Costs of new medicines
Medicines cost pharmaceutical companies a lot to develop. They involve years of research and development, followed by clinical testing and trials to show they are safe and effective.
This is one of the reasons new medicines coming onto the market are expensive.
Medicines subsidised through the PBS and RPBS
How it works
If subsidised, you pay a lower price for the medicine and the government pays the rest. The amount depends on whether you are a general patient or concession cardholder.
Your pharmacist may choose to provide you with a further $1 discount.
From 1 January 2023, pharmacists also have the option to provide an increased discount to general patients for specific eligible medicines. This is not a mandatory discount and patients are encouraged to compare pharmacy prices for your medicines.
The PBS safety net provides further support for people who need a lot of medicine. Once you spend a certain amount on your medicine in a calendar year, each prescription will be further discounted for general patients or free for concession cardholders for the rest of that year.
The RPBS provides medicines to eligible veterans and their dependants at concession prices.
The Closing the Gap PBS Co-payment Program further reduces the cost of PBS medicines for Aboriginal and Torres Strait Islander people with a chronic disease (or at risk of a chronic disease).
You can search your medicine to see its full price before the PBS subsidy, by entering it in the PBS medicine search box at the top of the page.
How we decide which medicines to include on the PBS
The Australian Government uses various health technology assessment processes to inform what to subsidise. For medicines, it is the Pharmaceutical Benefits Advisory Committee (PBAC), which considers applications to list medicines on the PBS, including health benefits, side effects and cost-effectiveness. The committee then makes a recommendation to the Australian Government.
If a medicine is found to be acceptably cost-effective for the extra health benefits it provides over currently available medicines, the Australian Government negotiates arrangements to list it on the PBS with the supplier.
Read more about how we decide which medicines to include on the PBS.
Further reductions to cost of PBS subsidised medicines
If you are a concession patient, you will pay a lower price for your PBS-subsidised medicine. Once you reach the safety net threshold in a calendar year, your medicine will be free for the rest of that year. This includes if you have a:
- Pensioner Concession Card
- Commonwealth Seniors Health Card
- Health Care Card
- Department of Veterans' Affairs Gold, White, Orange or Pensioner Concession Card.
Cost of medicines not on the PBS
Under the Life Saving Drugs Program, we provide essential medicines that are not listed on the PBS to eligible people with rare and life-threatening diseases, at no cost to these patients.
If your medicine is not covered by the PBS, the RPBS or the Life Saving Drugs Program, you will pay full price.
Pharmacies charge differently for these medicines, so it can be worth shopping around to find the best price.
Read more about keeping the cost of medicines down.