What is the PBS?

The Pharmaceutical Benefits Scheme (PBS) is the federal programme that subsidises prescription medicines for Australian residents. It works alongside Medicare to ensure that essential medicines are affordable, and it is one of the largest subsidised medicine programmes in the world. The PBS was established in 1948 under the National Health Act and now covers more than 5,000 individual medicines and combinations.

Under the PBS, a patient pays a co-payment for each prescription, with the federal government paying the rest of the negotiated price to the pharmacy. The general patient co-payment is 31.60 dollars per prescription as of 1 January 2024, after the Albanese government's 12.50 dollar reduction announced in 2022. Concession card holders (including pensioners, Department of Veterans' Affairs cardholders, Commonwealth Seniors Health cardholders, and Health Care cardholders) pay only 7.70 dollars per prescription.

A safety net protects patients with high medicine costs. Once general patients have spent 1,647.90 dollars on PBS medicines in a calendar year (2024 figure), they pay only the concession rate of 7.70 dollars per script for the rest of the year. Concession holders pay nothing once they reach 277.20 dollars in spending. From 1 September 2023, patients have also been able to obtain 60-day prescriptions for many stable chronic conditions, halving the number of pharmacy visits and co-payments for those medicines.

The Pharmaceutical Benefits Advisory Committee (PBAC), an independent expert committee, recommends which medicines should be added to the PBS based on clinical effectiveness, safety, and cost-effectiveness. The federal Minister for Health and Aged Care makes the final listing decision on the PBAC's advice. The PBS now covers about 230 million prescriptions a year and costs the federal government about 17 billion dollars annually. New citizens are eligible for PBS prescriptions from the date their Medicare card becomes active.