Prescription Charges in Australia

Prescription Charges in Australia

Background

The national healthcare system in Australia is Medicare. This provides public hospital services free of charge to all residents along with free, or subsidised, out-of-hospital care, such as doctor’s consultations. Medicare is funded through general taxation and a Medicare levy based on income level (1.5% of taxable income or 2.5% for those on high incomes who do not have private insurance). The government also provides a 30% rebate for those who take out private health insurance [1].

Medicare includes the Pharmaceutical Benefits Scheme ( PBS) which provides subsidised access to over [2],600 brands of prescription medicines [2]. Approximately 90% of prescriptions in Australia are PBS items [3].

Patient Co-Payments

PBS pays the cost of the medicine up to the list price, above a certain contribution made by the patient. Contribution rates fall into three categories: general patients, concession card holders and Department of Veterans’ Affairs ( DVA) orange card holders. These contributions are adjusted yearly and do not cover additional costs of more expensive brands of medicine 4. Below the levels shown the contribution, the patient will pay the dispensing price plus any pharmacy fee.

• General patients: A$29.50.
• Concession card holders: A$4.70.
• DVA card holders: A$4.70.

Note: PBS patient contribution amounts as of 1 January 2006 [4]

Reduced Co-Payments

Concession and DVA card holders and are entitled to a reduced contribution as shown below. Concession cards include Pensioner Cards, Health Care Cards and Commonwealth Seniors’ Health Cards [5]. Most concession cards are for people on low incomes. Some concession cards are also available to people who are self-funded retirees who do not receive a pension (please see website for full list of those eligible [6]).

DVA orange cards are cards for veterans and their dependants which give access to PBS medicines at a concession rate [7].

Co-Payment Exemptions

As can be seen above, under normal circumstances there are no groups of patients, young, old or chronically ill that receive their medicines free of charge.

Cap on Co-Payment

A PBS Safety Net [8] is in place in Australia which helps individuals or families who need a lot of medicines in a calendar year with the cost of their medication. Once an individual or family reaches a Safety Net threshold, they can apply for a PBS Safety Net card which entitles them to less expensive (or free) medication for the rest of the calendar year.

General patients:

• PBS Safety Net threshold: A$960.10.
• PBS Safety Net contribution: A$4.7.

Concession card holders:

• PBS Safety Net threshold: A$253.80.
• PBS Safety Net contribution: Free.

In addition, a Pharmaceutical Allowance is paid to certain groups of patients to help cover out-of-pocket expenses. This is a non-taxable fortnightly payment of A$5.80 a fortnight for single and A$2.90 a fortnight for each eligible member of a couple (A$5.80 combined) [3] and is available to those receiving a pension, holding a DVA orange card or holding a range of low income allowances. This scheme also entitles the holder to free PBS medicines for the rest of the year, once 52 prescription medicines have been paid for through the PBS in a calendar year, [9].

Notes

1. Bronner, M et al (2005) Pharmaceutical Pricing & Reimbursement 2005: a concise guide, PPR Communications Ltd
2. medicareaustralia.gov.au/yourhealth/our_services/pbs.htm [Accessed 9/01/2006]
3. Seget, S (2005) Pharmaceutical Pricing Strategies: price optimisation, reimbursement and regulation in Europe, US and Japan, Business Insights Ltd.
4. medicareaustralia.gov.au/yourhealth/our_services/apbs.htm#how [Accessed 9/01/2006]
5. www.medicareaustralia.gov.au/yourhealth/our_services/msn/threshold_300.htm#c [Accessed 9/01/2006]
6. www.betterhealth.vic.gov.au/bhcv2/bhcarticles.nsf/pages/Concession_cards?OpenDocument [Accessed 9/01/2006]
7. dva.gov.au/health/vtec/treatmentcards.htm [Accessed 9/01/2006] also know as ‘Repatriation Pharmaceutical Benefits Card (Orange Card)’
8. medicareaustralia.gov.au/yourhealth/our_services/pbs_safety_net.htm [Accessed 9/01/2006]
9. centrelink.gov.au/internet/internet.nsf/ea3b9a1335df87bcca2569890008040e/36f9a854435b37b0ca2570d5000d1444!OpenDocument & centrelink.gov.au/internet/internet.nsf/ea3b9a1335df87bcca2569890008040e/c0891762a5fd2350ca256e8d0012ef8e!OpenDocument [Accessed 9/01/2006]