Pricing of PBS Medicine

Average rates payable for extemporaneous items

The table below lists the average 10 g/ml rates payable for extemporaneous items supplied during June 2013 in all states.

These rates apply to extemporaneously-prepared benefits not included in the Standard Formulae List, where the approved supplier has not made an election to price such prescriptions.

The current prices shown in these rates include a dispensing fee of $8.56, the additional fee for agreed price items of $1.45 and the container rates as shown in the online Schedule of Pharmaceutical Benefits, available at www.pbs.gov.au

PB code	Preparation name	Average 10 g/ml rate (in cents)	Price payable for maximum quantity ($)	Maximum price to patients ($)
13Q	Creams	23.16	11.92	13.37
48M	Dusting powders	130.29	22.48	23.93
15T	Ear drops	29.74	9.85	11.30
19B	Eye drops with cocaine hydrochloride	0.00	0.00	0.00
22E	Eye drops, other	0.00	0.00	0.00
23F	Eye lotions	0.00	0.00	0.00
29M	Inhalations	83.49	13.47	14.92
64J	Linctuses containing codeine phosphate	50.84	14.39	15.84
34T	Linctuses, other	0.00	0.00	0.00
39C	Lotions	11.33	11.97	13.42
65K	Mixtures containing codeine phosphate	0.00	0.00	0.00
40D	Mixtures, other	62.51	22.04	23.49
66L	Mixtures, children with codeine phosphate	0.00	0.00	0.00
41E	Mixtures for children, other	0.00	0.00	0.00
30N	Mouth washes	75.98	24.90	26.35
42F	Nasal instillations	0.00	0.00	0.00
43G	Ointments, waxes	77.70	17.37	18.82
44H	Paints	1266.56	40.88	36.10
63H	Pastes containing cocaine hydrochloride	0.00	0.00	0.00
45J	Pastes, other	167.80	26.38	27.83
49N	Powders for internal use	214.10	30.86	32.31
52R	Solutions	0.00	0.00	0.00

An asterisk (*) indicates that no prescriptions were submitted for this preparation type and the average rate has been calculated by averaging the available standard formulae maximum quantity prices.

A zero price denotes where an extemporaneous preparation type does not have any related standard formulae to calculate an average price. Prescriptions submitted for payment for these average rate codes must include a price.

Explanation of PBS pricing

The Department of Human Services acknowledges the Pharmaceutical Society of Australia, Queensland Branch, in particular Mr Peter Mayne, for their work in developing the original training manual, which this information is based on.

The Pharmaceutical Benefits Scheme

The Australian Government’s Pharmaceutical Benefits Scheme (PBS) and Repatriation Pharmaceutical Benefits Scheme (RPBS) make a large range of prescription medicine more affordable for Australians and eligible overseas visitors.

The PBS is established under the National Health Act 1953 (the Act) and the National Health (Pharmaceutical Benefits) Regulations 1960. Pricing and reimbursement calculations come from Part VII of the Act.

The Department of Human Services (Human Services) administers the PBS on behalf of the Australian Government. It processes pharmacists’ claims and reimburses them for the medicines they supply. Human Services also protects the PBS by preventing and detecting incorrect and inappropriate use of the program.

PBS dispensed price

When a pharmacist supplies a medicine that attracts an Australian Government benefit, the pharmacist is paid the PBS dispensed price of the medicine, less any patient contribution.

The PBS dispensed price consists of:

• the cost to the pharmacist
• a mark-up by the pharmacist
• dispensing fees, and
• any other fees the pharmacist is entitled to.

The Pharmaceutical Benefits Remuneration Tribunal (the Tribunal) implements agreements between the Minister for Health and Ageing (the Minister) and the Pharmacy Guild of Australia, as to how the PBS dispensed price is to be established (Section 98BAA of the Act).

The Tribunal’s method of calculating the PBS dispensed price only applies to PBS medicines supplied by pharmacists to patients.

The method for calculating the dispensed price for medicines supplied by approved medical practitioners, approved hospital authorities and for emergency drug (doctor’s bag) items is determined by the Minister (s98C(1)(a) and 99(4) of the Act and Regulation 18 of the National Health (Pharmaceutical Benefits) Regulations 1960,  respectively). These are usually in line with pharmacists’ pricing.

Pricing of RPBS benefits is governed by an instrument made by the Repatriation Commission (s91 of the Veterans’ Entitlements Act 1986).  These are usually priced in line with PBS pricing.

