Presentation (CTI)

OBJECTIVES: In Australia, Pharmaceutical Benefits Scheme (PBS) prices are set through a value-based framework incorporating cost-effectiveness assessment and comparator reference pricing. These prices are often substantially lower than in the United States (US). In May 2025, the US administration announced a “Most Favored Nation” (MFN) pricing initiative to align US drug prices with the lowest prices in comparable countries. In December 2025, the Centers for Medicare & Medicaid Services (CMS) introduced the GLOBE and GUARD models to implement MFN, referencing prices from 19 OECD countries, including Australia. Although US-focused, MFN could alter global pricing and launch incentives, especially in lower-priced markets. This study assessed whether Australia’s pricing framework may increase the risk of delayed or withdrawn launches for innovative medicines.
METHODS: New molecular entities first reimbursed through the PBS in 2025 were identified; products with previously reimbursed indications were excluded. Australian list prices were compared with those in the other 18 MFN reference countries included in the GLOBE and GUARD models. Prices were ranked and adjusted for gross domestic product (GDP) per capita purchasing power parity (PPP), consistent with MFN methodology, to reflect economic comparability.
RESULTS: Twenty-two drugs met the inclusion criteria. Australia ranked among the two lowest-priced countries for 11 of 22 products. The median Australian price rank was 3 (range: 1-14, where 1 indicates the lowest price). After GDP-PPP adjustment (factor: 1.19), Australian prices remained below the US benchmark for 17 products. On average, Australian prices were 57% lower than corresponding US list prices.
CONCLUSIONS: Prices for recently reimbursed drugs in Australia are relatively low among MFN reference countries, potentially increasing the risk of future launch delays or de-prioritization under US price benchmarking. Allowing higher list prices while maintaining confidential net prices may help mitigate launch risk and support earlier patient access in Australia under evolving global MFN dynamics.