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Pharmaceutical benefits scheme (PBS): Dr Joe Kosterich

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As a collective group pharmaceuticals are very expensive.

Hi I’m Doctor Joe.

Now a lot of you will be thinking, “Hang on, I go to the chemist, I don’t actually pay that much for my tablets. How is that the case?”

Different countries have different systems for their pharmaceuticals. In Australia the prices for most drugs to most people are kept relatively low because we have a scheme called the Pharmaceutical Benefits Scheme. This has its origins back in the 1940s and 50s and at its core it was about the government becoming a single purchaser for medications that were deemed to be essential or for life threatening conditions.

Now not all medications on the PBS are for life threatening conditions but there is a panel which meets and it is an independent panel and it makes recommendations to the health department as to which tablets or medications should be on the pharmaceutical benefits scheme.

The fact that something is new doesn’t mean it has to be listed. In simplest terms the medication has to offer some benefit and it needs to be cost effective. Now a good recent example over the last few years is some new contraceptive pills have come onto the market. A lot of the newer ones are not listed on the PBS, even though the older ones are. The reason for that is that the committees felt form to the view that the newer ones didn’t do anything different or better than the older ones, so hence, people who want to can obviously buy those newer ones but they’re not on the pharmaceutical benefits scheme.

Antihistamines which are used say for hayfever are generally not on the PBS scheme because it is felt that hayfever is not something that people are going to tend to die of. So therefore it’s felt that if you want to treat the symptoms then, you know, you can pay for those yourself rather than it being funded.

The sorts of medications that are funded are obviously those for cancers, for heart disease, for asthma, antibiotics, the list is necessarily a fairly long one. The government negotiates a price with the pharmaceutical manufacturers and to that extent there is a maximum price that an individual can pay for PBS items. That amount changes every year, at the moment it’s around the $36-37 mark for people who don’t have a concession card, so this is people who don’t have a health care card or pension card. For people who do the price is capped at a bit over $6. Now again, this changes each year.

For some medications, if the price is less than the PBS maximum then you will pay the lesser of that. So often times with say older antibiotics or older medications people even if they’re not on a concession card may find that they’re paying less than the $36-$37 maximum.

Alright, so to simplify things, most medications that are deemed to be important for serious conditions or they’re going to better for the health of people, will be listed on the PBS. Not every drug and not every time and again there is an independent panel that makes these determinations.

Drugs that aren’t listed on the PBS are still available and you can get those on a private script if they are licensed for use in this country which again is one important point, but the fact that it’s licensed or approved for use doesn’t necessarily mean it’s approved for PBS. Again, as we’ve said before, there are a number of factors involved with that.

Alright, so for most people, most of the time medications that are prescribed by your doctor will be on the PBS and there will be a maximum amount that you need to pay per prescription and then of course a maximum amount per year before you reach the safety net. For other medications that aren’t on the PBS then again prices may vary and in that situation it can be useful to shop around for different chemists because prices may vary, so again these ones are accessible but they may not be quite as cheap, although in some instances, depending on the drug they are not necessarily that much more expensive either.

More information

For more information on medications, types and uses, see Drugs: An Overview.

 

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Dates

Posted On: 4 November, 2014
Modified On: 21 November, 2018

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