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Heard about the Pharmaceutical Benefits Scheme (PBS) but not sure how it relates to you or our healthcare system? In short: it gives people access to affordable prescription medications.
Longer version: established in 1948, the PBS makes sure all Aussies, regardless of their income, can pay for essential medications. The scheme subsidises a huge range of prescription medicines, making them available at a lower cost to the public. Here’s what you should know about it.
The Pharmaceutical Benefits Scheme is an Australian government program that subsidises prescription medications to Australian residents. But there’s actually a lot more to it. Managed by the Department of Health, the PBS makes essential medications more affordable for those who would otherwise struggle to pay for treatment.
Here’s how it works. Under the PBS, the government takes care of a big chunk of the cost of your prescription medications. This means that you only have to pay a fraction of the full price when buying medicines that are listed on the PBS. The good news is that things covered under the scheme include treatments for chronic illnesses like diabetes, asthma, acute infections, mental health disorders and more.
To be fair, the PBS list is extensive – over 5,000 different brands of nearly 1,000 medications in total, which are regularly reviewed and updated. Residents can trust they will always have access to the latest and most effective treatments under the PBS list, as they are picked based on their effectiveness and safety.
To take advantage of the PBS, you’ll first need to be eligible for Medicare – it doesn’t matter whether or not you have private health insurance. For concession cardholders, the cost of PBS medications might be even cheaper. Bottom line? The PBS is what keeps healthcare costs manageable for many Australians and helps them get access to the medicines they need.
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For new medications to become part of the PBS, they have to be chosen by the Pharmaceutical Benefits Advisory Committee (PBAC), which is an independent expert body that advises the Australian government on which drugs should be subsidised. The PBAC is made up of medical professionals, pharmacists, health economists and consumer representatives to make sure there’s always a balanced perspective on decisions.
When a pharmaceutical company wants one of their medications to be included in the PBS, it needs to first submit an application to the PBAC. It’ll include things like clinical data and analysis about its cost-effectiveness, as well as comparisons with other treatments. The PBAC reviews everything to see whether the medication will actually provide a health benefit and if it has good value for money.
While we can’t exactly sit in on these PBAC evaluations, it’s safe to say they are looking at things like:
If the PBAC recommends that a medication should be included on the schedule, then this recommendation is forwarded on to the Minister for Health, who makes the final decision on whether it will be listed on the PBS.
Essentially, this is a protective measure meant to help those who need to buy a number of PBS medications within a calendar year. The ‘Safety Net’ makes sure both individuals and families who require a large amount of medications won’t face an overwhelming financial burden.
Under the PBS Safety Net, once a patient or family reaches a threshold of out-of-pocket costs for PBS medicines, they become eligible for additional subsidies. This threshold is recalculated annually and is different for general patients and those holding concession cards. Here’s what it looks like as of August 2024:
On 1 January 2024, the PBS Safety Net thresholds were updated to:
Before you meet the threshold, each medicine will cost up to:
Once you reach the threshold, you’ll need to apply for a PBS Safety Net card to get cheaper medicines.
Your medicine will then either:
When there are 2 or more brands of the same medicine, they may have different prices. If you choose a more expensive brand it may cost you more.
To benefit from the PBS Safety Net, you’ll need to keep track of your PBS medication purchases. Pharmacies can be helpful by recording your purchases on a PBS Safety Net Card, which is available to all patients.
The easiest way to track your progress towards the Safety Net threshold is by keeping receipts for all your PBS medications. Pharmacies also let you conveniently track your purchases with the PBS Safety Net Card.
Want to know your current Safety Net balance? Simply present your PBS Safety Net Card whenever you buy another PBS medication. Your pharmacist will record the amount you've spent on PBS medicines, and you can request a printout of your current total at any time. Once you reach the Safety Net threshold, your pharmacist can help you apply for a PBS Safety Net concession card or entitlement card, if you’re eligible.
Non-PBS medicines are basically everything not listed on the Pharmaceutical Benefits Scheme, which means they don’t get a government subsidy. As a result, the cost of non-PBS medications tends to be higher than PBS-listed medicines, as you’ll have to pay the full price out-of-pocket.
There’s no ‘one price’ for these medications. On the contrary, the price you pay for non-PBS medicines can – and will – vary hugely depending on the type of medicine, the brand (i.e. maker brand or generic) and where you buy it. Some non-PBS medicines, especially those that are newer or used to treat rare conditions, are very expensive. In some cases, private health insurance might cover a portion of the cost of your non-PBS medicines, but this will depend on your specific policy.
If a non-PBS medication is recommended, your doctor might be able to suggest a cheaper alternative that’s covered under the PBS. Some pharmaceutical companies also have patient-assistance programs that can lower the cost of non-PBS medications if you’re deemed eligible.
It’s true: the Pharmaceutical Benefits Scheme plays quite a big role in helping us get affordable prescription medications. It’s another cog in our great public healthcare system, and you can take advantage of all its benefits right now. If you want to get some extra financial support – including cheaper prescription medicines – then it’s a good idea to look into private health insurance as well.