The PBS pricing structure doesn’t apply to medicine prices that are less than the patient contribution ($36.10). There are pricing rules for these medicines so they can be counted towards a patient’s PBS Safety Net (section 99(2A) of the Act).

Highly Specialised Drugs

The Australian Government provides funding for certain specialised medicines under the Highly Specialised Drugs (HSD) program. These medicines are listed in Section 2 of the Schedule of Pharmaceutical Benefits (the Schedule)—Section 100 items. HSD are subject to different mark-ups than other medicines.

Efficient Funding of Chemotherapy Drugs

The revised arrangements for the Efficient Funding of Chemotherapy Drugs were implemented on 1 December 2011 under Section 100 of the Act. 

All relevant forms and strengths of infusible/injectable chemotherapy medicines are part of the Efficient Funding of Chemotherapy Drugs, including medicines previously supplied through:

• Section 85 (general part) of the Schedule
• Section 100—Chemotherapy Pharmaceutical Access Program special arrangements, and
• Section 100—Special Authority Program for Trastuzumab for early breast cancer.

These medicines are listed in the Efficient Funding of Chemotherapy—Section 100 Arrangements Supplement. They include new dispensing fees per injection/infusion to recognise the specialist nature of preparing chemotherapy medicines.

Public hospitals participating in pharmaceutical reforms

The public hospital pharmaceutical reforms let participating public hospitals prescribe and supply PBS medicines to out-patients and patients on discharge. Participating public hospital pharmacies are reimbursed differently to approved community pharmacies for the supply of PBS medicines.

Section 94 private hospitals

Private hospitals are approved under section 94 of the Act to supply PBS medicines to patients receiving treatment in or at the hospital. Private hospitals are reimbursed at a different rate to approved community pharmacies for the supply of PBS medicines.

Components of pricing

Cost to the pharmacist

The cost to the pharmacist is made up of the manufacturer’s price plus wholesale mark-up. For approved community pharmacies, one of two levels of wholesale mark-up applies.

Wholesale mark-up

Cost of medicine from manufacturer	Value
Up to and including $930.06	7.52% (Commonwealth price to pharmacists)
Over $930.06	$69.94

The level of wholesale mark-up is determined by the cost of the medicine from the manufacturer.

Wholesalers may charge a different amount to the cost to the pharmacist.

Section 94 private hospitals and public hospitals participating in pharmaceutical reforms will have a flat 11.1 per cent wholesale mark-up on medicines.

Pharmacy mark-up

The pharmacy mark-up covers the costs of storing and handling PBS medicines. It is included in the Australian Government payment to pharmacists. It is added to the cost to the pharmacist of the product from the wholesaler and is a compulsory charge to the patient.

For approved community pharmacies there are six levels of pharmacy mark-up.

Cost of medicine to pharmacist	Mark-up
Up to and including $30.00	15%
Between $30.01 and $45.00	$4.50
Between $45.01 and $180.00	10%
Between $180.01 and $450.00	$18.00
Between $450.01 and $1,750.00	4%
Over $1,750.00	$70.00

The level of pharmacy mark-up is determined by the cost of the medicine to the pharmacist for the listed maximum quantity. The level of mark-up remains the same, regardless of the quantity supplied.

For authority or Regulation 24 prescriptions, where increased quantities bring the cost price of the medicine to over its mark-up level (based on the listed maximum quantity), the mark-up will remain at the original level. For example, if a PBS medicine costs the pharmacist $20.00 for the maximum quantity, the mark-up will be 15 per cent ($3.00). If the quantity authorised for supply is three times the maximum quantity, the cost to the pharmacist will be $60.00 but the mark-up would remain at 15 per cent ($9.00).

Where the quantity supplied is less than the maximum, the mark-up will be reduced proportionately. For example, if a PBS medicine costs the pharmacist $1800.00 for a maximum quantity of two, then the mark-up applicable is $70.00. If half the listed maximum quantity (non-broken pack) is dispensed, the mark-up is proportional to the quantity supplied ($35.00).

The pharmacy mark-up does not apply for approved public hospitals participating in pharmaceutical reforms. Section 94 private hospitals will have a flat 1.4 per cent pharmacy mark-up on medicines.

Highly Specialised Drugs (HSD)

The dispensed price for HSD supplied in approved community pharmacies and section 94 private hospitals includes the normal PBS dispensing fee plus a pharmacy mark-up.

