The Pharmaceutical Benefits Scheme (PBS) is the program run by the Australian Government to subsidise prescription medicines. It is a key of the component of Australia’s health care system and is designed to make required medicines more affordable. Pharmaceutical benefits under PBS can only be obtained for medicines that are supplied by pharmacists and practitioners approved under the National Health Act 1953 and National Health (Pharmaceutical Benefits) Regulations 1960. The PBS has been available since 1948. Podiatrists in Australia prescribing medicines that they are authorized to do so that are on the National Podiatry Scheduled Medicines List do not receive the PBS subsidy, despite the medicine being the same as those prescribed by the authorised medical practitioners, dental practitioners, optometrist practitioners, midwifes and nurse practitioners.
The Department of Health and Aged Care administers applications to list a drug on the Pharmaceutical Benefits Schedule and the benefits under the PBS are administered by Services Australia under the provisions of the Health Insurance Act 1973. The Department will list a drug on the PBS based on a advice from the Pharmaceutical Benefits Advisory Committee (PBAC) and the process can be politicized with the involvement of public relations and marketing campaigns as well as lobbying.
When a pharmacist dispenses PBS medication, the patient will make a co-payment and Medicare Australia pays the remainder of cost of the medication to the pharmacist. There are concessions and safety nets which reduce what could be paid by the patient. The cost of a medicine is negotiated between the Department of Health and Aged Care and the supplier of the drug. This agreed price becomes the basis of what is called the dispensed price of the medicine that is negotiated between the Department and the Pharmacy Guild of Australia under the current Community Pharmacy Agreement that is in place. The final dispensed price includes the suppliers markup, the pharmacist’s markup and a dispensing fee. The pharmacist will purchase the PBS listed medicine from the supplier and claim the difference between the price they dispense at and what the patient makes as the co-payment contribution from Services Australia.
There are safety net provisions in the PBS to reduce patient contributions when singles and families exceed in a calendar year the PBS safety net threshold. As at 1 July 2022, this Safety Net threshold is set at $244.80 for concession card holders and $1457.10 for all others.
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