FAQ – EAPD for Consumers

 

From 1 April 2012, the prices of some Pharmaceutical Benefits Scheme (PBS) medicines will be reduced, as part of the Australian Government’s Expanded and Accelerated Price Disclosure (EAPD) program. 

The PBS and patient co-payments

The PBS helps to make medicines affordable for all Australians by limiting the amount you pay towards the cost of your PBS medicine.

Many medicines cost a lot more than you actually pay. Currently (from 1 January 2012), you will pay up to $35.40 for most PBS medicines or $5.80 if you have a concession card.  This amount is known as the co-payment.  The Australian Government pays the remaining cost. 

These co-payments are not changing on 1 April 2012.

Why are the prices being reduced?

The aim of price disclosure is to ensure that Australian taxpayers benefit from discounts and incentives provided by manufacturers for medicines where there is more than one brand on the PBS. 

Once the patent of an older medicine expires, it can be sold under a number of brand names.  Manufacturers often sell these new brands at prices much lower than the Government approved price to compete for market share, but the Government still pays the full price.  Price disclosure brings the Government price in line with the market price, benefiting taxpayers and consumers. 

What is Price Disclosure?

To keep the PBS affordable for everyone, the Government pays close attention to the prices it pays for PBS medicines.

The price disclosure program was developed to reduce the prices of some older PBS medicines, to make them follow the prices currently paid by pharmacies. The first rounds of price disclosure have resulted in price reductions for many brands of commonly used medicines on the first reduction day, 1 April 2012.  This reduces the price paid by Government for many medicines, which helps to ensure the sustainability of the PBS. 

In some cases, consumers will also pay less for each PBS prescription.      

How does price disclosure reduce the amount paid by patients?

Some medicines that take price disclosure reductions will now be cheaper than the $35.40 co?payment amount. 

For example, Drug A currently costs $50.  On the reduction day, the price of Drug A is reduced to $25.

Instead of paying $35.40, non-concessional patients will now pay $25, saving $10.40 per script. 

Concessional patients will continue to pay only $5.80 for their prescriptions. 

Not all formulations of medicines taking reductions will result in patient savings.  For example, a stronger formulation of Drug A currently costs $100.  After the reduction day, the price of Drug A is reduced to $50.  Patients will continue to pay only $35.40 (or $5.80 for concessional patients), however the cost to the Government will be reduced, which helps to ensure that the PBS remains affordable into the future. 

Will the price of my medicine be reduced?

A full list of brands that may be cheaper for non-concessional patients from 1 April 2012 is available in the PDF: Brands that may be cheaper for non-concessional patients from 1 April 2012 (PDF 442KB)

Some brands of medicine have extra premiums charged by the manufacturer of the medicine and paid by the patient, whether they are a general or concessional patient. If these medicines are affected by price disclosure, the brand premium paid by the patient will also be reduced.

A list of brands with reduced premiums from 1 April 2012 is available on the PBS website.

To find out the new price for your brand of medicine, visit your pharmacist.  Different pharmacies may charge different amounts for medicines that cost less than the co-payment.

How are the new prices calculated?

Price reductions vary for different medicines.  Each reduction is dependent upon the level of discounting for brands of that medicine, as reported by manufacturers. 

There will be a price reduction if the average price being reported by all manufacturers of similar forms of a medicine (e.g. all brands of paracetamol tablets and capsules), is more than 10% under the current subsidised price.  In these cases, the prices of all brands of the medicine will be reduced.

For example, there are currently several brands of Drug B.  Based on data from manufacturers under the price disclosure arrangements, the average sale price for all brands of Drug B is around 20% below the agreed price.  (This is a weighted average, which means that sales volume of each brand has been taken into account).

All brands of Drug B will be reduced in price by around 20% on the reduction day. 

Which medicines are included in the program?

A list of medicines included in EAPD is available on the Drugs subject to Expanded and Accelerated Price Disclosure web page.

When will price reductions take place?

Scheduled reduction days for price disclosure reductions are 1 April, 1 August and 1 December in each year, depending when the medicine first became subject to price disclosure.  The main reduction day for the majority of medicines is 1 April each year.

A full list of the medicines subject to price disclosure and the relevant reduction day for each medicine is available on the Drugs subject to Expanded and Accelerated Price Disclosure web page.

Not every medicine will take a reduction on every relevant reduction day, as reductions are only required where there is more than a 10% average discount (weighted by volume).

Will I be able to fill my script on the reduction day?

The Government and the medicines industry have been working together for a long time to make sure these price reductions run smoothly and without disruption.  There are many mechanisms in place to ensure that all Australians have timely access to their medicines, including on price reduction days. 

The laws that govern the PBS, and the contracts with suppliers of medicines, are all in place to help ensure that essential medicines are available in pharmacies when patients need them.  Pharmacists are expected to maintain an adequate supply of PBS medicines and to meet their expected demand.

In the event that pharmacies do not have adequate stock on hand, arrangements under the wholesaling process provide for them to order the medicine and have its delivery guaranteed within 24 hours.

If you have any concerns about the supply of your medication at any time, please ask your pharmacist for advice. 

In the unlikely event that your pharmacist does not have your brand of medicine at any time:

• You can choose to ask your pharmacist to order your medicine – it should arrive within 24 hours.
• You can ask your pharmacist if a different brand would be suitable for you.  There is often more than one brand of the same medicine available. 

Remember that under the PBS, you have a choice of pharmacy and a choice of brands.  PBS prescriptions can be used at any PBS pharmacy.

How can I receive updates?

Up-to-date information about EAPD arrangements is made available on the EAPD section of the PBS website.

What if I have further questions?

If you have any further questions regarding the Expanded and Accelerated Price Disclosure arrangements please email the Department of Health at eapd@health.gov.au