Pharmaceutical Benefit Scheme (PBS) In Australia: An Overview

Introduction to PBS scheme and its purpose

Pharmaceutical benefit scheme (PBS) can be described as a program formulated by the Australian Government that provides prescription drugs at subsidized rates to the Australian citizens. This scheme was established in the year 1948 under the Pharmaceutical Benefits Act of 1947. The main reason for the establishment of PBS is to ensure that the Australian can have proper access to the reliable and affordable and necessary drugs. Currently the cost of the of the drugs have increased and due to this PBS is undergoing scrutiny (Cheng et al., 2012). The PBS scheme entirely focusses at the community level instead of the hospital setting which a responsibility of the local and the state government. Thus, it can be inferred that the PBS scheme along with the Medicare is one of the basic component of the Australian Healthcare. The medications that are listed only within the pharmaceutical benefit schedule receives the Medicare. The PBS scheme faces both the opportunities and challenges. One of the prime challenges that are faced by the PBS scheme is the enlisting of the new pharmaceuticals. It has been the rule that the 10 million per year is to be approved by the cabinet. However, due to budget pressures, the listing of several pharmaceuticals like severe asthma, chronic pain, schizophrenia is deferred (, 2018). This study is based on the critical analysis of the Pharmaceutical benefit scheme and consumption of medicines in Australia.

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Pharmaceutical Benefit Scheme (PBS) was implemented in the healthcare facility so that in case of emergency or in the need of medication, without any extra prescription or paper, medications could be provided to the patient in need. ThisPBS chart is inclusive of PBS and non-PBS medications and is based on the best evidence available (Clarke, 2012). Despite the fact that these PBS medication chart, which is divided in several section depending on the demand and availability of the drug, these charts has not been changed much in the recent times. The following chart provides a detailed idea regarding this process (Mellish et al., 2015).

(Mellish et al., 2015)

As it is visible in the list that with time, the restriction in the PBS list decreased continuously and the involvement of the newly discovered lifesaving drugs in the PBS list were delayed which affected patients and their health condition.  However, as per the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960, one medicine is valid to be enlisted in the PBS list only after it is registered under the Therapeutic Goods Administration. The government has appointed a non-governmental body namely Pharmaceutical Benefits Advisory Committee, that decides the incorporation of medicines in the PBS list.

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Challenges and opportunities faced by the PBS scheme

The following table determines the total expenditure of Australian government on PBS and incorporation of new drugs in the list over the years (Cheng et al., 2012).

As per this table, a steady growth in the generation, involvement and update of the PBS has been seen from 2005 to 2013. During these years, annual growth has been seen increasing by in a steady manner however; the rate of other annual section which is section 100 has been seen increasing with an average of almost 20%.

Further, average annual growth from expenditure to annual growth rate is presented through the table below.









Expenditure  (millions)









Annual Growth Rate







Within these, the expenditure in the chemotherapy section has been mentioned as the fastest growing section in the medication section with a total expenditure of 63% of the entire PBS budget. Further, the drugs that were generated for life threatening disease and rare diseases had 13% of the total expenditure (, 2018). Besides these, discussing the financial implication requires the discussion about changes in the health budget of Australia, changes in the DHS and MBS systems, increased use of medication, and limits the usage restriction. This will affect the financial condition of the authority providing the PBS scheme to the population and the risk of disease will increase due to increased uncertainty of medication use (, 2018).