Cost of medicine	Mark-up
Up to and including $40.00	10%
Between $40.01 and $100.00	$4.00
Between $100.01 and $1000.00	4%
Over $1,000.01	$40.00

The dispensed price for HSD supplied in participating public hospitals excludes a pharmacy mark-up. The patient contribution, including premiums, is the same as other medicines.

Efficient Funding of Chemotherapy Drugs

The revised arrangements for the Efficient Funding of Chemotherapy Drugs aim to achieve greater efficiency in the cost of chemotherapy medicine used to treat cancer and administered by injection or infusion.

Reimbursement to pharmacies for the supply of an infusion is based on the cheapest combination of vials. An algorithm has been built into pharmacy dispensing software and the Human Services processing system to work out the cheapest combination.

Under the Efficient Funding of Chemotherapy Drugs, ‘pack’ size and price will be ‘vial’ size and price.

The algorithm calculates the price of each individual vial (base price + mark-up) so the prices can be used to determine the cheapest combination for the quantity/dose prescribed.

The pharmacy mark-up applied is the same as other PBS medicine:

• approved community pharmacies—six level mark-up
• public hospitals participating in pharmaceutical reforms —none
• private hospitals—1.4%
• PBS Trastuzumab—four level mark-up (similar to HSD)

The dispensed price of PBS medicines supplied under the Efficient Funding of Chemotherapy Drugs includes:

• the cost to the pharmacist
• applicable mark-up, and
• applicable fees.

Other applicable pharmacy applied fees include:

• PBS Safety Net recording fee, and
• allowable extra fee.

Wastage and dangerous drug and container fees are not applicable.

The standard PBS patient contributions apply including brand price premiums, therapeutic group premiums and special patient contributions.

For Department of Veterans’ Affairs (DVA) patients, brand price premiums and therapeutic group premiums are payable by the patient. Special patient contributions are not payable by the patient.

Patient contributions are only payable on original prescriptions and not on repeats. Brand price premiums, therapeutic group premiums and special patient contributions are payable on repeats.

Public hospitals participating in pharmaceutical reforms

The dispensed price for participating public hospitals includes:

• the cost to the pharmacist (the manufacturer’s price + 11.1 per cent mark-up), and
• extemporaneously prepared containers (if appropriate).

Other applicable pharmacy applied fees include:

• PBS Safety Net recording fee, and
• allowable extra fee.

Pharmacy mark-up and dispensing, dangerous drug, wastage and ready prepared container fees don’t apply.

The standard PBS patient contributions apply including brand price premiums, therapeutic group premiums and special patient contributions.

DVA patients are included in the pharmaceutical reforms and the same rules apply to RPBS benefits.

For more information see Section 1 of the Explanatory Notes at pbs.gov.au

Section 94 private hospitals

The dispensed price of PBS medicines supplied under section 85 of the Act by a section 94 private hospital (including PBS medicines supplied to DVA patients) includes:

• the cost to the pharmacist (manufacturer’s price + a flat wholesale 11.1 per cent mark-up)
• a flat 1.4 per cent pharmacy mark-up
• the relevant dispensing fee, and
• a dangerous drug fee, wastage and container fee (if appropriate).

Other applicable pharmacy applied fees include:

• PBS Safety Net recording fee, and
• allowable extra fee.

The standard PBS patient contributions apply including brand price premiums, therapeutic group premiums and special patient contributions.

For DVA patients, brand price premiums and therapeutic group premiums are payable by the patient. Special patient contributions are not payable by the patient.

Fees

Dispensing fees

The dispensing fees are determined by the Tribunal following an investigation of relevant information.

Ready prepared

The ready prepared fee is $6.52.

The ready prepared dispensing fee is for a PBS medicine that doesn’t need further preparation or compounding. This fee is a compulsory addition to the mark-up component, regardless of the cost of the medicine.

Only one fee is paid for each prescription, regardless of quantity. The ready prepared fee doesn’t change when multiple quantities are ordered (for example, Regulation 24, authority prescriptions for increased quantities) or when quantities less than the PBS maximum quantity are ordered.

For more information see Section 3 of the Explanatory Notes at pbs.gov.au

Extemporaneously prepared

The extemporaneously prepared fee is $8.56.

