Better value for money

The Australian Government has worked cooperatively with the medicines industry and pharmacy sector to deliver $2.5 billion in net savings over five years from 2010‑11 to 2014‑15.

PBS pricing reforms

So Australians can continue to access new and expensive medicines at reasonable cost, while the ongoing viability of the Pharmaceutical Benefits Scheme (PBS) is maintained, the Government is introducing a suite of reforms to the pricing of medicines under the PBS, negotiated collaboratively with Medicines Australia.

These reforms mean better value for money for taxpayers through expanded price disclosure arrangements and price reductions on medicines subject to market competition.

The Fifth Community Pharmacy Agreement

The Government has also concluded the Fifth Community Pharmacy Agreement with the Pharmacy Guild of Australia.

The new arrangements will support the community pharmacy network and more patient‑centred approaches and services, while also providing better value for money.

Improving the sustainability of support for medical expenses

To improve the long‑term sustainability of the net medical expenses tax offset, the Government is increasing the threshold above which a taxpayer can claim the offset to $2,000 and will commence annually indexing it to the Consumer Price Index, with effect from 1 July 2010. These reforms will result in savings of $350 million over four years.

The threshold was last increased in 2002 and has not been indexed since that time. The number of people claiming the offset has grown by, on average, 12 per cent per annum, while total claims have grown by 16 per cent per annum over the period to 2008.