Issues with PBS- from the year 2005 to the year 2014, the annual costs related to the PBS has increased from 6 billion dollars to 9 billion dollars. This increase is a growth of 52 percent and this means that the price rise has been about 6 percent each year. While the prices of the highly subsidized drugs have increased by 200 percent and this means that the overall increased every year is 23 percent. This growth has been seen due to the arrival of expensive pharmaceutical and therapies of Hepatitis C, antiviral therapies for HIV, small molecules that acts to inhibit the growth of cancer (Vitry&Roughead, 2014). Another major problem that arises is the enlisting of the new pharmaceuticals and budget pressures have deferred the enlisting of the new drugs. The new drugs are related to the pharmaceuticals related to severe asthma, chronic pain, schizophrenia (Page et al., 2015). There are other challenges that include whether the taxpayers are receiving proper value for the money, proper funds for the treatment of the ageing population, cost effectiveness of the expensive medicines, prediction of the long-term outcomes of the medicines, insufficient and inadequate long term trials of the drugs. There are challenges regarding the justification of the drugs for the rare patients that require extremely costly drugs, and finding proper resources and relocation of the same (Mellish et al., 2015).

Financial implications for Australian government

What can be done better/ differently? – The pharmaceuticals companies are the profit driven industries and the Australians are looing the drugs that are affordable. It is thus needless to say that the patents pertaining to the costly expensive therapies will expire in the near future. There is a probable solution and it includes the devising of biosimilar that behave like mimic molecules. The biosimilar of the therapies and the drugs can be used potentially to save the cost. However, it is important to note that such biosimilar are not identical and require the procedures of evaluation before marketing (Denaro& Martin, 2016). Another major factor of price rise is that majority of the drugs prescribed belong to the generic category while only a small portion of it belongs to the therapeutic classes. Thus, price disclosure can be one method of price reductions of the drugs that are yet to receive the patent. This will significantly bring down the price (Clarke, 2012).

Reasons for drug overuse- The most common type of drug that are overused or abused are the sedatives and analgesics (, 2018). These type of drugs are abused due to their increased availability. The other reasons for the misuse of drug are losing weight, being dependent on the drug, having issues with the withdrawal symptoms, to experience the same effects, providing false information regarding the quantity of the drug usage, neglecting activities like study and work (, 2018).


As the Australian government implemented the pharmaceutical benefit scheme for the betterment and quality healthcare of countrymen, its decreasing reliability and benefit should be revived by the government. There are several sections, which require proper modification in PBS so that its reliability could be increased.  The first recommendation will be in the section of incorporation of drugs in the PBS list. The general process requires ample time due to which patients who are in serious need for the medicine are unable to avail the subsidy and had to spend huge amount of money for their quality treatment. Therefore, implementation of quick incorporation strategy should be present. Secondly, the availability of drug should be monitored properly so that unavailability of PBS enlisted drug does no0t become an issue for the people of Australia. Therefore, these are the recommendations that should be implemented by the PBS authority to increase the reliability of the scheme.


Cheng, A. C., Turnidge, J., Collignon, P., Looke, D., Barton, M., & Gottlieb, T. (2012). Control of fluoroquinolone resistance through successful regulation, Australia. Emerging infectious diseases, 18(9), 1453.

Clarke, P. M. (2012). Challenges and opportunities for the Pharmaceutical Benefits Scheme. The Medical Journal of Australia, 196(3), 153-154.

Denaro, C., & Martin, J. (2016). The challenge of costly drugs. Australian prescriber, 39(3), 72. (2018). Drug abuse. Retrieved from

Mellish, L., Karanges, E. A., Litchfield, M. J., Schaffer, A. L., Blanch, B., Daniels, B. J., … & Pearson, S. A. (2015). The Australian Pharmaceutical Benefits Scheme data collection: a practical guide for researchers. BMC research notes, 8(1), 634.

Page, E., Kemp-Casey, A., Korda, R., & Banks, E. (2015). Using Australian Pharmaceutical Benefits Scheme data for pharmacoepidemiological research: challenges and approaches. Public Health Res Pract, 25(4), e2541546. (2018). Pharmaceutical Benefits Scheme (PBS) | Home. Retrieved from;jsessionid=gmutx1tbsunf169wz8a83tgv6 (2018). RACGP – Prescription drug abuse – A timely update. Retrieved from

Vitry, A., & Roughead, E. (2014). Managed entry agreements for pharmaceuticals in Australia. Health Policy, 117(3), 345-352.