Requesting a change to an existing price
Page last updated: 31 August 2020
Price increase requests
Responsible persons may seek a price increase for a particular product listed in the Schedule of Pharmaceutical Benefits once per year. The dates for price increases to take effect are 1 April and 1 October. Application deadlines are approximately 7 months prior to the date of effect (for specific dates, please see deadlines for other industry applications and final listing documentation (PDF 118KB).
Where there are exceptional circumstances, responsible persons may request a price increase outside the normal timeframes. Responsible persons are encouraged to contact the Pricing Section to discuss the circumstances if they wish to make such an application.
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.
Matters that are relevant to a decision to agree an increased approved ex-manufacturer price
A price increase may be agreed only where it is necessary for continued supply of a clinically important medicine and not contrary to previous PBAC advice or recommendation on the effectiveness and cost of the medicine compared with existing therapies. A broad range of information may be considered when determining whether this requirement is met. This includes but is not limited to:
- commercial viability including economies of scale and gross margins provided by the responsible person;
- cost of goods information outlining changes from previous submissions provided by the responsible person;
- reasons for additional or increased cost of goods such as special storage requirements and product stability provided by the responsible person;
- rationale for price increase provided by the responsible person;
- the responsible person’s plans for the listing should a price increase not be agreed;
- prescription volumes;
- pricing history;
- market behaviour (for example discounting behaviour);
- availability and prices of alternative brands, products and treatments;
- available information on shortages or discontinuations of the pharmaceutical item;
- prices of items when supplied privately in Australia and in comparable overseas markets;
- fiscal impact in relevant and future financial years;
- PBAC advice;
- clinical need; and
- reliability of information provided by responsible persons and authorised representatives including certification by independent third party.
Submitting an application
Applications for a price increase should address the matters above and include:
- completed Cost Recovery form (Word 85KB);
- completed PB11a form (request for approved ex-manufacturer price) (RTF 194kb);
- a PB11b form (cost information) (Word 335KB); and
- for ad hoc reviews, justification for consideration outside of scheduled reviews.
Submissions for price increases should be sent to the PBS Price Increases inbox.
From 1 July 2019 price increase requests are cost recovered under the National Health (Pharmaceuticals and Vaccines—Cost Recovery) Regulations 2009. Current cost recovery fees can be found on the Cost Recovery Fees page.
Notifications of outcomes
Once a price increase request has been considered, the responsible person will be notified of the outcome by email. Responsible persons may be requested to submit a PB11a form depending on the outcome. Responsible persons may be notified that further advice will be sought from the PBAC in relation to the price increase request.
Once the Minister (or delegate) has formally agreed to the increased price, the responsible person will be notified by email that a new price has been agreed under section 85AD of the National Health Act 1953.
Please note, that any decision to increase the price of a medicine is a decision taken by the Minister or their delegate following consultation with the Australian Government. Until such a decision is made, no statements from the Department can be taken as guarantee that a price increase request will be agreed to.
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’).
Special Patient Contributions
A responsible person can request a Special Patient Contributions, when the responsible person and the Commonwealth Government do not agree on a price for subsidy purposes. In such circumstances, should the Minister for Health (or the Minister’s delegate) 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. Brand price premiums and therapeutic group premiums are types of special patient contributions.
For a brand price premium, at least one brand must be available to consumers in sufficient quantities 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 in sufficient quantities at the benchmark price. Responsible persons for alternative drugs in the group may charge a therapeutic group premium.
Adding or requesting a change to Special Patient Contributions
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. Requests to add or change a Special Patient Contribution should be made to the Pricing Section via email using the List Management Application Form (Word 87KB) and include a PB11a form specifying the claimed price requested. The deadlines for submission of premium change requests are included in the deadlines for other industry applications and final listing documents (PDF 118KB).
From 1 July 2019, requests for new Special Patient Contributions or changes to existing Special Patient Contributions will be cost recovered under the National Health (Pharmaceuticals and Vaccines—Cost Recovery) Regulations 2009. Current cost recovery fees can be found on the Cost Recovery Fees page. Any decision to agree to a Special Patient Contribution is at the discretion of the Minister for Health (or the Minister’s delegate).
Special Patient Contributions and Statutory Price Reductions
A premium will not ordinarily be agreed to for at least 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. This is to ensure that sufficient stock of the alternative benchmark brand(s) is available for supply.
Any brand with a Special Patient Contribution that is subject to a price disclosure reduction requires a reduction to the Claimed Price for the pack quantity of the brand of pharmaceutical item. The method for calculating the new reduced premium is described in the Price Disclosure Arrangements Procedural and Operational Guidelines (PDF 187KB). The Department also endeavours to provide as much notice as possible of the potential new premiums as a result of a price disclosure reduction by publishing on the Price Disclosure web page:
- Indicative prices for direct price disclosure reductions about two to two and a half months before reduction day; and
- Confirmation of reduced prices about three to four weeks before reduction day.
Removing a Special Patient Contribution
Responsible Persons may request the removal of an existing Special Patient Contribution at any time by emailing PBS Pricing. The removal request will be considered as per the deadlines for other industry applications and final listing documents.
The Commonwealth may at any time request that an existing brand price premium or therapeutic group premium cease, if the benchmark brand(s) become unavailable through supply shortages or delisting(s). The following may constitute a trigger for the cessation of an existing brand price premium or therapeutic group premium:
- The Department has received notification that the last listed benchmark brand will delist; or
- The Department has received notification of a supply shortage that impacts on the availability of the benchmark brand(s); and
- The Minister (or Minister’s delegate) has established to their satisfaction that the shortage is already or will impact patient access to alternative benchmark brand(s).
Before ceasing the existing premium, the Department will endeavour to notify the Responsible Person and advise the reason for the cessation.