About the PBS

The Pharmaceutical Benefits Scheme (PBS) began as a limited scheme in 1948, with free medicines for pensioners and a list of 139 ‘life-saving and disease preventing’ medicines free of charge for others in the community.

Today the PBS provides timely, reliable and affordable access to necessary medicines for Australians. The PBS is part of the Australian Government’s broader National Medicines Policy.

The aim of the National Medicines Policy is to meet medication and related service needs, so that both optimal health outcomes and economic objectives are achieved.

Under the PBS, the government subsidises the cost of medicine for most medical conditions. Most of the listed medicines are dispensed by pharmacists, and used by patients at home.

Some medicines are dangerous to administer and need medical supervision (such as chemotherapy drugs) and are only accessible at specialised medical services, usually hospitals.

 

What is the PBS?

The PBS Schedule lists all of the medicines available to be dispensed to patients at a Government-subsidised price. The Schedule is part of the wider Pharmaceutical Benefits Scheme managed by the Department of Health and administered by Department of Human Services.

This schedule is now on-line and updated on a monthly basis. This on-line searchable version contains:

  • All of the drugs listed on the PBS
  • Information on the conditions of use for the prescribing of PBS medicines
  • Detailed consumer information for medicines that have been prescribed by your doctor or dentist;
  • What you can expect to pay for medicines.

The PBS has been in existence since 1948 and is governed by the National Health Act 1953 (Commonwealth).

Who is eligible for the PBS?

The Scheme is available to all Australian residents who hold a current Medicare card.

Overseas visitors from countries with which Australia has a Reciprocal Health Care Agreement  (RHCA) are also eligible to access the Scheme. Australia currently has RHCAs with the United Kingdom, Ireland, New Zealand, Malta, Italy, Sweden, the Netherlands, Finland, Norway, Belgium and Slovenia.

Residents of these countries must show their passports when lodging a prescription to prove their eligibility or they can contact Department of Human Services  (DHS) and get a Reciprocal Health Care Agreement Card to prove their eligibility. Some overseas visitors may not be eligible for this card.

Only those eligible for the PBS will receive subsidised medication and every time you present your script to the pharmacist, you will need to provide your Medicare card.

Eligible veterans may need to present their DVA card in addition to their Medicare card.

With your consent, the pharmacist may (at their discretion) keep a record of your Medicare number so that you do not have to show the actual card every time you lodge a script

What is the RPBS?

The Repatriation Pharmaceutical Benefits Scheme (RPBS) is subsidised by the Department of Veterans’ Affairs  (DVA), and can be used by veterans who have DVA White, Gold or Orange Card.

If you hold one of these cards then you are eligible for all PBS medicines, and other medicines listed on the RPBS, depending on your DVA entitlement. All medicines supplied under the RPBS are dispensed at the concessional rate (or free if the patient has reached their Safety Net threshold).

DVA white card entitles you to RPBS and PBS medicines at the concessional rate for a specific medical condition (which is at your doctor’s discretion). You can receive all other PBS medicines at the general rate.

DVA gold and orange cards entitle you to all RPBS and PBS medicines at the concessional rate.

What is the Dental Schedule?

Dentists are not able to prescribe general PBS items, but have a separate Dental Schedule  from which they can prescribe dental care medicines for their patients.

What is the Optometrical Schedule?

Optometrists are not able to prescribe general PBS items, but have a separate Optometrical Schedule  from which they can prescribe eye care medicines for their patients.

Who is eligible for a concession?

To be eligible for a concessional benefit, you will have one of the following concession cards:

  • Pensioner Concession Card;
  • Commonwealth Seniors Health Card;
  • Health Care Card; or
  • DVA White, Gold, or Orange Card.

Some State / Territory governments issue Seniors Cards. These are not considered concession cards for the purposes of the PBS.

Centrelink is responsible for the issue and administration of the Pensioner Concession Card, the Commonwealth Seniors Health Card and Health Care Cards.

The Department of Veterans’ Affairs  are responsible for White, Gold and Orange Cards.

There is also a DVA Pension Card which entitles holders to PBS medicines at the concessional rate (but not RPBS medicines).

General benefits apply if you do not have any of the above cards.

What are the current patient fees and charges?

Patient co-payments

The co-payment is the amount you pay towards the cost of your PBS medicine. Many PBS medicines cost a lot more than you actually pay as a co-payment.

From 1 January 2014, you pay up to $36.90 for most PBS medicines or $6.00 if you have a concession card. The Australian Government pays the remaining cost.

The amount of co-payment is adjusted on 1 January each year in line with the Consumer Price Index (CPI).

Safety Net

On 1 January 2014, the Safety Net thresholds changed from $354.00 to $360.00 (for concession card holders) and from $1,390.60 to $1,421.20 (for all other patients). These increases include the usual annual CPI indexation. A similar increase has occurred each year for four years (commencing in 2006).

