This report discusses the potential for the Trump administration to ask Australia to water down the Pharmaceutical Benefits Scheme (PBS). As it did over 20 years ago during negotiations for the Australia United States Free Trade Agreement, the US pharmaceutical industry is lobbying the US Government to recognise the PBS as a non-trade barrier. It is possible that unless Australia agrees to dismantle or water down the PBS, the Trump administration could impose retaliatory tariffs.

The report argues that if the PBS is watered down, the price of medicine in Australia will go up. The Australian Government has a sovereign right to design policy that benefits Australians and should continue to use its buying power to deliver cheaper medications for Australian consumers without this being considered a restriction on trade.