Pricing of Pharmaceutical Benefits Scheme medicine

Detailed information on how prescription medicines are priced under the PBS and RPBS.

New arrangements for s90 community pharmacies and s92 dispensing doctors came into effect on 1 July 2015.

From 1 July 2015, the remuneration arrangements have changed for community pharmacies approved under section 90 and approved pharmacists under section 92 of the National Health Act 1953 (the Act). Read more about the changes.

The Australian Government's Pharmaceutical Benefits Scheme (PBS) and Repatriation Pharmaceutical Benefits Scheme (RPBS) make a large range of prescription medicine more affordable for Australians and eligible overseas visitors.

The PBS is established under the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960. Pricing and reimbursement calculations come from Part VII of the Act.

We administer the PBS on behalf of the Australian Government. We process pharmacists' claims and reimburse them for the medicines they supply. We also protect the PBS by preventing and detecting incorrect and inappropriate use of the program.

PBS-dispensed price

When a pharmacist supplies a medicine that attracts an Australian Government benefit, the pharmacist is paid the PBS-dispensed price of the medicine, less any patient contribution.

The PBS-dispensed price consists of:

The Pharmaceutical Benefits Remuneration Tribunal implements agreements between the Minister for Health and the Pharmacy Guild of Australia, as to how the PBS dispensed price is to be established, under section 98BAA of the Act.

The Tribunal's method of calculating the PBS-dispensed price only applies to PBS medicines supplied by pharmacists to patients.

The method for calculating the dispensed price for medicines supplied by approved medical practitioners, approved hospital authorities and for emergency drug (prescriber bag) items is determined by the Minister under section 98C(1)(a) and 99(4) of the Act and Regulation 18 of the National Health (Pharmaceutical Benefits) Regulations 1960, respectively. These are usually in line with pharmacists' pricing.

Pricing of RPBS benefits is governed by an instrument made by the Repatriation Commission, under section 91 of the Veterans' Entitlements Act 1986. These are usually priced in line with PBS pricing.

The PBS pricing structure does not apply to medicine prices that are less than the general patient contribution. There are pricing rules for these medicines so they can be counted towards a patient's PBS Safety Net, under section 99 (2A) of the Act.

Funding for Highly Specialised Drugs

The Australian Government provides funding for certain specialised medicines under the Highly Specialised Drugs (HSD) program. These medicines are listed in Section 2 of the Schedule of Pharmaceutical Benefits (the Schedule) - section 100 items. HSDs are subject to different mark-ups from other medicines.

Read more about Highly Specialised Drugs.

Efficient funding of chemotherapy drugs

The revised arrangements for the efficient funding of chemotherapy drugs were implemented on 1 December 2011 under section 100 of the Act.

All relevant forms and strengths of infusible and injectable chemotherapy medicines are part of the efficient funding of chemotherapy drugs, including medicines previously supplied through:

  • section 85, general part of the Schedule
  • section 100 - Chemotherapy Pharmaceutical Access Program special arrangements, and
  • section 100 - Special Authority Program for Trastuzumab for early breast cancer

These medicines are listed in the Efficient Funding of Chemotherapy - Section 100 Arrangements Supplement. They include new dispensing fees per injection or infusion to recognise the specialist nature of preparing chemotherapy medicines.

Public hospitals participating in pharmaceutical reforms

The public hospital pharmaceutical reforms let participating public hospitals prescribe and supply PBS medicines to outpatients and patients on discharge. Participating public hospital pharmacies are reimbursed differently from approved community pharmacies for the supply of PBS medicines.

Section 94 private hospitals

Private hospitals are approved under section 94 of the Act to supply PBS medicines to patients receiving treatment in or at the hospital. Private hospitals are reimbursed at a different rate from approved community pharmacies for the supply of PBS medicines.

Components of pricing

Cost to the pharmacist

The cost to the pharmacist is made up of the manufacturer's price plus wholesale mark-up. For approved community pharmacies, 1 of 2 levels of wholesale mark-up applies.

Wholesale mark-up

Cost of medicine from manufacturer Value
Up to and including $930.06 7.52%
(Commonwealth price to pharmacists)
Over $930.06 $69.94

The level of wholesale mark-up is determined by the cost of the medicine from the manufacturer.

Wholesalers may charge a different amount from the cost to the pharmacist.

