What is the PBS and what drugs are covered? Changes to prescription medicines explained
Tayla Purves, who lives with CF, has welcomed the moves to make PBS-listed drugs cheaper. (Supplied: Tayla Purves)
You've probably heard a lot about something called the Pharmaceutical Benefits Scheme (PBS) this week.
It's been in the news because both sides of parliament announced they'll drop the cost of PBS medication to $25.
There have also been fears that the United States will impose tariffs on Australian pharmaceuticals because US pharmaceutical giants dislike that the PBS sometimes subsidises cheaper generic medicines, rather than more expensive brand-name ones.
The slashing of PBS-listed medicine costs is great news for people like Tayla Purves, who has cystic fibrosis (CF) and needs the groundbreaking drug Trikafta to function.
She estimates she spends over $240 a month on multiple prescription medicines for her CF and other associated conditions.
It was added to the PBS last year and will mean from next year she will only pay $25 a month for the wonder drug — something Ms Purves describes as a "welcome relief".
"It's so welcome, you only ever hear about costs rising. It's so refreshing to hear about the cost of something you need to function [dropping]," she said.
So what exactly is the PBS and how does it make medicines cheaper?
We've got the answers for you below.
Loading...What is the PBS?
The PBS is the Pharmaceutical Benefits Scheme.
It's a government subsidy program that means Australians get medicine at an affordable price.
It was introduced by Ben Chifley's Labor government in 1948, and today means Australians get a whole bunch of medicines cheaper than they otherwise might.
How does it work?
Under the scheme, the federal government, with the help of experts on the Pharmaceutical Benefits Advisory Committee (PBAC), negotiates set prices for particular prescription medicines with drug makers.
By effectively buying in bulk for the whole country, the government gets medicines cheaper and can deliver more medicines to everyone at an affordable cost.
For expensive medicines, it subsidises the cost by covering the majority of the price and only asking patients to pay a small co-payment.
The PBAC also decides if listing a medicine is value for money for taxpayers. For example, it might decide not to subsidise an expensive cancer drug that only has limited evidence about whether it helps treat the cancer, or if it decides the proven benefit to patients isn't enough to justify the cost to taxpayers.
How much do PBS medicines cost?
There are two main prices for PBS medicines.
There's a general rate for most people. That's currently $31.60.
If you're a concession-card holder the maximum you pay for a script is $7.70.
The medicines might cost much more than that — sometimes thousands of dollars — but the government picks up the rest of the tab, so you pay no more than the PBS rates.
Loading...But on Thursday Labor announced, if elected, it would cut the maximum co-payment to just $25 for a general patient. And the Coalition quickly said it will match that.
You might pay even less than that if the PBS was able to negotiate an even lower price, for example, an antibiotic that might sell for only $14.
And some pharma companies — if they have a medicine that's fundamentally cheap to produce — don't bother to get a PBS subsidy and so you may just pay full price for that but it's below the usual PBS price anyway.
Will all medicines become cheaper?
No.
The $25 maximum only applies to medicines listed on the PBS schedule.
There are more than 900 medicines on the PBS schedule and more than 5,000 different brands, which is many, but not all.
Other medicines — like Hormone Replacement Therapy (HRT) patches — not on the PBS are dispensed as what's known as a private script, and can vary wildly in price.
It also doesn't apply to things sold over-the-counter or off-the-shelf, like vitamins. There are some exceptions to that, including some contraceptive pills and antibiotics for urinary tract infections (UTIs), which are now available over-the-counter in most states.
How do I check if my medication is on the PBS?
There are a few ways to check. The PBS has a search function on its website that's pretty simple.
Your treating doctor and pharmacist will also know.
You can also look on the script itself and see if the PBS check-box is ticked.
But if you're paying more than $31.60 or $7.70 then it's not on the PBS.
Labor has promised to lower the price of PBS-listed medication if it returns to government. (Photo by Myriam Zilles on Unsplash)
Who is eligible for the PBS?
All Australians with a Medicare card can access the PBS.
Australia also has reciprocal agreements that allow overseas visitors to access the scheme, and we have those with the United Kingdom, Ireland, New Zealand, Malta, Italy, Sweden, the Netherlands, Finland, Norway, Belgium and Slovenia.
Will I save money with the new changes?
Yes, with the maximum script going down to $25 that's a huge savings for people who take lots of medicines.
Sometimes there's what's called a brand name premium, which will on average add a couple of dollars to certain medicines if a patient decides they want a particular brand name version of the drug and not a cheaper brand or generic competitor.
The change is a big drop from $42.50, which was the maximum price in 2023 before the current government brought it down to $30.
However, if you get private scripts, the price of those won't change.
And if you're a concession card holder, the price of your medicines won't change — but they're already only $7.70.
A re-elected Labor government says changes would come into effect from January next year. The government has also already frozen the $7.70 co-payments for five years to 2030 but the $25 co-payment will be indexed from 2027.
Loading...What would potential tariffs mean for my scripts?
The answer is, probably, not much. A tariff is a tax that the US would impose on Australian medicines exported into the US, so it won't affect medicines imported and sold here.
Most medicines are made in China and India and there's only a handful of factories in Australia.
It's also important to remember that while about 8.5 per cent of Australian exports to the US are pharmaceuticals, the large majority are globally in-demand blood products made by the company CSL that help people like burn victims. Tariffs on this would only hurt US patients.
But the pharma industry is a global one and tariffs can have flow-on impacts that are hard to predict. The industry here says it's watching closely.
Why are American pharma companies calling for tariffs?
Pundits believe the overall goal is to try to get the Australian government to change the way the PBS operates so its pharmaceutical companies can sell more brand name medicines here.
They don't like cheaper generics, which compete with their brand-named medicines, being subsidised under the PBS. However, the government has said it's not touching the PBS.