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What if the cost of life-saving medicine in Australia skyrocketed overnight – all because of a trade war?
That’s the risk as Big Pharma, led by U.S. giants like Pfizer, Johnson & Johnson, and Merck push Washington to slap tariffs on Australian pharmaceuticals.
Their target? The Pharmaceutical Benefits Scheme (PBS), which they claim “undervalues” American drug innovations. But this isn’t just about trade – it’s about pricing power, and Australian consumers could end up paying the price.
For decades, the PBS has ensured Australians can access affordable medicine, negotiating fair prices to keep costs down. Meanwhile, the top U.S. drug companies made $176 billion in profits in 2022; hardly struggling. Yet, they argue the PBS restricts their ability to charge market rates. In reality, it prevents price gouging, a practice that has made U.S. drug prices among the highest in the world.
If tariffs go ahead, the consequences could ripple through the Australian economy. ASX-listed pharmaceutical giants like CSL, Cochlear, and ResMed, which rely on smooth trade with the U.S., could see costs rise and margins shrink.
Aussie investors would feel the impact, and higher drug prices could strain an already burdened healthcare system, especially as Australia’s population ages.
But Australia isn’t backing down. Trade experts say the U.S. is unlikely to sanction a key ally over pharmaceuticals, and the Albanese government has vowed to defend the PBS. Still, this fight goes beyond trade – it’s about ensuring life-saving medicines remain a right, not a privilege.
And that’s a battle Australia can’t afford to lose.
What are the best and worst-performing sectors this week?
The best-performing sectors include Energy, up over three per cent, followed by Financials and Healthcare, both up over 2%. The worst performing sectors include Consumer Staples, slightly down, followed by Materials, up just under 1% and Consumer Discretionary, up over one per cent.
The best-performing stocks in the ASX top 100 include Block Inc., up over 11%, followed by Challenger Limited, up over 10%, and IGO Limited, up over 8%.
The worst-performers include James Hardie Industries, down 7%, followed by Endeavour Group, down over 4% and ALS Limited, down over 3%.
What’s next for the Australian stock market?
Buyers roared back into the stock market this week, driving the All Ordinaries Index up over 1.5%. This marks the first positive week over the last five, with the 8,000-point level acting as a key support. But is this the start of a powerful rebound – or just a head fake before another leg down?
A decisive break above 8,200 could ignite real momentum, shifting the tide in favour of the bulls. But if 8,000 cracks, the next key battleground lies at 7,800, where buyers will need to prove their strength.
Fuelling this week’s surge are strong gains in materials and financials, giving the rally real substance.
Energy and utilities took the lead, signalling a rotation into essential, defensive plays, while tech stocks got hammered as investors shunned speculative bets. With U.S. tariff news adding uncertainty, the market’s shift toward stability speaks volumes.
One thing is clear: Opportunity is knocking.
The brutal sell-off in banking stocks looks like an overreaction, creating prime conditions for sharp investors to pounce on undervalued plays.
This is the kind of market where fortunes are made. Quality stocks are trading at a discount, and those who are prepared won’t just watch from the sidelines – they’ll take action.
As I’ve said before though, being ready is only half the battle. The moment to act might have just arrived.
For now, good luck and good trading.
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Disclaimer: While Wealth Within holds an Australian Financial Services License (AFSL:226347) the information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