The extemporaneously prepared fee is paid for supplying the following PBS medicines:

• reconstituted items listed in Section 2 of the Schedule (for example, Amoxycillin syrup):
  • where reconstitution requires a solvent, the fee includes the price of 100mL purified water from the drug tariff, and
  • a fee is paid for each multiple quantity ordered (for example, Regulation 24 or authority prescriptions for increased quantities).
• extemporaneously prepared PBS medicine (for example, mixtures, creams and ointments):
  • only one fee is paid—the extemporaneously prepared fee does not change when quantities more or less than the PBS maximum quantities are ordered. An extemporaneously prepared medicine is only a PBS medicine if prepared from ingredients or formulae listed in Section 4 of the Schedule.

For more information see Section 4 of the Explanatory Notes at pbs.gov.au

Dangerous drug fee

The dangerous drug fee is $2.71.

The dangerous drug fee is paid for supplying a Schedule 8 medicine and is in addition to the mark-up and dispensing fee. This fee is designed to cover extra costs such as:

• handling fees charged by wholesalers for dangerous medicines, and
• supplying and recording duties associated with dangerous medicines.

Only one fee is paid each prescription, even for multiple quantities (for example, Regulation 24 or authority prescriptions). A dangerous drug fee is not payable for extemporaneous prescriptions with a dangerous ingredient as this has already been factored into the recovery price of the ingredients.

For more information see Section 3 of the Explanatory Notes at pbs.gov.au

Fees for the Efficient Funding of Chemotherapy Drugs

The Efficient Funding of Chemotherapy Drugs includes new dispensing fees to recognise the specialist nature of preparing chemotherapy medicines.

Applicable fees for all drugs except Trastuzumab

Fee	Section 90 community pharmacy (including section 92 approved practitioners)	Section 94 approved public hospital authority	Section 94 approved private hospital authority
Distribution fee ($24.38)	Yes	No	Yes
Diluent fee ($4.83)	Yes	No	Yes
Preparation fee ($40.64)	Yes	Yes	Yes
Ready prepared dispensing fee ($6.52)	Yes	No	Yes

Applicable fees for Trastuzumab where prescribed for HER2 positive early breast cancer

Fee	Section 90 community pharmacy (including section 92 approved practitioners)	All public hospitals	Section 94 approved private hospital authority
Distribution fee ($24.38)	Yes	No	No
Diluent fee ($4.83)	Yes	No	Yes
Preparation fee ($40.64)	Yes	Yes	Yes
Ready prepared dispensing fee ($6.52)	Yes	No	Yes

Trastuzumab used for late stage breast cancer and subsidised outside the PBS is not affected by the Efficient Funding of Chemotherapy Drugs.

Patient contributions

The patient contribution for general patients is a maximum of $36.10. For concession patients the patient contribution is $5.90. These amounts are indexed annually following the Consumer Price Index.

Patient contributions are only payable on original prescriptions for infusible chemotherapy medicines supplied under the revised arrangements for the Efficient Funding of Chemotherapy Drugs.

For more information see Section 1 of the Explanatory Notes at pbs.gov.au

PBS Safety Net

The PBS Safety Net helps individuals and families who need a lot of medicines in a calendar year.

Once a pensioner or concession family spends $354.00 (60 prescriptions x $5.90) on medicines in 2013, they are issued with a PBS Safety Net card that lets them receive their medicines free of charge for the rest of the year.

Once a general patient or family spends $1,390.60 on medicines in 2013, they are issued with a PBS Safety Net card that lets them pay $5.90 per prescription for the rest of the year.

The thresholds don’t include brand price premium, therapeutic group premium charges or special patient contributions and patients will still need to pay these costs once they have a PBS Safety Net card.

Patients need to keep a record of their PBS medicine costs on a Prescription Record Form (PRF). The patient’s Medicare card number must be recorded on their PRF before a PBS Safety Net card can be issued. The Centrelink and/or DVA number must also be recorded before a PBS Safety Net card can be given to a pensioner or concession family.

Prescriptions for some PBS medicines are not eligible for benefits if resupplied within 20 days of a previous supply of the medicine, for the same person under the PBS or RPBS. This is known as the Safety Net 20 day rule.

PBS Safety Net recording fee—additional fee for agreed price benefits

The ready prepared PBS Safety Net recording fee is up to $1.11. The extemporaneously prepared PBS Safety Net recording fee is up to $1.45.

The PBS Safety Net recording fee is paid for recording prescriptions below the maximum general patient contribution on the PRF.

Any medicine in the Schedule, with a dispensed price less than the general patient contribution, is regarded as a PBS medicine for the purpose of being recorded on the PRF for general patients only. In effect, the patient is paying the full cost of the medicine.

