PBS Costs
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Download a PDF version of 'The PBS and You manual for medical practitioners' [PDF, 3.5Mb]
Learning objective
At the end of this activity, you will have an appreciation of the cost of the Pharmaceutical Benefits Scheme.
Context
The Pharmaceutical Benefits Advisory Committee (PBAC) is an independent expert body that plays a key role before a medicine can be listed on the PBS. PBAC membership includes medical practitioners, other health professionals and a consumer representative.
The PBAC assesses a medicine before recommending whether it should be listed on the PBS. It takes into account the medical conditions for which the medicine has been approved for use in Australia, its clinical effectiveness, safety and cost-effectiveness compared with other medicine listed on the PBS to treat the same condition. If the government agrees with the recommendation, it then subsidises the medicine to ensure it is affordable for all Australians.
A medicine may cost hundreds of dollars but patients prescribed the medicine under the PBS will pay much less.
In 2005-2006 more than $6 billion was spent on the PBS. In 2006-2007 this is expected to increase to around $6.5 billion. Since August 2006 new drugs worth more than $1 billion (over the next four years) have been listed on the PBS.
Each year, approximately 170 million prescriptions are subsidised through the PBS, around eight prescriptions every year for each Australian.
The effectiveness of the PBS as a fair and equitable scheme depends on prescribers, pharmacists and patients using it appropriately.
We realise that your patient’s health is your focus, rather than the cost of medicine. This information is provided only to raise your awareness around PBS costs.
What do your patients pay for their medicine?
If the generic form of a medicine has a full price (correct term ‘maximum dispensed price’ as listed in the Schedule) of $60.00, what does your patient and the government contribute?
In 2007, the maximum cost for a pharmaceutical benefit item at a pharmacy is $30.70 for general patients and $4.90 for concessional patients (except where a special patient contribution, a brand premium, or a therapeutic group premium applies). The contribution rates are usually adjusted 1 January each year in line with inflation.
In this example a general patient pays $30.70. The government contributes the difference in price up to the $60.00 (dispensed price), i.e. $29.30.
The concession patient in this example pays $4.90. The government contributes the difference in price up to the $60.00 (dispensed price), i.e. $55.10.
However, if the medicine is not listed on the PBS or the patient does not meet the criteria for a PBS prescription (to be expanded on later in the manual under "Non-PBS prescriptions"), then the PBS subsidy does not apply and the patient pays the full cost of the medicine.
Learning activities
Please answer the following multiple choice questions.
1. The cost of the PBS to the Australian Government each year is currently about?
2. The general patient contribution (co-payment) towards their PBS medicine for the year beginning 1 January 2007 is
3.The concession patient contribution (co-payment) towards their PBS medicine for the year beginning 1 January 2007 is
So far we have mentioned that the PBS lists medicine that is subsidised by the government.
How do we know which medicines are listed on the PBS?
How do we determine for which conditions a medicine can be written as a PBS prescription?
How do we determine what route of administration and form of the medicine are subsidised on the PBS?
These questions will be answered in the next unit.
- Further information on PBS statistics
- information on brand premium and therapeutic group premium and a listing of drugs which attract a special patient contribution
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Last updated: 9 February, 2012