Legislation will be introduced to parliament that would see the price of more than 900 medications come down to a maximum of $25 per script.
The move was spearheaded by the Albanese Labor government, with bipartisan support from the Liberal government during the federal election.
The National Health Amendment (Supporting Patient Access to Cheaper Medicines and Other Measures) Bill 2024 will subsidise drugs to cut $200 million in annual prescription costs for patients.
In a statement, Prime Minister Anthony Albanese said the government had upheld its pledge to bring the price of prescription medicines down.
“The size of your bank balance shouldn’t determine the quality of your healthcare,” he said in a statement.
From Jan. 1, 2026, the maximum out-of-pocket cost will be reduced from $31.60 to $25, while concession card holders will continue to pay no more than $7.70.
Threshold for Government Subsidy Lowered
The amendment to existing legislation will introduce a 25 percent reduction in the number of scripts a concessional patient must fill before the Pharmaceutical Benefits Scheme (PBS) Safety Net applies, which results in medications becoming free.
The current safety net for concession card holders is $277.20 a year, and $1,694 for general patients.
Once general patients hit the threshold, their medicines come down to $7.70 per script for general patients, and are free for concession holders.
If a PBS recipient chooses a more expensive, non-generic medicine, they may have to pay more.
Those with chronic conditions will be able to receive 60-day scripts on more than 100 medications, meaning they won’t need as many doctor and pharmacy visits.
US Body’s Concerns
The move comes as U.S. drug lobby groups argue that Australia’s PBS discriminates against U.S. brands.
In March, the Pharmaceutical Research and Manufacturers of America (PhRMA) urged U.S. President Donald Trump to use “all available trade enforcement tools” to urge Australia to amend the PBS.
PhRMA cited “egregious and discriminatory pricing policies” because Australia preferred the purchase of generic brand drugs due to the pricing difference.
The organisation claims this disadvantages patients by limiting them to only accessing 43 percent of new products.
PhRMA also argued that this tendency can prohibit the use of more innovative drugs.
In June, PhRMA public affairs President Megan Van Etten published a blog post claiming Americans were paying more for their medications to foot the shortfall left by drug purchasing systems such as Australia’s.
Australian Treasurer Jim Chalmers has remained unmoved on the calls.
“We see the PBS as a fundamental part of healthcare in Australia,” he said.
“We’re not willing to negotiate or trade away what is a really important feature of the health system, alongside Medicare and all of the other things that we’re proud of as Australians.”
