Pharmaceutical Benefits Scheme

The Pharmaceutical Benefits Scheme (PBS) is a program of the Australian Government that provides subsidised prescription drugs to residents of Australia, as well as certain foreign visitors covered by a Reciprocal Health Care Agreement. The PBS seeks to ensure that Australian residents have affordable and reliable access to a wide range of necessary medicines. The PBS has faced increased scrutiny as its cost has increased. The scheme assumes responsibility for the cost of drugs to patients in the community setting rather than while in hospital which is the responsibility of each state and territory. Together with Medicare the PBS is a key component of health care in Australia. The Pharmaceutical Benefits Scheme (PBS) is a program of the Australian Government that provides subsidised prescription drugs to residents of Australia, as well as certain foreign visitors covered by a Reciprocal Health Care Agreement. The PBS seeks to ensure that Australian residents have affordable and reliable access to a wide range of necessary medicines. The PBS has faced increased scrutiny as its cost has increased. The scheme assumes responsibility for the cost of drugs to patients in the community setting rather than while in hospital which is the responsibility of each state and territory. Together with Medicare the PBS is a key component of health care in Australia. The PBS was established by the Labor Chifley Government, by the Pharmaceutical Benefits Act 1947 which commenced on 1 July 1948, as part of a wider plan to create a British-style National Health Service. The scheme was an extension of the similar Repatriation Pharmaceutical Benefits Scheme established in 1919 for Australian servicemen and women who had served in the Boer War and World War I. Though the High Court of Australia ruled that most of Chifley's health care plans were unconstitutional, the PBS was ruled to be constitutional. Initially, PBS covered approximately 140 lifesaving and disease-preventing drugs. Medicines on the PBS list were free to the consumer until 1960, when a 50 cent co-payment was introduced by the Menzies Government. By 2003 the number of drugs included under the scheme had expanded to 601 general products which were marketed as 2,602 different brands. The scheme was appealing to policy makers because it required no major capital works program and could be implemented immediately without lengthy consultation with the medical profession. PBS is governed by the National Health Act 1953 and National Health (Pharmaceutical Benefits) Regulations 1960 (Cth). Pharmaceutical benefits under PBS may only be supplied by pharmacists and medical practitioners approved under the Act. Applications to list a drug on the PBS are administered by the Department of Health. Pharmaceutical benefits under the PBS are administered by Medicare Australia (formerly the Health Insurance Commission) under the Health Insurance Act 1973 (Cth). A benefit under PBS is only given on medications which are listed in the Pharmaceutical Benefits Schedule. The medication may be listed for general use as an unrestricted benefit, or for a specific indication as a restricted benefit. When a PBS medication is dispensed by a pharmacist, the patient pays the patient contribution (subject to concessions and safety nets) and Medicare Australia pays the remainder of the agreed cost of the medication to the pharmacist.