By Andrew Klein   18^th November 2025

They are not just selling medicine. They are selling a doctrine: that your health is a product, and its price is whatever they can take. In the shadow of this global enterprise, a quiet war is being waged for the soul of healthcare itself. On one side stands a for-profit model designed for extraction. On the other stands Australia’s Pharmaceutical Benefits Scheme (PBS), a bastion of public health now under sustained assault.

This is an investigation into the machinery of that assault.

The Bulwark: Australia’s PBS

Established in 1948, the PBS is a testament to the idea that healthcare is a public good, not a luxury. It operates on a simple, powerful principle: the government acts as a single, powerful negotiator for 25 million people, leveraging this collective power to make essential medicines affordable for all.

The scheme is available to every Australian with a Medicare card. As of 2025, the maximum co-payment is $31.60** for general patients and **$7.70 for concession card holders. A Safety Net caps annual spending, protecting households from financial ruin. The scheme’s integrity is guarded by the independent Pharmaceutical Benefits Advisory Committee (PBAC), which rigorously assesses whether a new drug is clinically effective and cost-effective enough to be listed. This evidence-based approach is what makes the PBS a world-class system—and a primary target for an industry built on maximising profit.

The Assault: American Pressure and the Profit Motive

The U.S. pharmaceutical industry, where prices are on average 370% higher than in Australia, views the PBS as an “egregious and discriminatory” barrier to profits. Their campaign is multi-pronged and relentless.

Their goal is to force a system where “the market” (i.e., their pricing power) dictates cost, not a government’s assessment of value. The stark reality of this difference is seen in the price of common medicines. In Australia, a script for cholesterol drug Lipitor costs the patient around $31.60**. In the U.S., the same drug can cost **around $2,000. For a life-changing autoimmune drug like Humira, the cost to an Australian is $31.60**, while an American faces a bill of approximately **$11,000. This disparity is not due to shipping or manufacturing costs; it is the difference between a system designed for access and one designed for extraction.

A major victory for this campaign was the 2005 Australia-U.S. Free Trade Agreement. A key change was the creation of two drug categories: F1 (patented) and F2 (generic). The agreement effectively outlawed “reference pricing,” a practice where the price of a new, patented drug was benchmarked against cheaper, existing generics. This single change made it significantly harder to contain the prices of the newest, most expensive drugs, slowly inflating the PBS’s cost.

The Illusion: Research & Development vs. Marketing & Profit

The pharmaceutical industry’s primary justification for astronomical prices is the high cost of Research & Development (R&D). The data reveals a different story.

A global analysis of the 20 largest pharmaceutical companies during the peak pandemic years (2020-2022) found they spent a combined $377.6 billion on dividends, share buybacks, and executive compensation. This staggering figure amounted to 83% of their total profits and was nearly as much as they spent on R&D. As UNAIDS head Winnie Byanyima stated, this proves the claim that enormous profits are necessary for innovation is a “political myth.”

The financial priorities of the industry are clear. The profit motive prioritises returns to investors over equitable access or even reinvestment in R&D. Globally, marketing budgets often rival or exceed R&D budgets, a business model that depends on creating demand for new drugs, often by pathologising normal human experience. The creation of a “pill for personality” or a “vaccine for violence” would be the ultimate, most lucrative frontier. The slope is not just greased; it is a downhill racetrack.

The Defences: Regulatory Capture and Legal Labyrinths

When systems meant to protect the public are influenced by the very industries they regulate, it creates a form of “regulatory capture.”

Bodies like Medicines Australia create their own codes of conduct and enter into strategic agreements with the government. While providing a framework, this self-regulation often serves to protect the industry’s image and practices from more stringent independent oversight.

When a drug causes harm, an Australian citizen must face a legal system stacked against them. While a company cannot hide behind TGA approval as a full defence, they often rely on the “learned intermediary” principle, arguing they only needed to warn the doctor, not the patient. Pursuing a claim means an individual must litigate against a corporation with near-limitless legal resources. High-profile cases show victory is possible but is always a long, complex, and emotionally devastating process.

The Silent Crisis: The Unreported Harm

A critical failure in the safety net is the systemic under-reporting of adverse drug reactions to the TGA. Reporting by doctors is voluntary and in decline, with estimates that over 95% of adverse reactions go unreported. This means dangerous side effects can remain hidden for years, exposing thousands to unknown risks, while the system relies heavily on mandatory reporting from the pharmaceutical companies themselves—a profound conflict of interest.

Conclusion: A Choice of Futures

The battle for the PBS is a proxy for a larger conflict. It is a choice between two futures: one where medicine is a public good, governed by evidence and a duty of care, and another where it is a purely financial instrument, governed by quarterly reports and shareholder value.

The pressure to abandon our model for their profit will only intensify. The question is whether we value a system that provides for all, or one that prices out the vulnerable. The integrity of our healthcare, and the very principle of a fair go, depends on the answer.