In a move already sending shockwaves through global markets and health systems, U.S. President Donald Trump has announced a sweeping executive order aimed at slashing the price of prescription medications in America — a decision that experts warn could come at a heavy cost for Australian consumers.
Posted on his Truth Social platform, Mr Trump declared he would sign the order Monday morning (Tuesday AEST), introducing a "Most Favored Nation's Policy" which will require U.S. pharmaceutical companies to match their lowest global price for medications sold abroad.
“I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World,” Mr Trump wrote in his characteristically bold style. “Our Country will finally be treated fairly, and our citizens’ Healthcare Costs will be reduced by numbers never even thought of before.”
While the plan has been hailed domestically in the U.S. as a cost-cutting triumph, global pharmaceutical analysts say the policy could prompt drug manufacturers to raise prices in traditionally lower-cost markets — including Australia — to protect profits and avoid undercutting their American sales.
Impact on Australian Households
Health policy experts warn this could force the Albanese Government to either increase subsidies for the Pharmaceutical Benefits Scheme (PBS) or allow prices of key medications to rise, putting added financial pressure on already stretched Australian households.
“This is not just about America’s drug prices,” said Sydney-based health economist Dr. Lina Verma. “It creates a global pricing ripple. If U.S. companies match their drug prices to the cheapest nations, they’ll have every incentive to raise those cheaper prices — especially in countries like Australia where prices have been kept relatively low through government negotiations.”
Stock Market Reaction
The Australian Securities Exchange (ASX) felt the tremors almost immediately. Several major pharmaceutical and biotech stocks plummeted Monday afternoon, as investors feared the global revenue impact from this unprecedented U.S. move.
What Happens Next?
The Albanese Government has yet to officially respond, but sources inside Parliament suggest health ministers are assessing the long-term cost implications and considering talks with pharmaceutical companies and allied nations.
“This is a game changer,” said political analyst Grace Tarrant. “It’s one of the most globally disruptive health policies we've seen from a U.S. administration, and Australia will need to act fast to cushion its effects.”
As the world watches closely, Australians may soon face higher pharmacy bills — not because of local decisions, but due to an executive stroke from the Oval Office.
