03.All about the PBS
The price you pay for a prescription medicine depends on many factors, including:
- Whether the medicine is subsidised under the Pharmaceutical Benefits Scheme and if so, on price negotiations between the government, drug companies and the Pharmacy Guild;
- Your status as a patient (general, concessional or repatriation);
- Whether a brand price premium, therapeutic group premium or a special patient contribution applies, and your safety net status.
Under the PBS, drug manufacturers negotiate the price they can charge for their products with the government. This is the “amount paid by the government” found on the PBS website. If the price of the medication is greater than the cost of the patient co-payment (currently capped at $33.30 for general patients or $5.40 for concessional and repatriation patients), the government pays the difference to the pharmacy.
For example, for 30 tablets of Lipitor (40mg), a cholesterol-lowering drug with a dispensed price of $79.05, the pharmacy receives $45.75 ($79.05 – $33.30) from the government. For concession consumers, the pharmacy receives $73.65 ($79.05 minus $5.40). If the price of the medication is less than your co-payment, you pay the full cost of the medicine. In this situation, the dispensing pharmacist can include additional fees and safety net recording. This accounts for the “price to consumer” found on the PBS website. The recommended price to consumer for the branded diabetic medication Diabex (500mg, 100 tablets), for example, is $19.76 on the PBS website. However, some pharmacies will charge below the recommended price – you’ll pay $17.55 for Diabex from Terry White Chemists and $10.55 from Chemist Warehouse. But other pharmacies may add in a number of discretionary pharmacy charges – beyond the recommended price – taking the cost of your medication closer to the capped co-payments.
To save on your medications, ask your doctor or pharmacist for a generic equivalent of brand name drugs suitable for your condition. Once a product is off patent, the government only subsidises the price of the lowest cost generic alternative. The original brand manufacturer can set the price they think the market will bear. The difference is a “brand or therapeutic group premium” that the patient must pay (and does not contribute to the PBS Safety Net). Unless your doctor has specifically indicated otherwise on the prescription, a pharmacist can dispense another brand of the same medicine at your request.
This way, you can avoid paying a premium. In the case of Diabex, you can instead opt for the generic brand, Diaformin (500mg, 100 tablets), which contains the same active ingredient but only costs $7 at Chemist Warehouse (see our Pharmacy price comparison table).