Understanding the Pharmaceutical Benefits Scheme (PBS)
- Tara Ly
- 1 day ago
- 3 min read
You have probably heard news reports referring to the Pharmaceutical Benefits Scheme (PBS) or perhaps your pharmacist has mentioned it. But do you know what it is and how it affects you?
WHAT IS THE PHARMACEUTICAL BENEFITS SCHEME?
The Pharmaceutical Benefits Scheme or PBS for short, is one of the things that stands the Australian health system apart from others. It first began in 1948 and is governed by the National Health Act 1953 (Commonwealth).
It was initially introduced as a limited scheme designed to provided free medicines for pensioners and a list of 139 ‘lifesaving and disease preventing’ medicines free of charge for others in the community.
Today, the PBS subsidises the cost of over 900 prescription medicines; making them more affordable to Australians. For the 2024–25 financial year the cost to the Federal Government was $19.1 Billion.
HOW DOES THE SCHEME WORK?
The PBS covers a large number of prescription medicines, but it is important to understant that it does not cover all. To be approved, these drugs are subject to a rigorous, multi-stage process focusing on safety, clinical effectiveness, and cost-effectiveness. After TGA approval for safety, the Pharmaceutical Benefits Advisory Committee (PBAC) evaluates the drug, followed by government price negotiations and final ministerial approvall.
When you buy a medicine listed on the PBS, the cost is shared between you and the government. The price you pay for PBS medicines that is not covered by the government is called the co-payment. This is the amount you pay at the pharmacy for each prescription. You may also pay a premium for some brands of drugs in addition to the co-payment.
Most of the listed medicines are dispensed by pharmacists and used by patients at home. However, some medicines are dangerous to administer and need medical supervision (such as chemotherapy drugs) and are only accessible at specialised medical services, usually hospitals.
CHANGES EFFECTIVE 1ST JANUARY 2026
From 1 January 2026, the maximum co-payment for PBS prescription medicines (the amount you pay the pharmacy) was reduced from$31.60 down to $25. This has the effect of making PBS medications even more affordable.
The co-payment reduction applies to everyone with a Medicare card. For those with a Commonwealth concession card, the maximum co-payment for a PBS prescription medicine will continue to be $7.70 until 1 January 2030.
This schedule is now on-line and updated monthly. To view this, use the link below.
WHO IS ELIGIBLE FOR THE PHARMACEUTICAL BENEFITS SCHEME?
The Scheme is available to all Australian residents who hold a current Medicare card.
Overseas visitors from countries with which Australia has a Reciprocal Health Care Agreement (RHCA) are also eligible to access the Scheme. Australia currently has RHCAs with the United Kingdom, Ireland, New Zealand, Malta, Italy, Sweden, the Netherlands, Finland, Norway, Belgium, and Slovenia.
Residents of these countries must show their passports when lodging a prescription to prove their eligibility or they can contact Services Australia and get a Reciprocal Health Care Agreement Card to prove their eligibility. Some overseas visitors may not be eligible for this card.
Only those eligible for the PBS will receive subsidised medication and every time you present your script to the pharmacist, you will need to provide your Medicare card.
Eligible veterans may need to present their DVA card in addition to their Medicare card.
With your consent, the pharmacist may (at their discretion) keep a record of your Medicare number so that you do not have to show the actual card every time you lodge a script.
