Pharmaceutical Benefits Scheme

Introduction
The Pharmaceutical Benefits Scheme (PBS) along with Medicare, is a key component of Australia's healthy system.

The PBS provides access to necessary and lifesaving medicines at an affordable price.

Increasingly the PBS has been the subject of greater scrutiny as the cost of providing subsidised medicines to all Australians has escalated.

Background
The PBS has been in operations for more than 50 years with some benefits first being made available in June 1948.

The PBS has evolved from supplying a limited number of 'life saving and disease preventing drugs' free of charge to the community, into a broader subsidise scheme which from 1 May 2002, provides subsidised access to over 590 generic drugs, available in more than 1460 forms, and marketed as over 2500 different drug brands.

What is the PBS
Many types of medicine cost much more than the price you pay - some coast hundred of dollar. The Government pays most of it for you. The government does this through the pharmaceutical benefits scheme.

How much does PBS contribute?
PBS contribution amounts as at 1 January 2007
General Patients $30.70
Concession card holders $4.90
DVA $4.90

If you have a DVA White Card for specific conditions accepted by DVA you will pay $4.90 otherwise you pay the general amount.

FYI
If you chose a more expensive brand of medicine, or if your doctor prescribes one, the extra amount you pay won't count towards your PBS safety net (see below for details on the PBS safety net)

Who is eligible for PBS?
All Australian residents

Eligible people from Italy, New Zealand, the Republic of Ireland, Finland, Norway, Malta, the Netherlands, Sweden and the United Kingdom

Current Payment Arrangements
The maximum cost for a pharmaceutical benefit item on the PBS is currently $23.10 for general patients and $3.70 for concessional patients (health care cardholders and pensioners)

Safety Net Arrangements
Individuals and families are protected from large overall expenses for PBS listed medicines by 'safety nets' whereby expenditure is subsidised or free once a certain threshold of expenditure is exceeded.
The general patient safety net threshold is currently $708.40. When patients and/or their families reach this amount in a calender year, they can apply for a Safety net concession card and pay only $3.70 per prescription for the rest of the calender year.

Pharmaceutical Allowance (PA)
All pensioners (including part pensioners, Veteran Affairs beneficiaries, sickness allowees and other older long term allowees, including parenting allowees over 60 and receiving income support for at least 9 months) receive a pharmaceutical allowance of $2.90 per week payable fortnightly or $150.80 a year.

The PA helps to defray their out-of-pocket pharmaceutical expenses.

How a Drug is Listed on the PBS
Prior to listing on PBS, a drug must first be assessed for its safety, quality and efficacy by the Australian Drug Evaluation Committee (ADEC) of the Therapeutics Goods Administration.

If ADEC recommends that the drug should be available for sale in Australia, a sponsor usually the drug company - but sponsors can also include; medical bodies, health professionals, private individuals or their Representatives - applies to the Pharmaceutical Benefits Advisory Committee (PBAC) for listing on the PBS.

The PBAC assesses the evidence on the drug's effectiveness, including its cost e
effectiveness, and advises the Minister for Health and Ageing if the drug should be listed on the PBS.

If the Minister accepts the recommendation of the PBAC, the drug is then referred to the Pharmaceutical Benefits Pricing Authority PBPA which negotiates with the manufacturerer on the price at which the drug will be listed on the PBS and advises the Minister accordingly.