The Australian federal government is set to introduce legislation this week that aims to reduce the cost of Pharmaceutical Benefits Scheme (PBS) prescriptions to $25, a decrease from the current $31.60. The announcement aligns with Labor’s commitment made during the election campaign to ease the financial burden on Australians, which is expected to generate annual savings of around $200 million.
Once the legislation passes, the new pricing will come into effect on January 1. Pensioners and concession cardholders will continue to benefit from a significantly lower payment of $7.70 for their prescriptions, a rate that will hold steady until at least 2030. Prime Minister Anthony Albanese heralded the measure as part of a broader strategy to provide cost-of-living relief for all Australians. He emphasised that access to quality healthcare should not depend on an individual’s financial circumstances.
Health Minister Mark Butler stated that this legislative change will lead to the lowest medicine prices seen in decades. He commented that “cheaper medicines are good for the hip pocket and good for your health,” highlighting that for the general populace, the cost of medicines hasn’t been this low since 2004.
This adjustment represents a price reduction of more than 20% and follows earlier cuts in 2023, where the maximum price of a PBS script was reduced from $42.50 to $30. The government is advancing this bill in the context of recent comments from US President Donald Trump, who proposed potential tariffs on pharmaceuticals of up to 200%, a move that positions pharmaceuticals as one of Australia’s key exports to the US. In 2022, Australia exported approximately $2.2 billion worth of pharmaceutical products to the US, according to data from the UN’s Comtrade database.
The Australian government has been firm in its stance against compromising the PBS in trade negotiations. The PBS is a vital government initiative that enables Australians to access a wide range of essential medicines at subsidised prices. There are two primary pricing tiers under the PBS: the general rate—which will drop to $25—and the concessional rate for eligible concession-card holders that remains fixed at $7.70 until 2030. Currently, there are over 900 medications listed in the PBS, encompassing more than 5,000 different brands.
To check if specific medications are part of the PBS, individuals can visit the official PBS website.
