The Pharmaceutical Benefits Scheme (PBS) has been a cornerstone of Australian healthcare for decades, ensuring patients can access life-changing medicines at affordable prices. But recent developments — including pharmaceutical companies threatening to withdraw drugs from the scheme and international pricing pressures — have put the spotlight firmly on the PBS’s future.

For GPs and practices that depend on the PBS to treat their patients, understanding these shifts is increasingly important.

The MS Drug Reprieve — and the Underlying Tensions

In mid-July 2026, Health Minister Mark Butler confirmed that three critical multiple sclerosis drugs — Ocrevus, Kesimpta, and Lemtrada — would remain on the PBS after an expert advisory panel decided to maintain taxpayer subsidies. This resolved weeks of uncertainty for the thousands of Australians living with MS who rely on these treatments.

However, this is not a simple victory lap. The Pharmaceutical Benefits Advisory Committee (PBAC) has called for a rapid review of how MS drugs are used on the PBS, to be completed by December 2026. A final decision on the long-term listing of these drugs is still pending.

How Reference Pricing Is Shaking Things Up

At the heart of the standoff is the PBS’s reference pricing mechanism. When a cheaper treatment for the same condition — Briumvi, made by TG Therapeutics — was added to the PBS in late 2025, the government informed Novartis (Kesimpta) and Roche (Ocrevus) that it would reduce what it pays for their drugs to match the cheaper option, potentially a 50% price cut.

Roche’s Australian general manager has said such a cut would make it “impossible” to keep Ocrevus on the PBS. Both companies argue their drugs are innovative and unique, and that reference pricing unfairly punishes research and development. MS Australia also points out that multiple sclerosis is a heterogeneous disease — no single therapy works for all patients.

The US Factor

Behind these local dynamics looms a larger global force. Donald Trump’s “Most Favoured Nation” drugs pricing policy, introduced in 2025, requires US drug prices to align with the lowest prices paid in comparable countries. Critics warn this will push pharmaceutical companies to either raise prices in smaller markets like Australia or withdraw altogether.

We’ve already seen this play out. The breast cancer and endometriosis drug Zoladex was pulled from the Australian market in June 2026, and a life-saving opioid dependency drug, Sublocade, is set to follow by the end of the year. These are not isolated incidents — they signal a broader trend of pharmaceutical companies testing the limits of Australia’s pricing model.

What This Means for GPs and Practices

For GPs, the implications go beyond individual drug withdrawals. The PBS’s stability directly affects clinical decision-making. When a drug is removed from the scheme, GPs must find alternative treatments — which may be less effective, have different side-effect profiles, or require more complex monitoring.

Practices also need to be prepared for more frequent changes to the PBS formulary. If pharmaceutical companies continue to push back on pricing, we could see a growing number of drug discontinuations across therapeutic areas.

On the positive side, the government has acknowledged the PBS needs reform. The Health Technology Assessment (HTA) Review, published in 2024, is already examining how the scheme assesses medicines — including whether it properly accounts for the value of innovative therapies that don’t fit neatly into reference pricing comparisons.

Looking Ahead

The rapid review of MS drug usage due by December 2026 will be a bellwether. If the government and pharmaceutical companies can find a sustainable pricing model that keeps innovative drugs accessible, the PBS can continue its role as a world-leading system. If not, GPs and patients alike will feel the consequences.

For now, the MS drugs remain listed, patients are still getting their treatments, and the system is holding — but the pressure is real, and the coming months will be critical.

This article draws on reporting from The Guardian — read the original here: https://www.theguardian.com/australia-news/2026/jul/16/pharmaceutical-benefits-scheme-pbs-ms-drugs-medicine-us-trump