The Times Australia
The Times World News

.
The Times Real Estate

.

The price of PBS medicines is coming down. But are we helping the right people?

  • Written by Yuting Zhang, Professor of Health Economics, The University of Melbourne
The price of PBS medicines is coming down. But are we helping the right people?

Some Australians will be paying less for prescription medicines from January, in a move announced this week[1] and designed to ease cost-of-living pressures.

Prime Minister Anthony Albanese said[2] the maximum price of Pharmaceutical Benefits Scheme (PBS) medicines would drop from A$42.50 to $30, at a cost to taxpayers of $765.3 million[3].

There is no reduction for concession-card holders, who will continue to pay up to $6.80[4].

Cutting the cost of medicines this way is a welcome move. But the government has missed a chance to better target cost cuts to certain patient groups, for specific medical conditions and for generic drugs.

Australians are going without medicines

Australians are currently paying more[5] for their prescription medicines than some similar countries, including the United Kingdom, Germany, the Netherlands and New Zealand.

And we know many Australians can’t afford[6] to fill their scripts.

Just under 7%[7] of older Australians said they didn’t buy their prescribed medications because they were too expensive, a higher proportion than other similar countries. For the UK, this figure was about 3%, in New Zealand it was just under 5%.

This is a problem because people who cannot afford to buy essential medicines have worse health and higher mortality[8]. Forgoing medicines may also lead to more health costs in the future, as conditions go untreated and complications arise, leading to emergency care and hospital visits.

So reducing the price of prescription medicines, as announced this week, will mean more people will be able to afford them, with the health and other benefits this brings.

Read more: Last year, half a million Australians couldn't afford to fill a script. Here's how to rein in rising health costs[9]

Can we better target the price cuts?

People who cannot afford to fill their scripts are more likely[10] to have a below-average income, be Indigenous, be adults under 65, and have little input in decisions about their medical treatment. A high price for medicine at the pharmacy (known as a co-payment) is another big factor.

So other countries use a variety of strategies to make it easier for people to afford to fill their scripts. These include:

  • reducing the price of medicines (reducing the co-payment)

  • varying the co-payment by patient characteristic (for instance, income, age and health needs)

  • promoting the discussion of medicines and their costs between providers (such as doctors, pharmacists) and patients.

Australia already has different co-payments[11] – one for general patients and a much lower one for concession-card holders.

There is no firm evidence concession-card holders are forgoing medicines at a different rate to the general population because of costs. So, it makes sense to target any price cuts to the general population, with its higher co-payment.

Emergency department sign with arrow
We could make certain drugs cheaper to encourage people to use them, preventing a trip to hospital. Shutterstock[12]

But there are ways of lowering the co-payment for certain medicines, in particular those that control life-threatening conditions and prevent hospitalisation.

These medicines include[13] those used to treat asthma, severe mental disorders (such as severe depression, schizophrenia, bipolar disorder), heart diseases and diabetes.

The government could consider lowering the co-payment for these medicines, especially for people with multiple chronic conditions and on lower incomes.

Read more: What is the PBS safety net and is it really the best way to cut the cost of medicines?[14]

What else could we do?

This latest announcement only affects medicines costing more than $42.50. The patient pays this co-payment and the government covers the rest. But these accounted for only 70% of PBS drugs[15] dispensed in 2020–21.

A total of 30% of PBS subsidised medicines are cheaper than the co-payment, so the patient pays the full cost.

Most of these cheaper drugs are generic drugs – ones no longer under patent protection. So lowering the co-payment will unlikely affect the cost of these.

If we were hoping to cut the cost of medicines even further, we need to target these generic drugs, which Australians generally pay more for[16] than people in countries including Canada, New Zealand, Japan and many member states of the European Union.

One reason is these countries set a price for each generic drug by using the best price obtained by other comparable countries. If Australia adopted this international benchmarking pricing, we could be saving even more at the pharmacy.

