Operation of The PBS
The PBS is governed by the National Health Act 1953 (Cth) and National Health (Pharmaceutical Benefits) Regulations 1960 (Cth). Pharmaceutical Benefits under the PBS may only be supplied by pharmacists and medical practitioners approved under the Act. The PBS is administered by Medicare Australia (formerly the Health Insurance Commission) under the Health Insurance Act 1973 (Cth).
In order to receive a Pharmaceutical Benefit under the PBS, a consumer is prescribed the drug listed in the Schedule of Pharmaceutical Benefits. The subsidy is automatically applied when the drug is dispensed at a pharmacy and the cost to the patient is the patient co-payment contribution rather than the full cost of the medication.
The cost of a medication is negotiated between the Commonwealth Government, through the Pharmaceutical Benefits Pricing Authority (PBPA), and the supplier of the drug. This agreed price is then the basis of the dispensed price of the medication which is negotiated between the Commonwealth Government and the Pharmacy Guild of Australia under the Community Pharmacy Agreement. The dispensed price includes the wholesaler's markup, pharmacist's markup, and a dispensing fee. Pharmacies purchase PBS-listed drugs from the wholesaler or supplier, and claim the difference between the dispensed price and the patient co-payment contribution from Medicare Australia.
Read more about this topic: Pharmaceutical Benefits Scheme
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