What is the PBS?
Australia's Pharmaceutical Benefits Scheme: how it works, who administers it, what it costs, and why it matters for patients and prescribers.
Overview
The Pharmaceutical Benefits Scheme (PBS) — commonly known as PBS Australia — is an Australian Government program established under the National Health Act 1953 that subsidises the cost of prescription medicines for eligible Australian residents. The pharmaceutical benefit scheme ensures that without the PBS, many medicines would cost hundreds or thousands of dollars per prescription; with it, most patients pay a small co-payment regardless of the medicine's actual cost to government.
The PBS is one of the largest components of Australian health expenditure — costing approximately $16.3 billion in 2025–26. It covers around 900 medicines in over 5,300 item forms. The scheme is updated monthly via the PBS Schedule ↗.
Independent expert body. Recommends medicines for listing based on clinical effectiveness and cost-effectiveness relative to alternatives.
Advises the Minister on PBS prices and negotiates with manufacturers after a positive PBAC recommendation.
Administers the scheme, publishes the PBS Schedule, and coordinates policy with Services Australia for claims processing.
Processes pharmacy claims, manages Safety Net registrations, and handles authority prescription approvals via the PBS Authority line.
How the PBS works: from prescription to subsidy
Prescriber writes a PBS prescription
An eligible prescriber (medical practitioner, nurse practitioner, or eligible dentist/optometrist for certain items) writes a prescription for a listed PBS medicine. The prescription must comply with the item's benefit type and any restriction conditions. For authority items, prior approval from Services Australia is required.
Patient presents at an approved pharmacy
The patient presents their prescription and Medicare card (or concession card) at an approved dispensing pharmacy. The pharmacist verifies the patient's eligibility and checks the item against the PBS Schedule. Brand substitution may occur — the pharmacist may dispense a brand-substitutable generic or biosimilar unless the prescriber has marked "brand substitution not permitted."
Patient pays the co-payment
The patient pays the applicable co-payment: approximately $7.70 (general) or $2.80 (concession) in 2026. These amounts are indexed annually. If the PBS price of a medicine is less than the co-payment, the patient pays only the PBS price. Some medicines have safety-net recording requirements. Once a family reaches the Safety Net threshold, medicines are free (concession) or significantly cheaper (general).
Pharmacy claims the benefit from government
The pharmacy submits a claim to Services Australia for the difference between the PBS price and the patient's co-payment. Claims are processed electronically via ECLIPSE ↗. Pharmacies are reimbursed the PBS manufacturer price plus a dispensing fee (approximately $8.19 in 2026), minus the patient's co-payment.
Co-payment amounts (2026)
Co-payments are indexed to CPI on 1 January each year. Concessional patients pay significantly less per prescription.
| Patient type | Co-payment per script | Safety Net threshold | After Safety Net |
|---|---|---|---|
| General patient | ~$7.70 | ~$1,636 (approx. 60 scripts) | ~$7.70 (reduced but not free) |
| Concession card holder | ~$2.80 | ~$348 (approx. 60 scripts) | Free (no further co-payment) |
| Close the Gap patient (CTG) | $0 (co-payment waived) | — | — |
Exact thresholds are updated each year. Check PBS fees and co-payments ↗ for current figures. See also: Close the Gap (CTG) subsidy.
What the PBS does not cover
- Medicines not listed on the PBS Schedule — patients pay the full price. Some can be accessed through the TGA Special Access Scheme ↗ or hospital formularies.
- Over-the-counter (OTC) medicines — paracetamol, ibuprofen, and other non-prescription medicines are not subsidised by PBS.
- Prescriptions written outside PBS indications — a medicine may be PBS-listed for one condition but not another; prescribing outside the PBS restriction means the patient pays full price (or a private prescription price).
- Hospital inpatient medicines — PBS is for outpatient (community) prescriptions. Inpatient hospital medicines are funded through the hospital system (state/territory governments).
- Section 100 medicines dispensed through approved channels — certain highly specialised drugs are available only through specific Section 100 arrangements.