8. Variation to unit costs of medicines for Section 4 of a submission to the PBAC

The financial analysis in a submission prepared according to Section 4 of the PBAC Guidelines takes the perspective of the Australian Government health budget. This means that cost components borne by payers other than the health budget of the Australian Government are excluded from this financial analysis.

In practice, this means that non-PBS/RPBS medicines, over-the-counter medicines and medicine delivery systems are excluded from this financial analysis because they incur no direct financial cost to the PBS/RPBS. It also means that the range of patient co-payments is subtracted from the unit cost of each PBS/RPBS medicine.

8.1    Calculating the unit cost of medicines or medicinal preparations from the perspective of the PBS/RPBS

For nearly all medicines or medicinal preparations included in the financial analyses, from the perspective of the PBS/RPBS, the unit cost to be used is the DPMQ (or DPMA, adjusted for the amount suitable for the average patient receiving the therapy, where relevant) minus the weighted average patient co-payment.

Current information about the PBS/RPBS patient co-payment and safety net thresholds is found on the department’s website. The highest co-payment is paid by General patients; a lower co-payment is paid by Concessional and Repatriation patients, and under the General patient safety net provisions; and there is no co‑payment under the Concessional patient and Repatriation patient safety net provisions.

Report the disaggregation of use across patient co-payment categories for all currently listed medicines in the financial analyses for the most recent 12 months available. Substract the relevant co-payment from the relevant DPMQ to calculate the unit cost to the PBS/RPBS in each category.

The disaggregation for the proposed medicine or medicinal preparation is usually assumed to be that of the closest therapy that is currently listed (and specifically the main comparator, if it is PBS listed).

The department’s website has a proforma in Excel format for estimating the extent of use and financial implications of the proposed medicine. Sponsors can use this to help prepare Section 4 of their submission.

8.2    Calculating the financial unit cost of medical services from the perspective of the MBS

For nearly all medical services included in the financial analysis, from the perspective of the MBS, the financial unit cost to be used is the rebate amount, which may be 75%, 85% or 100% of the Schedule Fee, or some other fixed amount, as defined for each item in the MBS. Although 85% of the Schedule Fee is the usual patient rebate for out-of-hospital services, and 75% is the usual patient rebate for in‑hospital services, it is recognised that item-level data are not publicly available on inpatient and outpatient ratios, bulk billing rates or patient contributions. On this basis, use the most likely applicable rebate, and justify the selection based on clinical opinion.

Use the most recent version of the MBS, and specify the effective date of the MBS used in the submission.