The same general or concessional Safety Net threshold is applied to a family unit regardless of whether the unit consists of an individual, a couple or a family with dependent children. To be included in the same Safety Net family, the partners of a couple may be married or de facto, and of the same or opposite sex. A couple must be living together on a permanent basis, unless living separately due to illness.

After reaching the Safety Net threshold, general patients pay for further PBS prescriptions at the concessional co-payment rate and concession card holders are dispensed PBS prescriptions at no further charge for the remainder of that calendar year. In order to access the Safety Net arrangements, you need to maintain records of your PBS expenditure on a Prescription Record Form. These are available from all pharmacies.

A Safety Net Entitlement card or Safety Net Concession Card can be issued by the pharmacist once the threshold is reached.

For further information about drugs listed on the PBS and Safety Net arrangements, ask your pharmacist, contact the PBS Information Line on 1800 020 613 (free call) or collect a brochure at your nearest Medicare Service Centre.

Public Hospitals and the Safety Net

The Safety Net threshold may be reached using scripts filled at both community pharmacies and out-patient pharmacies at public hospitals – this is called the joint Safety Net. From 1 January 2014, the contribution rate for general patients as outpatients at public hospitals in most states and territories in Australia is $29.50. In hospitals in states participating in the pharmaceutical reforms, patients pay the Safety Net value of an item when it is listed in the Pharmaceutical Benefits Scheme, and a maximum of $36.90 for items not listed in the schedule.

In public hospitals from 1 January 2014, concessional patients pay a maximum of $6.00 – except in South Australia where Department of Veterans’ Affairs (DVA) card holders are treated as general patients, and in New South Wales, where DVA White Card holders are treated as general patients.

These amounts are adjusted on 1 January each year.

Items that are priced below the general patient co-payment

For general patients, an allowable additional patient charge can apply.  The allowable additional patient charge is a discretionary charge to general patients if a pharmaceutical item has a dispensed price for maximum quantity less than the general patient co-payment. The pharmacist may charge general patients the allowable additional fee but the fee cannot take the cost of the prescription above the general patient co-payment for the medicine.

The maximum fee is currently $4.19 and is adjusted on 1 January each year. This fee does not count towards your Safety Net threshold.

Additional fee for ready prepared items

In addition, if a medicine has a ‘dispensed price for maximum quantity’ less than the general co-payment a safety net recording fee may be charged by your pharmacist. This fee may not take the cost of your script above the co-payment.

Concessional patients do not pay this fee.

This fee is currently $1.13 and is adjusted on 1 August each year. The amount of this fee does count towards your Safety Net threshold.

What is a Price premium?

A price premium or brand premium , may apply to some medicines and is an additional payment that you pay to the supplier of the specified brand of a PBS medicine. The additional charge does not mean there is any difference in quality between brands.

Importantly all brands have been evaluated by the Therapeutic Goods Administration (TGA) as equivalent.  In a very small number of cases a prescriber may direct you to a specific brand for reasons specific to you. Where there are two or more brands of the same drug on the Schedule, the Government subsidises each brand to the same amount - up to the cost of the lowest priced brand minus your co-payment. If you are taking a more expensive brand the price difference is paid by you at the request of the drug company and is paid to the supplier NOT to the Government. This cost is in addition to your co-payment.

At your request, the pharmacist may be able to substitute a less expensive brand where your prescriber has allowed this. If you have any concerns, you should talk to your prescriber or pharmacist. Pharmacists are legally required to charge brand premiums on behalf of the drug company concerned. The brand premium does not count towards your safety net threshold.

Where can I find more information?

Constraints on community pharmacies

Dispensing fees

A dispensing fee, that can form part of the total price you pay for a medication is set by the government and is adjusted on the first of July each year.

When the cost of a medicine is below the general patient co-payment the cost of your prescription may vary from one pharmacy to another as some pharmacists make additional charges above the PBS dispensing fee. However you cannot be charged more than the co-payment, except when a premium applies.

Constraints on prescribers

Treatment specification

The PBS limits the amounts of a PBS-listed medicine in a prescription and the number of repeat prescriptions before you must be re-examined by your doctor.

Restrictions on medicines

Many medications on the PBS are subsidised for a specific patient group or indication.

There are three restriction categories:

  • Unrestricted benefits: no restrictions apply to the therapeutic use;
  • Restricted benefits: can only be prescribed for specific therapeutic uses; and
  • Authority required benefits: to prescribe these, doctors need approval from Department of Human Services or the Department of Veterans’ Affairs. Your doctor must declare the specific conditions and circumstances that justify the use of these medicines. This is usually done by phone during the consultation or in the case of Streamlined Authority it is done electronically.

Independent Review (PBS)

Independent review is available where the Pharmaceutical Benefits Advisory Committee (PBAC) has declined to recommend the listing of a drug on the Pharmaceutical Benefits Scheme (PBS), or in certain circumstances where the PBAC has not recommended the extension of the listing of a PBS item for an additional indication.

Further information on the independent review is available at the Independent Review (PBS) website .

Managing the cost of the scheme

Over the 10 years to 2004–05, the cost of the PBS grew by nearly 13 per cent each year. The increased cost relates to several factors, including newly-developed expensive medicines, over prescribing, an ageing population and increased patient awareness and expectations.