Read more: Explainer: what is Medicare and how does it work?[17]

References

  1. ^ announced this week (www.news.com.au)
  2. ^ said (www.pm.gov.au)
  3. ^ $765.3 million (www.alp.org.au)
  4. ^ $6.80 (www.pbs.gov.au)
  5. ^ paying more (bmjopen.bmj.com)
  6. ^ can’t afford (theconversation.com)
  7. ^ Just under 7% (bmjopen.bmj.com)
  8. ^ higher mortality (www.ncbi.nlm.nih.gov)
  9. ^ Last year, half a million Australians couldn't afford to fill a script. Here's how to rein in rising health costs (theconversation.com)
  10. ^ are more likely (journals.sagepub.com)
  11. ^ different co-payments (www.pbs.gov.au)
  12. ^ Shutterstock (www.shutterstock.com)
  13. ^ include (www.nejm.org)
  14. ^ What is the PBS safety net and is it really the best way to cut the cost of medicines? (theconversation.com)
  15. ^ only 70% of PBS drugs (www.aihw.gov.au)
  16. ^ generally pay more for (grattan.edu.au)
  17. ^ Explainer: what is Medicare and how does it work? (theconversation.com)

Read more https://theconversation.com/the-price-of-pbs-medicines-is-coming-down-but-are-we-helping-the-right-people-190137

The Times Features

Itinerary to Maximize Your Two-Week Adventure in Vietnam and Cambodia

Two weeks may not seem like much, but it’s just the right time for travelers to explore the best of Vietnam and Cambodia. From the bustling streets of Hanoi to the magnificent te...

How to Protect Your Garden Trees from Wind Damage in Australia

In Australia's expansive landscape, garden trees hold noteworthy significance. They not only enhance the aesthetic appeal of our homes but also play an integral role in the local...

Brisbane Homeowners Warned: Non-Compliant Flexible Hoses Pose High Flood Risk

As a homeowner in Brisbane, when you think of the potential for flood damage to your home, you probably think of weather events. But you should know that there may be a tickin...

Argan Oil-Infused Moroccanoil Shampoo: Nourish and Revitalize Your Hair

Are you ready to transform your hair from dull and lifeless to vibrant and full of life? Look no further than the luxurious embrace of Argan Oil-Infused Moroccanoil Shampoo! In a...

Building A Strong Foundation For Any Structure

Building a home or commercial building can be very exciting. The possibilities are endless and the future is interesting. You can always change aspects of the building to meet the ...

The Role of a Family Dentist: Why Every Household Needs One

source A family dentist isn’t like your regular dentist who may specialise in a particular age group and whom you visit only when something goes wrong. A family dentist takes proa...

Times Magazine

"Eternal Nurture" by Cara Barilla: A Timeless Collection of Wisdom and Healing

Renowned Sydney-born author and educator Cara Barilla has released her latest book, Eternal Nurture, a profound collection of inspirational quotes designed to support mindfulness, emotional healing, and personal growth. With a deep commitment to ...

How AI-Driven SEO Enhancements Can Improve Headless CMS Content Visibility

Whereas SEO (search engine optimization) is critical in the digital landscape for making connections to content, much of it is still done manually keyword research, metatags, final tweaks at publication requiring a human element that takes extensiv...

Crypto Expert John Fenga Reveals How Blockchain is Revolutionising Charity

One of the most persistent challenges in the charity sector is trust. Donors often wonder whether their contributions are being used effectively or if overhead costs consume a significant portion. Traditional fundraising methods can be opaque, with...

Navigating Parenting Arrangements in Australia: A Legal Guide for Parents

Understanding Parenting Arrangements in Australia. Child custody disputes are often one of the most emotionally charged aspects of separation or divorce. Parents naturally want what is best for their children, but the legal process of determining ...

Blocky Adventures: A Minecraft Movie Celebration for Your Wrist

The Minecraft movie is almost here—and it’s time to get excited! With the film set to hit theaters on April 4, 2025, fans have a brand-new reason to celebrate. To honor the upcoming blockbuster, watchfaces.co has released a special Minecraft-inspir...

The Ultimate Guide to Apple Watch Faces & Trending Wallpapers

In today’s digital world, personalization is everything. Your smartwatch isn’t just a timepiece—it’s an extension of your style. Thanks to innovative third-party developers, customizing your Apple Watch has reached new heights with stunning designs...

LayBy Shopping