Section 94 private hospitals and public hospitals participating in pharmaceutical reforms will have a flat 11.1% wholesale mark-up on medicines.

AHI fee

As part of the 6th Community Pharmacy Agreement (6CPA), the remuneration arrangements have changed for:

  • community pharmacies approved under section 90
  • approved pharmacists approved under section 92 of the National Health Act 1953 (the Act)

From 1 July 2015, the AHI fee replaced the former pharmacy mark-up structure.

  Fee for items with an Approved Price to Pharmacist Administration, Handling and Infrastructure Fee – Value of payment
Tier 1 For a maximum quantity of a listed brand with a price to pharmacists less than $180.00 $3.54 per maximum quantity supplied
Tier 2 For a maximum quantity of a listed brand with a price to pharmacists from $180.00 to $2,089.71 $3.54, plus 3.5% of the amount where the price to pharmacists exceeds $180.00, per maximum quantity supplied
Tier 3 For a maximum quantity of a listed brand with a price to pharmacists more than $2,089.71 $70.92 per maximum quantity supplied

Read more about the AHI fee

Dispensed price for Highly Specialised Drugs

The dispensed price for HSD supplied in approved community pharmacies and section 94 private hospitals includes the normal PBS dispensing fee plus a pharmacy mark-up.

Cost of medicine Mark-up
Up to and including $40.00 10%
Between $40.01 and $100.00 $4.00
Between $100.01 and $1,000.00 4%
Over $1,000.01 $40.00

The dispensed price for HSD supplied in participating public hospitals excludes a pharmacy mark-up. The patient contribution, including premiums, is the same as other medicines.

Efficient funding of chemotherapy drugs

The revised arrangements for the efficient funding of chemotherapy drugs aim to achieve greater efficiency in the cost of chemotherapy medicines used to treat cancer and administered by injection or infusion.

Reimbursement to pharmacies for the supply of an infusion is based on the cheapest combination of vials. An algorithm has been built into pharmacy dispensing software and our processing system to work out the cheapest combination.

Under the efficient funding of chemotherapy drugs, 'pack' size and price will be 'vial' size and price.

The algorithm calculates the price of each individual vial (base price + mark-up) so the prices can be used to determine the cheapest combination for the quantity and dose prescribed.

The pharmacy mark-up applied is the same as other PBS medicines:

  • approved community pharmacies - 3 level mark-up
  • public hospitals participating in pharmaceutical reforms - none
  • private hospitals - 1.4%
  • PBS Trastuzumab - 4 level mark-up, similar to HSD

The dispensed price of PBS medicines supplied under the efficient funding of chemotherapy drugs includes:

  • the cost to the pharmacist
  • applicable AHI fee
  • applicable fees

Other applicable pharmacy applied fees include:

  • PBS Safety Net recording fee
  • allowable extra fee

Wastage and dangerous drug and container fees are not applicable.

The standard PBS patient contributions apply including brand price premiums, therapeutic group premiums and special patient contributions.

For Department of Veterans' Affairs patients, brand price premiums and therapeutic group premiums are payable by the patient. Special patient contributions are not payable by the patient.

Patient contributions are only payable on original prescriptions and not on repeats. Brand price premiums, therapeutic group premiums and special patient contributions are payable on repeats.

Public hospitals participating in pharmaceutical reforms

The dispensed price for participating public hospitals includes:

  • the cost to the pharmacist (the manufacturer's price + 11.1% mark-up)
  • extemporaneously prepared containers, if appropriate

Other applicable pharmacy applied fees include:

  • PBS Safety Net recording fee

AHI and dispensing, dangerous drug, wastage and ready prepared container fees do not apply.

The standard PBS patient contributions apply, including brand price premiums, therapeutic group premiums and special patient contributions.

Department of Veterans' Affairs patients are included in the pharmaceutical reforms and the same rules apply to RPBS benefits.

For more information, see Section 1 of the Explanatory Notes on the PBS website.

Section 94 private hospitals

The dispensed price of PBS medicines supplied under section 85 of the Act by a section 94 private hospital, including PBS medicines supplied to Department of Veterans' Affairs patients includes:

  • the cost to the pharmacist (manufacturer's price + a flat wholesale 11.1% mark-up)
  • a flat 1.4% pharmacy mark-up
  • the relevant dispensing fee
  • a dangerous drug fee, wastage and container fee, if appropriate

Other applicable pharmacy applied fees include:

  • PBS Safety Net recording fee

The standard PBS patient contributions apply including brand price premiums, therapeutic group premiums and special patient contributions.