Spending on the PBS may reduce the cost of the wider health system by helping to prevent serious conditions developing thereby reducing hospital stays and other demands on hospitals and other health services.

Listing every medicine on the PBS would quickly make the scheme unsustainable. For example, listing a very expensive new medicine which only provides a marginal benefit over existing alternatives may not be ‘cost effective’.

Although the Government manages the price of each medicine on the PBS, the total cost of the PBS remains uncapped and therefore the overall cost of the Scheme increases as new drugs are added and as need increases. A number of strategies help ensure that the PBS remains affordable for the community while providing access to affordable necessary medicines and helping maintain a viable pharmaceutical industry. These affect all the stakeholders in the system:

  • Consumers;
  • Prescribers;
  • Dispensers;
  • Wholesalers;
  • The Pharmaceutical Industry.

Further information:

Section 100 programs

Section 100 of the National Health Act provides for alternative ways of providing a medicine when the usual supply through community pharmacies is unsuitable.

The reasons are numerous and include the cost of storage, requirements for particular controls over dispensing, the need for medical supervision or administration during treatment or constraints on patient access to community pharmacies. However, these medications must still meet the criteria for listing such as clinical and cost effectiveness.

There are several programs funded under this provision including:

  • The Highly Specialised Drugs Program;
  • The Botulinum Toxin Program;
  • The Human Growth Hormone Program;
  • The IVF/GIFT program;
  • The Opiate Dependence Treatment Program; and
  • The Special Authority Program.

What you pay for PBS medicines

To help meet the cost of the scheme, you pay a proportion (a ‘co-payment’) for your PBS medicines and the Government pays the rest of the cost. Co-payment amounts are adjusted in line with indexation on 1 January each year.

The real cost of your medicine

The co-payment arrangements help ensure that medicines remain affordable. The full cost of medicines is shown on pbs.gov.au.  pbs.gov.au allows you to search  for your medicine.  The full cost is also shown on the dispensing label.

Brand Premiums

Sometimes people have to pay more than the co-payment for prescriptions. This happens if they choose to use a particular brand of medicine listed on the PBS which costs more than another brand of the same medicine.

Generally the price of a medicine produced by different manufacturers is set at the same price. However, at the request of a manufacturer, the Government may allow an additional charge known as a Brand Premium, which is paid by the consumer. Typically this happens when a medicine comes off patent and a competing brand is listed at a reduced price. There is always a brand available without the extra cost, so you do not need to pay the brand premium if you do not want to.

Therapeutic Group Premiums

Therapeutic Group Premiums can apply to groups of drugs which have similar safety and health outcomes. Within these groups the drugs can be used interchangeably. The government subsidises all drugs within a group up to the level of the lowest price drug. Any difference between the subsidised price and the price of the drug used by the patient is called a therapeutic group premium and is paid by the patient.

There is always at least one drug within each group without a therapeutic group premium.  If for a medical reason you are only able to take a drug with a premium, your doctor can request an exemption.

Special Patient Contributions Other Than Premiums

Special patient contributions can also apply because the Government and the supplier cannot agree on price. In these cases, the product is listed, but you pay more than your co-payment.

Some medicines in the same therapeutic groups may not be interchangeable because of adverse reactions, drug interactions, likely poor compliance with drug use or other reasons. When your doctor believes that there is no clinically proven alternative, the Government will pay the special patient contribution on your behalf.

Veterans and the Repatriation Pharmaceuticals Benefits Scheme

The Department of Veterans’ Affairs administers the Repatriation Pharmaceutical Benefits Scheme (RPBS) for eligible Australians.

What medicines does the government subsidise?

The Australian Government subsidises medicines that are necessary to maintain the health of the community in a way that is cost effective.

This is achieved by carefully assessing the therapeutic benefits and costs of medicines, including comparisons with other treatments where appropriate. If a medicine is found to be acceptably cost-effective, then government negotiates its price with the supplier.

A medicine is considered cost effective by the PBAC if, for significant medical conditions, the improvements in health outcomes justify the additional costs to the Scheme (and any harms) compared with its main alternate therapy.

A number of strategies help ensure that medicines listed on the PBS provide affordable medicines for patients and an affordable scheme for taxpayers including:

  • Thorough independent evaluation of evidence for clinical and cost effectiveness;
  • Specifying maximum quantities and number of repeat prescriptions;
  • Restricting medicines to specific therapeutic uses;
  • Regularly reviewing which medicines are listed on the PBS and their prices;
  • Negotiating pharmacists’ fees and allowances;
  • Monitoring medicine use; and
  • Educating prescribers and consumers.

An acceptably cost-effective medicine can be recommended for listing if:

  • It treats or prevents significant medical conditions that are not covered, or only partially covered, by currently listed drug(s);
  • It is more effective and/or less harmful than a currently listed drug; or
  • It is as effective and safe as an existing listed drug.

Community need and/or benefit are also considered.