Affordable medicines

Thanks to government subsidy through the Pharmaceutical Benefits Scheme (PBS), every Australian has access to a large range of prescription medicines at a subsidised price. The PBS subsidises more than 890 unique medicines, which is actually 80 per cent of the prescription medicines available in Australia.¹ Learn more about the PBS at www.pbs.gov.au.

Medicines that are not available through the PBS may be available on a private prescription. For these medicines, a person must pay the full price of the medicine, which may be significantly more than the PBS-subsidised price.

No. You can be confident that any prescription medicine available in Australia, regardless of whether it is available through the Pharmaceutical Benefits Scheme (PBS) or on private prescriptions, has been thoroughly assessed.

Before any medicine can be prescribed by your doctor, it must first have undergone a rigorous evaluation of its quality, safety and effectiveness by the Therapeutic Goods Administration (TGA).

The amount you contribute to the cost of your PBS-listed medicine will depend on whether you are a ‘general’ patient or a ‘concessional’ patient.²

General patients – pay up to $34.20 for each prescription (from 1 January 2011).²
Concessional patients – pay up to $5.60 for each prescription (from 1 January 2011).² This includes people who receive certain pensions, benefits or healthcare concession cards, or who meet criteria for being disadvantaged.

No. In fact, people who require many prescriptions over the period of one year can receive even further reductions once they reach the payment threshold set by the government. This is known as the PBS ‘safety net’.

General safety net – $1317.20 per year (from 1 January 2011).² People who ordinarily pay $34.20 for each PBS-listed medicine pay $5.60 per prescription once they reach the safety net.²

Concessional safety net – $336 per year (from 1 January 2011).² People who ordinarily pay $5.60 per prescription, receive their PBS-listed medicines for free once they reach their safety net.²

On January 1 of each year, the cost of Pharmaceutical Benefits Scheme (PBS)-listed medicines, along with the safety net is adjusted with inflation.² For more details on the government safety net visit www.pbs.gov.au/info/about-the-pbs

The cost of medicines not covered by the Pharmaceutical Benefits Scheme (PBS) may vary broadly, from a few dollars to several thousand. Ultimately, you pay the full cost of a medicine that the PBS would otherwise subsidise. Some private prescriptions may be subsidised through private health insurance, so it’s best to check with your insurer to see what prescriptions they may cover.

In 2010, the PBS subsidised $8.39 billion in medicine costs.³ The remainder of the cost, $1.38 billion, was paid by Australian patients. So on average, an Australian citizen pays less than 20 per cent of the actual cost of their PBS-listed prescription medicine.³

A medicine must first be rigorously evaluated for quality, safety and effectiveness by the Therapeutic Goods Administration (TGA). Once the TGA approves a medicine for use in Australia, a company can also apply to have their medicine listed on the Pharmaceutical Benefits Scheme (PBS).

The Pharmaceutical Benefits Advisory Committee (PBAC) is an independent and expert advisory committee that makes recommendations to the Minister for Health and Ageing on listing medicines on the PBS. The PBAC make a thorough assessment of the relative clinical and cost-effectiveness of the medicine or vaccine compared with other treatments which may already be available. They provide a recommendation to the Government for a PBS-listing decision.

No. The PBS is unique to Australia. However, several countries subsidise the cost of medicines for their citizens in other ways.

The PBS was a social policy initiative introduced in 1948 by Prime Minister Ben Chifley.⁴ It has evolved from supplying a limited number of ‘lifesaving and disease preventing medicines’ free-of-charge to certain groups within the community, to a broader, universally subsidised scheme for all Australians. In 1960 a patient contribution (co-payment) was introduced, which still stands today.⁴ Find out more about the PBS at www.pbs.gov.au

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