Requesting a change to an existing price
Page last updated: 20 March 2018
Price increase requests
Responsible persons have an opportunity to seek a price increase for a particular product listed in the Schedule of Pharmaceutical Benefits once per year. The effective dates for annual reviews are 1 April and 1 October. Price increase reviews are no longer limited by Anatomical Therapeutic Chemical (ATC) group.
Where there are exceptional circumstances, responsible persons may request an ad hoc price review of a product outside the scheduled reviews. Where advice is required from the Pharmaceutical Benefits Advisory Committee (PBAC) the effective date may be dependent on the timing of that advice. Responsible persons are encouraged to contact the Pricing Section to discuss the circumstances in which an ad hoc review is being sought, prior to making a submission.
Note: A responsible person can request only one price increase for a particular product in a twelve month period. Additional requests made by the same responsible person for the same product in a twelve month period may not be considered.
In considering a submission for a price increase, the Pricing Section takes into account a range of factors, including:
- availability and prices of alternative brands;
- cost information provided by the responsible person;
- gross margins being in an acceptable range;
- prescription volumes, economies of scale, special storage requirements, product stability, special arrangements;
- market behaviour identified in price disclosure data;
- prices of items containing the drug in reasonably comparable overseas countries;
- any PBAC advice, including in relation to clinical and cost-effectiveness;
- other factors the applicant may wish the Pricing Section to consider; and/or
- any directions of the Minister.
Applications for a price increase should address the matters above and include:
- proposed effective date;
- a PB11b form (cost information) (Word 335KB); and
- for ad hoc reviews, justification for consideration outside of scheduled annual review.
Once the Pricing Section has considered a price increase request, it will notify the responsible person of the recommendation it will make to the Minister. Where the recommendation is positive (i.e. Pricing Section recommends that a price increase be granted), the responsible person is asked to submit a PB11a form and is then notified by email when the Minister (or delegate) has formally agreed to the increased price.
If no agreement can be reached, or if the responsible person wishes to appeal a negative recommendation, the responsible person may make a further submission, with additional information, to the PBAC for clinical advice, or back to the Pricing Section for further consideration.
Submissions for price increases should be sent to the PBS Price Increases inbox. The deadlines for submission of price increase requests and final PB11a forms are outlined in the deadlines for other industry applications and final listing documentation page.
Lower price offers
Responsible persons wishing to offer a lower price for a brand(s) of pharmaceutical item listed on the PBS should make this offer through a submission to the Pricing Section via email, accompanied by a completed PB11a form.
The date on which a lower price can be given effect will depend upon the date on which the offer is received by the Department, in accordance with the published deadlines for PBS submissions for the six available price change points. The PBS Calendar is available on the PBS website under 'useful resources'.
Where the pharmaceutical item for which a lower price is offered is available in more than one brand from more than one responsible person, the other responsible persons will be advised of the lower price offer and given the opportunity to consider the available options (which may include adding a brand price premium, reducing their price to match that of the lower price offer, or delisting their brand(s)).
Where the brand(s) of pharmaceutical item for which the lower price is offered is in the F1 formulary, combination drugs list, or a therapeutic group, then the lower price offer may trigger the reference pricing policy (see ‘Fact Sheet - Setting an approved ex-manufacturer price for new or extended listings’).
Adding, changing or removing a premium
Special patient contributions may apply to some drugs when the responsible person and the Commonwealth Government do not agree on a price for subsidy purposes. Should the Minister determine that the drug should continue to be listed and subsidised on the PBS, the patient must pay an additional amount on top of the normal patient co-payment.
For a brand price premium, at least one brand must be available to consumers at the benchmark price. Responsible persons for alternative brands may charge a brand premium provided their brand is marked as substitutable with the benchmark brand(s).
For a therapeutic group premium, at least one drug in a therapeutic group must be available to consumers at the benchmark price. Responsible persons for alternative drugs in the group may charge a therapeutic group premium.
Other special patient contribution arrangements may also apply where brand or therapeutic group premiums are not applicable. Unlike products with brand or therapeutic group premiums, patients may not be able to avoid paying this extra cost through the use of another brand or drug. The Government's policy is that a special patient contribution will ordinarily only be agreed where there is a premium free alternative for patients.
The responsible persons for items that are subject to the brand premium or therapeutic group premium arrangements have the opportunity to make price changes six times a year on 1 February, 1 April, 1 June, 1 August, 1 October and 1 December. Submissions for price changes should be made to the Pricing Section via email. The deadlines for submission of premium change requests are included in the deadlines for other industry applications and final listing documents (PDF 193KB).
For any benchmark price decreases, the responsible persons for the alternative brands will be notified of the new benchmark price and given the opportunity to review the prices/premiums for their brands.
Note: A premium will not ordinarily be agreed for four months following the listing of the first new brand of a product that either triggers a statutory price reduction or offers an administrative price reduction.