For Department of Veterans' Affairs patients, brand price premiums and therapeutic group premiums are payable by the patient. Special patient contributions are not payable by the patient.

Fees

Dispensing fees

The dispensing fees are determined by the Tribunal following an investigation of relevant information.

Ready prepared

The ready prepared fee is $7.02.

The ready prepared dispensing fee is for a PBS medicine that does not need further preparation or compounding. This fee is a compulsory addition to the AHI fee component, regardless of the cost of the medicine.

Only one fee is paid for each prescription, regardless of quantity. The ready prepared fee does not change when multiple quantities are ordered, for example, Regulation 24, authority prescriptions for increased quantities or when quantities less than the PBS maximum quantity are ordered.

For more information, see Section 3 of the Explanatory Notes on the PBS website.

Extemporaneously prepared

The extemporaneously prepared fee is $9.06.

The extemporaneously prepared fee is paid for supplying the following PBS medicines:

  • reconstituted items listed in Section 2 of the Schedule, for example, powder for oral liquid
    • where reconstitution requires a solvent, the fee includes the price of 100 mL purified water from the drug tariff, and
    • a fee is paid for each multiple quantity ordered, for example, Regulation 24 or authority prescriptions for increased quantities
  • extemporaneously prepared PBS medicine, for example, mixtures, creams and ointments
    • only one fee is paid - the extemporaneously prepared fee does not change when quantities more or less than the PBS maximum quantities are ordered. An extemporaneously prepared medicine is only a PBS medicine if prepared from ingredients or formulae listed in Section 4 of the Schedule

For more information see Section 4 of the Explanatory Notes on the PBS website.

Dangerous drug fee

The dangerous drug fee is $2.95.

The dangerous drug fee is paid for supplying a Schedule 8 medicine and is in addition to the AHI and dispensing fee. This fee is designed to cover extra costs such as:

  • handling fees charged by wholesalers for dangerous medicines, and
  • supplying and recording duties associated with dangerous medicines

Only one fee is paid each prescription, even for multiple quantities, for example, Regulation 24 or authority prescriptions. A dangerous drug fee is not payable for extemporaneous prescriptions with a dangerous ingredient as this has already been factored into the recovery price of the ingredients.

For more information, see Section 3 of the Explanatory Notes on the PBS website.

Fees for the efficient funding of chemotherapy drugs

The efficient funding of chemotherapy drugs includes new dispensing fees to recognise the specialist nature of preparing chemotherapy medicines.

Applicable fees for all drugs except trastuzumab

Fee Section 90 community pharmacy including section 92 approved practitioners Section 94 approved public hospital authority Section 94 approved private hospital authority
Distribution fee $25.92 Yes No Yes
Diluent fee $5.14 Yes No Yes
Preparation fee $83.22 Yes Yes Yes
Ready prepared dispensing fee $7.02 Yes No Yes

Applicable fees for trastuzumab where prescribed for HER2-positive early breast cancer

Trastuzumab used for late-stage breast cancer and subsidised outside the PBS is not affected by the efficient funding of chemotherapy drugs.

Fee Section 90 community pharmacy
including section 92 approved practitioners
All public hospitals Section 94 approved private hospital authority
Distribution fee $25.92 Yes No No
Diluent fee $5.14 Yes No Yes
Preparation fee $83.22 Yes Yes Yes
Ready prepared dispensing fee $7.02 Yes No Yes

Patient contributions

The patient contribution for general patients is a maximum of $38.30. For concession patients, the patient contribution is $6.20. These amounts are indexed annually following the Consumer Price Index.

Patient contributions are only payable on original prescriptions for infusible chemotherapy medicines supplied under the revised arrangements for the Efficient Funding of Chemotherapy Drugs.

For more information, Section 1 of the Explanatory Notes on the PBS website.

PBS Safety Net

The PBS Safety Net helps individuals and families who need a lot of medicines in a calendar year.

Once a pensioner or concession family spends $372.00 (60 prescriptions x $6.20) on medicines in 2016, they are issued with a PBS Safety Net card that lets them receive their medicines free of charge for the rest of the year.

