The bill amends the National Health Act 1953 to reduce the Pharmaceutical Benefits Scheme general patient co-payment from $31.60 to $25.00, effective 1 January 2026, aiming to make medicines more affordable for non-concessional patients.
The National Health Amendment (Cheaper Medicines) Bill 2025 updates Part VII of the National Health Act 1953 to lower the PBS general patient charge by $6.60. Item 1 of Schedule 1 amends section 84(1) to redefine “general patient charge amount” as $25.00 from 1 January 2026. Items 2–4 revise section 87(2) by removing references to “allowable discount” and substituting the new charge amount. Item 5 omits discount references in subsection 99(2C). Item 6 extends the freeze on general patient co-payment indexation until 1 January 2026. Items 7 and 8 repeal section 99GC and related provisions phasing out the discount for general patients. From 1 January 2027, co-payment indexation by the CPI will resume under section 99G. These amendments seek to reduce out-of-pocket costs for general PBS users while preserving the scheme’s fiscal sustainability.
Improved Affordability and Adherence: Cutting the co-payment by $6.60 directly lowers out-of-pocket spending for over 5 million general patients, reducing financial barriers to filling prescriptions and improving medication adherence [Judgment].
Health and Economic Benefits: Better adherence to needed therapies reduces avoidable hospitalisations, emergency visits and long-term care costs, generating net welfare gains that outweigh the initial investment [Judgment].
Equity and Social Justice: A lower co-payment narrows the gap in health access between income groups, ensuring that Australians without concession cards are not disproportionately discouraged from taking necessary medicines [Judgment].
While nominally improving affordability, there is limited robust evidence that a general co-payment cut leads to meaningful increases in medicine use among those who actually face cost-related non-adherence. A recent evaluation of the 2023 reduction found no significant rise in prescription volumes [Judgment].
The proposal carries an estimated $689 million additional cost over four years, which may crowd out funding for new PBS listings, bulk-billing incentives and other health priorities without guaranteed downstream savings.
Existing targeted measures—such as concessional patient rates, the PBS Safety Net and the Closing the Gap co-payment program—already protect vulnerable groups. A broad reduction spreads benefits to many who do not need relief, making it an inefficient allocation of scarce public funds [Judgment].
2025-07-30
House of Representatives
Before Senate
Unspecified
Health, Disability and Ageing
Healthcare, Social Support / Welfare