A pharmacist can charge a patient the PBS Safety Net recording fee but it is not compulsory. Any fee charged should be added (up to the maximum PBS Safety Net recordable value for each item, as listed in the Schedule) to the PBS dispensed price for the PRF.

The PBS Safety Net recording fee can be a part charge to take the cost up to $36.10, where the full fee would have taken the cost of the item over $36.10. Only one PBS Safety Net recording fee is paid for each prescription, even if there are multiple quantities (for example, Regulation 24 or authority prescriptions).

This fee does not apply to:

• concession cardholders
• DVA patients, and
• general patients where the dispensed price is more than $36.10.

For more information see Section 3 and Section 4 of the Explanatory Notes at pbs.gov.au

Allowable extra fee

The allowable extra fee is up to $4.11.

This fee applies where the dispensed price (including the PBS Safety Net recording fee if applicable) is below the general patient contribution. It is added to the dispensed price and is paid by the patient. The fee was agreed between the Pharmacy Guild of Australia and the Australian Government and introduced to make sure medicines priced below the patient contribution are still recorded on a PRF.

The allowable extra fee is optional. It can only be added to general patients’ prescriptions and can’t be entered on a PRF as part of the cost of the medicine.

The maximum amount that may be charged to a general patient is $36.10. The allowable extra fee can’t be charged if the total cost of the medicine (including the PBS Safety Net recording fee and the allowable extra fee) is over $36.10. This fee can be a part charge to take the cost up to $36.10.

If the cost of a medicine to a general patient is less than $36.10, the PBS Safety Net recording fee is added first to bring the charge up to $36.10. If the cost is still less than $36.10, the allowable extra fee is then added to bring the charge up to a maximum of $36.10.

Brand price premium

The brand price premium is a compulsory charge. Substitution of a less expensive brand for a brand name medicine may occur if:

• the less expensive brand is marked as bioequivalent in the Schedule, and
• the patient requests or agrees to the substitution and it has been allowed by the prescriber.

The price difference on a more expensive brand is payable by the patient.

If a prescription is written generically or for the lowest priced brand, and the lowest priced brand is supplied, the brand price premium should not be charged. If a higher priced brand is supplied, the applicable brand price premium must be charged.

The brand price premium doesn’t count towards the patient’s PBS Safety Net threshold and can’t be entered on the PRF.

If a prescription with a brand price premium has multiple quantities (for example, authority prescription or Regulation 24) the charge is multiplied by the number of maximum quantities supplied.

If a prescription is for a broken quantity, the wastage factor table is used to determine the relevant brand price premium. If the quantity is less than the PBS maximum quantity but isn’t a broken pack, the brand price premium is reduced by the multiple (for example, when half the PBS maximum quantity is prescribed the brand price premium is halved).

Brand price premiums are listed in Section 2 of the Schedule under the heading ‘Premium’ and are identified with a leading ‘B’. This charge doesn’t apply to:

• emergency drug supplies
• medicines listed only in the RPBS Schedule, and
• unlisted RPBS benefits (prior approval medicine not listed in either the PBS or RPBS Schedules).

For more information see Section 1 and Section 2 of the Explanatory Notes at pbs.gov.au

Therapeutic group premium

The therapeutic group premium is a compulsory charge.

The therapeutic grouping policy applies in defined therapeutic sub-groups where the identified medicine provides similar safety and health outcomes. The Australian Government pays up to the price of the lowest priced medicine in each sub-group, less any patient contribution.

Substitution of a medicine for a different, more expensive medicine in the same therapeutic group is not permitted. The price difference for more expensive therapeutic group medicine is payable by the patient. The therapeutic group premium amount doesn’t count towards the patient’s PBS Safety Net threshold and can’t be recorded on the PRF.

If a prescription with a therapeutic group premium has multiple quantities (for example, authority prescription or Regulation 24), the charge is multiplied by the number of PBS maximum quantities supplied.

If a prescription is for a broken quantity, the wastage factor table is used to determine the relevant therapeutic group premium. If the quantity is less than the PBS maximum quantity but isn’t a broken pack, the therapeutic group premium is reduced by the multiple (for example, when half the PBS maximum quantity is prescribed the therapeutic group premium is halved).

A medicine can attract a therapeutic group premium and a brand price premium.

Prescribers can apply for an authority prescription from Human Services to get exemption from the therapeutic group premium on clinical grounds. The phone approval number issued by Human Services starts with ‘TPX’ or a stamp with ‘TPX approved’ will be on the authority prescription.

