n skip past newsletter promotion<\/a>Free newsletter | When needed<\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n after newsletter promotion<\/p>\n Is there pressure in the US?<\/p>\n Donald Trump has argued pharmaceutical companies have been discounting drugs to get into foreign markets, which is offset by higher prices charged in the US.<\/p>\n In 2025, he introduced<\/a> the \u201cMost Favoured Nation\u201d drugs pricing policy, requiring US prices to align with the lowest prices paid in other developed countries.<\/p>\n Critics of the policy say pharmaceutical companies will not compromise their US profits, and will either raise their prices in smaller markets or pull out of those markets altogether. Other countries with systems similar to the PBS, such as Sweden, are facing similar pressures<\/a>.<\/p>\n The head of the Public Health<\/a> Association of Australia (PHAA), adjunct professor Terry Slevin, says drug companies are leveraging this situation.<\/p>\n \u201cLike every business they will seek to maximise shareholder return,\u201d he says.<\/p>\n \u201cWe need a strong government determined to protect its interest and the interest of Australian patients requiring pharmaceuticals, and the Australian taxpayer who helps to subsidise them.\u201d<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/06\/1782483732_529_2998.jpg\")
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