PBS MS drug pricing dispute and review timeline
Consensus Summary
The Australian government is conducting a rapid review of MS drugs (Ocrevus, Kesimpta, Lemtrada) on the PBS, which must be completed by December this year, to ensure their continued availability and cost-effectiveness. The review follows the addition of Briumvi to the PBS in late 2025, which triggered price negotiations and potential cuts of up to 50% for other drugs. Drug companies Roche and Novartis have argued that such cuts would make it impossible to keep their drugs on the PBS, while the government insists on maintaining access for patients. The dispute is part of broader tensions between Australia’s PBS system and global pharmaceutical companies, including US pressure to align prices with lower international rates. Health Minister Mark Butler has confirmed the drugs will remain on the PBS during the review, but the long-term pricing and availability remain uncertain. The PBS uses reference pricing, where the cheapest drug sets the benchmark, and patient co-payments are $25 or $7.70 for concession.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- The PBS rapid review of MS drugs (Ocrevus, Kesimpta, Lemtrada) will be completed by December this year
- The PBAC recommended a rapid review of MS drug use on the PBS to align with contemporary evidence
- Ocrevus, Kesimpta, and Lemtrada will remain on the PBS during the review
- The PBS patient co-payment is $25 for non-concession and $7.70 for concession
- Briumvi was added to the PBS in late 2025 at a cheaper cost, triggering price reviews for Ocrevus and Kesimpta
- Roche’s general manager stated that a 50% price cut for Ocrevus would make it impossible to keep it on the PBS
- The US introduced the 'Most Favoured Nation' drugs pricing policy in 2025, requiring US prices to align with the lowest prices paid in other developed countries
- Health Minister Mark Butler acknowledged in June that the PBS needs reform
Points of Difference
Details reported by only one source:
- The government negotiates and sets the wholesale price of each PBS medicine with drug companies, but does not actually buy them; it subsidises the retail price at the chemist.
- The PBS system means a company gets access to a much bigger and guaranteed market if a drug is cheaper, offsetting the wholesale price reduction.
- The PBS uses reference pricing, where the lowest-cost drug sets the benchmark for others treating the same condition.
- The government told drug companies Novartis and Roche that it would now be paying them the same price as it pays for Briumvi, potentially resulting in a 50% price cut.
- Kesimpta costs the government $2,231 per month in Australia, while a course of ocrelizumab costs $16,500.
- In the US, Kesimpta can cost more than US$10,000 a month.
- The HTA Review in 2024 found that companies aren’t always showing evidence to support why their drug is better or unique and should cost more.
- Dr Patricia Ranald, convener of Aftinet, has studied the PBS for 20 years and rejects the argument that high US prices fund life-saving medical research and innovation.
- The PBAC first evaluates the health benefits and cost-effectiveness of a drug and recommends whether it should be subsidised.
- MS patients feared they would have to pay out as much as $33,000 for their prescriptions privately if the drugs were removed from the PBS.
- The PBAC met last week to discuss the pricing stand-off, with the chair writing to Mr Butler outlining the 'key points' of their advice.
- Roche, Novartis, and Sanofi Genzyme rejected a request to slash costs by up to 40 to 50 per cent, arguing it is commercially unsustainable.
- Eli Lilly withdrew diabetes drug Mounjaro from the PBS listing process in April, citing the price Australia was willing to pay as too low.
- US pharmaceutical companies have been lobbying against the PBS, arguing its pricing processes undervalue innovation and threaten billions of dollars in lost sales.
Contradictions
Conflicting information between sources:
- The Guardian states the review will be completed before the end of the year, while ABC states it will be completed by December this year (both are consistent, but Guardian also mentions 'before the end of the year' in addition to 'late 2025').
- The Guardian mentions a 50% price cut for drug companies, while ABC mentions a 40 to 50 per cent cost cut (both are consistent, but ABC specifies a range).
- The Guardian states Kesimpta costs the government $2,231 per month, while ABC does not specify the government cost but mentions private costs of up to $33,000 per year for Ocrevus.
Source Articles
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