Therapeutic group premiums are listed in Section 2 of the Schedule under the heading ‘Premium’ and are identified with a leading ‘T’. This charge does not apply to:

• emergency drug supplies, and
• unlisted RPBS benefits (prior approval medicine not listed in either the PBS or RPBS Schedules).

For more information see Section 1 and Section 2 of the Explanatory Notes at pbs.gov.au

Special patient contribution

The special patient contribution is a compulsory charge.

For some expensive medicines, the Australian Government and the manufacturer can’t agree on an acceptable price, so the Australian Government makes a part contribution to the manufacturer’s price. In these cases, the patient pays the normal contribution plus the difference between the contribution and the actual cost of the supplied medicine. This difference is the special patient contribution.

Prescribers can apply for an authority prescription from Human Services to get exemption from the special patient contribution on clinical grounds. The phone approval number issued by Human Services starts with ‘SPX’ or a stamp with ‘SPX approved’ will be on the authority prescription.

The special patient contribution amount doesn’t count towards the patient’s PBS Safety Net threshold and cannot be entered on the PRF.

Medicines that attract a special patient contribution and those granted exemption from the special patient contribution are priced the same way as therapeutic group premium medicines and exemptions.

The special patient contribution does not apply to RPBS prescriptions—patients only pay the normal contribution and DVA pays the rest.

For more information see Section 1 and Section 2 of the Explanatory Notes at pbs.gov.au

Authority prescriptions

All authority required medicines and requests for increases to the listed maximum quantity and/or maximum repeats for PBS medicines need prior approval. Authority required (STREAMLINED) medicines don’t need prior approval except if increases in the listed maximum quantity and/or maximum repeats are needed.

When the quantity of a medicine is more than the PBS maximum quantity, the relevant mark-up applies to the increased quantity. However, only one of each of the following fees may be applied if applicable:

• dispensing fee
• dangerous drug fee
• PBS Safety Net recording fee, and
• allowable extra fee.

Only one entry is made on the PBS Safety Net PRF. General patients pay a maximum of $36.10 and concession patients pay $5.90, plus brand price premium, therapeutic group premium and special patient contribution charges if applicable. Multiple quantities attract multiple brand price premium and therapeutic group premium charges.

For more information see Section 1 of the Explanatory Notes at pbs.gov.au

Regulation 24

Regulation 24 applies when a prescriber, under certain conditions, asks for all repeats to be supplied at the same time as the original prescription. Since the total prescription is supplied as a single medicine, only one of each of the following fees can be applied if applicable:

• dispensing fee
• dangerous drug fee
• PBS Safety Net recording fee, and
• allowable extra fee.

Although there is only one set of fees applicable, it isn’t much cheaper for the patient. They must pay multiple patient contributions—up to $36.10 or $5.90 for each supply. Multiple quantities attract multiple brand price premium, therapeutic group premium and special patient contribution charges. The amount recorded on the PBS Safety Net PRF should reflect the total quantity supplied, including the original and repeats.

Unlike ready prepared medicines, the extemporaneous plus water dispensing fee is applicable for each maximum quantity supplied.

PBS and RPBS differences

Differences between the PBS and RPBS include:

• the RPBS has extra medicines not listed on the PBS, and
• holders of the following cards don’t pay the special patient contribution:
  • Repatriation Pharmaceutical Benefits card (orange card)
  • Repatriation health card for all conditions (gold card), and
  • Repatriation health card for specific conditions with prescriptions marked as RPBS (white card).

RPBS prior approval arrangements can provide access to some medicine not listed in either the PBS or RPBS Schedules. The price of the medicine is the cost to the pharmacist plus the appropriate mark-up and the PBS dispensing fee. Where the price to pharmacist is greater than $100.00, a copy of the invoice must be submitted with the prescription for payment (including repeat prescriptions).

For more information see the RPBS Explanatory Notes at pbs.gov.au

Emergency drug supplies

The Australian Government contribution for emergency drug supplies is the same as ready prepared prescriptions.

Emergency drugs are supplied at no charge to the prescriber. Pharmacists are reimbursed the full PBS amount.

There is no charge if the prescriber requests a more expensive medicine or brand. Pharmacists are paid for the medicine or brand supplied. Dangerous drug fees are added if applicable.

In some states and territories a prescriber can’t write a dangerous drug on a prescription with any other medicine. This doesn’t apply to the Emergency Treatment Supplies Order Form.

