The Pharmacy Guild of Australia’s president, Trent Twomey, has warned our domestic production of pharmaceuticals could be at risk if US President Donald Trump slaps a 200 per cent tariff on imports.

Trump announced on Tuesday, local time, he intends on using the tariffs to bring manufacturing back to the US.

The president said he planned to impose the tariffs “very soon”, indicating a grace period of between a year and 18 months.

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Trump officials went on to explain formal details of the plan would be available at the end of the month.

Pharmaceutical products are the third-biggest category in our trade with America, behind beef and gold.

Last year, Australia exported about $2.2 billion of pharmaceutical good to the US.

“(The US is our) largest market, so they are going to really struggle,” Twomey said.

“You cannot have domestic manufacturing in Australia if you are only relying on 27 million people (as a market). It doesn’t work.

“The only way domestic manufacturing works in Australia with our high energy and our high wages, and that’s just a fact, is if we rely on exports, and if the biggest market of our export, the United States, slaps on the tariffs then it just starts to crumble and fall apart.

“It means the next time we have a global pandemic, or the next time supply chains start to fracture, other countries will do quite rightly do what they should, they will say ‘sorry, you can’t export to Australia’, we need that for our domestic and our country goes without.

“It is not a price at pharmacy issue; it is more of a sovereign manufacturing issue that we need to protect.”

US drug companies angry at the PBS

Sunrise’s Nat Barr asked Twomey why US drug companies were mad.

Twomey said the tariffs were a result of US drug companies and their intense dislike for our PBS.

“The first thing you need to realise at home, the price you are charged by your pharmacy is actually going down, not up,” Twomey said.

“(The) government slashed the maximum price of medicines from $42 down to $31. It is being slashed again down to $25 on January 1, so you don’t need to worry.

“The worry is how much it is going to cost Canberra to import the medications they then sell to you.

“The real worry there is that if President Trump forces the companies in America to charge less, that drug company is still going to want to make their global profit.

“So, they are going to push the price to charge our taxpayer up.

“The real enemy for the Americans is not the Australian PBS system, the real enemy for them is their pharmacy benefit managers over there. They are trillion-dollar middlemen, they are clipping the ticket on the way through.

“If Mr Trump is angry, I get it, but he shouldn’t be angry about Australia’s world class PBS, he needs to be angry at the trillion-dollar corporate rip-offs in America, that are charging his citizens more money.

“That’s where he needs to direct his anger.”

Prices won’t change for Australians

Barr asked if prices for pharmaceuticals would change in Australia.

“Firstly, the PBS enjoys bipartisan support,” Twomey began.

“This is not a football to be kicked around in Canberra. Specifically, to answer your question, only 10 per cent of medicines we have in Australia are manufactured locally.

“Now, if we are importing 90 per cent of our medication, we can’t afford to lose that domestic manufacturing capability.

“And if those drug companies, like CSL, in Melbourne, are slapped with a 200 per cent tariffs on exports to the United States, that’s going to make their companies unviable here in Australia, if they become solely reliant on the domestic market.

“The big risk for that is they manufacture our vaccines. “

Twomey said Australia wouldn’t have been able to get through the pandemic if it didn’t have onshore manufacturing of pharmaceuticals.

“We would not have been able to get through the global pandemic if we did not have domestic manufacturing, and that really is a national security issue,” he said.