The Pharmaceutical Benefits Scheme (PBS)

According to a recent report produced by the Government’s Australian Institute of Health and Welfare*, Australians are living longer—with more of those years lived in good health.

However, the report also noted that there are areas where improvement can be made. For example, it’s estimated that in 2017-18, almost half of us had one or more chronic conditions.

Some of the most common chronic conditions can include cancer, cardiovascular diseases, arthritis, asthma, diabetes, chronic kidney disease, and mental and behavioural conditions.

 

Many of these chronic conditions, as well as other medical conditions, can require us to take medicine on an ongoing basis—this medicine could be quite costly for us if there were no external assistance provided.

 

The Pharmaceutical Benefits Scheme (PBS)

Overview

The Government’s Pharmaceutical Benefits Scheme (PBS) subsidises the cost of medicine for most medical conditions—providing you with timely, reliable and affordable access to a wide range of necessary medicines.

As an example of the many benefits, and widespread scope, of the PBS, below is a summary of several key facts from the most recently available PBS Expenditure and Prescriptions Report^:

  1. As at 30 June 2019, there were 900 different medicines in 5,455 brands listed on the PBS.
  2. For the 2018-19 financial year, 205.1 million prescriptions were subsidised through the PBS.
  3. For the 2018-19 financial year, the total PBS Government expense for the supply of medicines under Section 85 (dispensed by community pharmacies) and Section 100 (supplied through special arrangements) was $11.8 billion (on an accrual accounting basis, excluding revenue).
  4. For the 2018-19 financial year, the top 10 drug groups by highest total prescription volume were: agents acting on the renin-angiotensin system, lipid-modifying agents, psychoanaleptics (e.g. antidepressants), antibacterials for systemic use, drugs for acid-related disorders, analgesics, drugs used in diabetes, drugs for obstructive airway diseases, antithrombotic agents, and psycholeptics (e.g. antipsychotics).

Availability

PBS medicines are available to all Australian residents who hold a current Medicare card. Also, overseas visitors may be eligible to access PSB medicines where there is a Reciprocal Health Care Agreement (RHCA) in place*.

*For example, Australia currently has RHCAs with Belgium, Finland, Italy, Malta, the Netherlands, New Zealand, Norway, the Republic of Ireland, Slovenia, Sweden, and the United Kingdom.

In addition, PBS medicines are available to veterans, war widows and widowers, and dependants who are eligible under the Repatriation Pharmaceutical Benefits Scheme (RPBS).

The PBS Schedule lists all of the medicines available at a Government-subsidised price.

PBS medicines, that don’t encompass over-the-counter medicines, can be collected from a community pharmacy, or an out-patient pharmacy at a public hospital pharmacy—your Medicare card, concession/health care card*, and PBS Safety Net Card (see below) need to be shown when filling a prescription.

*For example, Pensioner Concession Card, Commonwealth Seniors Health Card, Health Care Card, or Department of Veterans’ Affairs (DVA) Gold, Orange, or White Card.

Co-payment

When paying for PBS medicines, you pay a co-payment of up to $6.60 (concession/health care card holder) or up to $41.00 (general patient) towards the cost of the PBS medicine, and the Government pays any remaining cost—many PBS medicines cost significantly more than the co-payment amount.

For example, on 1 October 2019#, the medicines, Tecentriq® and Avastin®, were extended on the PBS Schedule to include first-line treatment of patients with stage IV metastatic non-squamous non-small cell lung cancer.

Importantly, without the PBS subsidy, these medicines would cost patients more than $11,400 per script; or a total of more than $189,100 per course of treatment (around 16 scripts per course of treatment).

Safety Net

If you (and your family) need a large number of PBS medicines in one year, the PBS Safety Net also serves to protect you from excessive out-of-pocket costs.

For example, if you spend an amount equal to your PBS Safety Net threshold amount on co-payments in a calendar year, and are issued with a PBS Safety Net Card, you can receive further prescriptions for that year:

  • for free (concession/health care card holder), or
  • for the concessional co-payment of up to $6.60 (general patient).

As at 1 January 2020, the PBS Safety Net threshold amount is:

  • $316.80 (concession/health care card holder), and
  • $1,486.80 (general patient).

 

The Pharmaceutical Allowance

Overview

In conjunction with the PBS, it’s important to note that the Government’s Pharmaceutical Allowance can provide further assistance with the cost of medicine to eligible Australians.

Eligibility

The Pharmaceutical Allowance is a regular extra payment paid on top of some income support payments, where certain conditions are met. These income support payments can include:

  • Parenting Payment (Single); automatically paid if under Age Pension age.
  • Disability Support Pension; automatically paid to those under 21 years of age without children.
  • Parenting Payment (Partnered) if under Age Pension age; must be 60 years or more of age and have been in receipt of income support continuously for nine months, or have a partial capacity to work or be unable to meet their mutual obligation requirements due to temporary incapacity.
  • JobSeeker Payment; must be temporarily incapacitated, or have a partial capacity to work, or be a single principal carer of a dependent child, or be 60 years or more of age and have been in receipt of income support continuously for at least nine months.

Payment rate

The Pharmaceutical Allowance payment rate is:

  • $6.20 per fortnight (eligible single person), and
  • $3.10 per fortnight (for each eligible member of a couple).

However, if you are a member of an illness-separated couple or a respite care couple or where a partner is in prison, the Pharmaceutical Allowance payment rate is $6.20 per fortnight.

Please note: For most age pensioners and other relevant income support recipients (e.g. Carer Payment), the value of the Pharmaceutical Allowance has been incorporated into the Pension Supplement—the maximum Pension Supplement is currently $69.60 a fortnight (singles) and $105 a fortnight (couples, combined).

If you have any questions regarding this article, please contact us.

*Australian Government, Australian Institute of Health and Welfare (2020). Australia’s health snapshots 2020.
^Australian Government, Department of Health. (2019). PBS Expenditure and Prescriptions Report 1 July 2018 to 30 June 2019.
#Australian Government, Minsters (Department of Health. (2019). Cheaper medicine for over 500,000 patients.