For more information see Section 1 of the Explanatory Notes at pbs.gov.au

Extemporaneous pricing

Extemporaneously prepared formulae

An extemporaneously prepared formula is a PBS medicine compounded by a pharmacist from basic ingredients. All the allowable ingredient prices are listed in Section 4 of the Schedule—Drug tariff. If a formula has an ingredient not listed, that formula is not a PBS medicine. Some ingredients have specific uses or additional directions (for example, ‘use as additive only’). If these are not followed, the formula is not a PBS medicine.

Standard formulae

Section 4 of the Schedule lists common formulae, their codes, prices and their references. Container rates are included in these prices and are also listed in Section 4—Container prices. Container rates are the same for every state and territory.

Normally, if a standard formula is altered in any way, the code reverts to the three character code given in Section 4 of the Schedule—Table of Codes, Maximum Quantities and Number of Repeats for Extemporaneously Prepared Pharmaceutical Benefits. If a single ingredient is added, or one of the standard ingredients is increased, reverting to the three character code may reduce the recovery price. In this case, the code can be left as is and be paid the same as the standard formula.

Pricing extemporaneously prepared ingredients

All the allowable ingredient prices are listed in Section 4 of the Schedule—Drug tariff, with prices given for different quantities. The way to price exact quantities is explained in Section 1 of the Schedule—Explanatory notes.

Average pricing

Each type of preparation, such as a cream or mixture, has an average price. The price is programmed each month into all pharmacy computers and represented by a three character code. The maximum quantities and repeats available for each is listed in Section 4 of the Schedule—Table of Codes, Maximum Quantities, and Number of Repeats for Extemporaneously Prepared Pharmaceutical Benefits.

For example, in January 2013, the standard price for:

• 100g cream, 13Q, is $11.93, and
• 200mL mixture (other than a mixture containing codeine phosphate), 40D, is $21.99.

If these codes are used, every type of extemporaneous prescription (for example, creams and mixtures) supplied in a month will be the same price, regardless of the ingredients supplied.

Some preparations have a zero price which means the extemporaneous preparation type doesn’t have any related standard formulae to calculate an average price. Prescriptions submitted for payment for these average rate codes must include a price.

Self pricing

An approved pharmacy can choose to price their extemporaneous prescriptions differently than accepting the average price. If they do, they must let Human Services know and the prices must be applied for at least three months. Every type of extemporaneous prescription must be priced, not selected prescriptions. This doesn’t apply to standard formulae already priced in Section 4 of the Schedule.

The quantities and costs of all the ingredients, plus the relevant dispensing fee and container price must be listed on the back of the prescription or the repeat form for Human Services to check.

Exceptional extemporaneous prescriptions

If a pharmacy chooses to be paid the average price, there may be times where the total cost of ingredients is well above average. If the value of the ingredients is at least double the value of the average preparation, the pharmacist can be paid for the extra cost.

The prescription must be entered into the computer as a priced prescription showing the full cost so Human Services can pay the extra amount. The ingredients, costs and all fees must be written on the back of the prescription or repeat form for Human Services to check.

Individual extemporaneous preparation prices submitted to Human Services for claiming purposes must not include allowable extra fees.

Container prices for extemporaneously prepared prescriptions

If a prescriber asks for a particular quantity then the container of that size (or the next larger in the case of a non-standard size) is used.

If a quantity larger than the PBS maximum quantity is supplied (for example, Regulation 24 or authority prescriptions), payment is made for the minimum number of containers needed.

For example, 100g cream repeat 1 Regulation 24—only 1 x 200g screw cap jar (instead of 2 x 100g jars) would be reimbursed.

Dangerous drug fee

There is no dangerous drug fee for extemporaneous prescriptions because it has already been included in the recovery price of the ingredients.

Brand price premium, therapeutic group premium and special patient contribution charges

None of these charges apply to extemporaneous prescriptions. As manufacturers don’t supply this medicine in ready prepared form, the Australian Government doesn’t control the price paid by pharmacists for ingredients. It is the pharmacist’s responsibility to check the price they pay to the wholesaler for extemporaneous ingredients is close to Australian Government reimbursements.

PBS Safety Net recording fee

The additional PBS Safety Net recording fee is paid for the extra work involved in recording medicines on the PBS Safety Net PRF and can only be added to general patients’ prescriptions. It is not a compulsory charge.

This fee is paid by the patient and can’t be included as part of any extemporaneously prepared priced prescription claimed from Human Services.

Allowable extra fee

The allowable extra fee is optional and must not be more than $4.11. It can only be added to general patients’ prescriptions and can’t be entered on the PBS Safety Net PRF.

The fee is paid by the patient and can’t be included as a part of any extemporaneously prepared priced prescription claimed from Human Services.

More on pricing

PBS quantities—where a pack cannot be broken

Where a medicine’s maximum quantity has been specially determined to correspond to the manufacturer’s pack, the manufacturer’s standard pack should be prescribed and supplied, even if the prescriber asks for a lesser quantity. For example, a prescription for 50 Anginine Stabilised® tablets, where 100 tablets (one unopened bottle) should be supplied. This is identified under the heading ‘Name, manner of administration and form and strength’ (Section 2 of the Schedule).

The minimum quantity that can be supplied is one. Therefore, if a PBS medicine is listed under the column headed ‘Name, manner of administration and form and strength’ with a specific quantity (for example, 500mL), then the minimum quantity that can be dispensed is one pack (500mL is a quantity of one). If a prescriber asks for less than this (for example, 150mL), it is not a PBS medicine. For example, 150mL of Gastrogel® mixture is less than one quantity and there is no ‘supply standard pack’ information icon under the ‘Name, manner of administration and form and strength’ to bring the quantity up to 500mL.

Where the maximum quantity of a medicine doesn’t match the quantity contained in the manufacturer’s pack, an information icon stating this is displayed below ‘Manner of administration and form and strength’. There is also a corresponding entry in Section 3 of the Schedule that shows the marked-up price of the manufacturer’s pack.

Fractions are not allowed under the PBS. For example, a prescription for Gastrogel® suspension (750mL) would be a private prescription. This could be changed to a PBS prescription with approval from the prescriber and after endorsing the prescription with the PBS quantity (in this case either 500mL or 1000mL).

PBS quantities—where a pack can be broken

If a prescription is for a quantity less than the manufacturer’s pack, the wastage factor is worked out from the quantity in the manufacturer’s pack (not from the maximum quantity allowed on the PBS).

The quantity may consist of a full manufacturer’s pack plus a broken pack (for example, Rivotril® 500mcg x 150). In this example, 100 tablets are paid from the price in Section 3 of the Schedule and the wastage factor applies to the 50 tablets.

Container prices on ready prepared items

The container price only applies to quantities less than the manufacturer’s pack. For example, it applies to Serepax® 30 mg tablets x 10, but not to one month of Nordette 28®, (the price is listed in Section 3 of the Schedule). It isn’t payable on quantities over the manufacturer’s pack (for example, Rivotril® 500mcg x 150 tablets).

Injectable medicines with a required solvent

Where an injectable PBS medicine needs a solvent, both items should be treated as one medicine.

If the prescription is for an injectable item and solvent the price of each is added together (base price plus mark-up) but only one dispensing fee is payable.

If a solvent is prescribed as a part of a PBS medicine only one patient contribution is charged.

Codes for injectable items with allowable solvents

For an injectable medicine that needs a solvent, the Schedule lists the item code for the medicine when combined with the relevant solvent.

Wastage factor table

This table is used to calculate the price of a prescription when the quantity is less than the manufacturer’s pack. It compensates for the rest of the broken pack that isn’t used before expiry and wasted.

Example using wastage factor table

Prescription for 50 Teril® tablets 200mg.

This is 25 per cent of the manufacturer’s pack (200 tablets). Find 25 from Row A and look below to Row B. From Row B, you can see the price paid (the wastage factor) would be 38 per cent of the value of the manufacturer’s pack of 200.

Row A	5	10	15	20	25	30	35	40	45	50
Row B	10	18	26	32	38	44	50	54	58	62

Row A	55	60	65	70	75	80	85	90	95	100
Row B	66	70	74	78	82	86	90	94	98	100

Brand price premium, therapeutic group premium and special patient contribution—broken packs

The wastage factor table is applied to all of these charges (brand price premium, therapeutic group premium and special patient contribution) if a broken pack is involved. These charges form part of the overall cost of the medicine so pharmacists are paid according to the wastage factor table.

The brand price premium, therapeutic group premium and special patient contribution are all mandatory charges to the patient and failure to apply these charges is a breach of the Act.

For more information

• Call 132 290*
• Email pbs@humanservices.gov.au
• Explanation of PBS pricing [PDF, 791Kb]
• Explanation of PBS pricing [RTF, 1.1Mb]

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Last updated: 21 May, 2013

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