Once a general patient or family spends $1,475.70 on medicines in 2016, they are issued with a PBS Safety Net card that lets them pay $6.20 per prescription for the rest of the year.

The thresholds do not include brand price premium, therapeutic group premium charges or special patient contributions. Patients will still need to pay these costs once they have a PBS Safety Net card.

Patients need to keep a record of their PBS medicine costs on a Prescription Record Form. The patient's Medicare card number must be recorded on their Prescription Record Form before a PBS Safety Net card can be issued. The Centrelink Customer Reference Number or Department of Veterans' Affairs number must also be recorded before a PBS Safety Net card can be given to a pensioner or concession family.

Prescriptions for some PBS medicines are not eligible for benefits if resupplied within 20 days of a previous supply of the medicine, for the same person under the PBS or RPBS. This is known as the Safety Net 20-day rule.

PBS Safety Net recording fee - additional fee for agreed price benefits

The ready prepared PBS Safety Net recording fee is up to $1.19. The extemporaneously prepared PBS Safety Net recording fee is up to $1.55.

The PBS Safety Net recording fee is paid for recording prescriptions below the maximum general patient contribution on the Prescription Record Form.

Any medicine in the Schedule with a dispensed price less than the general patient contribution is regarded as a PBS medicine for the purpose of being recorded on the Prescription Record Form for general patients only. In effect, the patient is paying the full cost of the medicine.

A pharmacist can charge a patient the PBS Safety Net recording fee, but it is not compulsory. Any fee charged should be added (up to the maximum PBS Safety Net recordable value for each item, as listed in the Schedule) to the PBS-dispensed price for the Prescription Record Form.

The PBS Safety Net recording fee can be a part charge to take the cost up to $38.30, where the full fee would have taken the cost of the item over $38.30. Only 1 PBS Safety Net recording fee is paid for each prescription, even if there are multiple quantities, for example, Regulation 24 or authority prescriptions.

This fee does not apply to:

  • concession cardholders
  • Department of Veterans' Affairs patients
  • general patients where the dispensed price is more than $38.30

For more information, see Section 3 of the Explanatory Notes on the PBS website.

Allowable extra fee

The allowable extra fee is up to $4.33.

This fee applies where the dispensed price, including the PBS Safety Net recording fee if applicable is below the general patient contribution. It is added to the dispensed price and is paid by the patient. The fee was agreed between the Pharmacy Guild of Australia and the Australian Government. It was introduced to make sure medicines priced below the patient contribution are still recorded on a Prescription Record Form.

The allowable extra fee is optional. It can only be added to general patients' prescriptions and cannot be entered on a Prescription Record Form as part of the cost of the medicine.

The maximum amount that may be charged to a general patient is $38.30. The allowable extra fee can't be charged if the total cost of the medicine, including the PBS Safety Net recording fee and the allowable extra fee is over $38.30. This fee can be a part charge to take the cost up to $38.30.

If the cost of a medicine to a general patient is less than $38.30, the PBS Safety Net recording fee is added first to bring the charge up to $38.30. If the cost is still less than $38.30, the allowable extra fee is then added to bring the charge up to a maximum of $38.30.

Brand price premium

The brand price premium is a compulsory charge. Substitution of a less expensive brand for a brand name medicine may occur if:

  • the less expensive brand is marked as bioequivalent in the Schedule, and
  • the patient requests or agrees to the substitution and it has been allowed by the prescriber

The price difference on a more expensive brand is payable by the patient.

If a prescription is written generically or for the lowest priced brand, and the lowest priced brand is supplied, the brand price premium should not be charged. If a higher priced brand is supplied, the applicable brand price premium must be charged.

The brand price premium does not count towards the patient's PBS Safety Net threshold and cannot be entered on the Prescription Record Form.

If a prescription with a brand price premium has multiple quantities, for example, authority prescription or Regulation 24 the charge is multiplied by the number of maximum quantities supplied.

If a prescription is for a broken quantity, the wastage factor table is used to determine the relevant brand price premium. If the quantity is less than the PBS maximum quantity but is not a broken pack, the brand price premium is reduced by the multiple, for example, when half the PBS maximum quantity is prescribed, the brand price premium is halved.

Brand price premiums are listed in Section 2 of the Schedule under the heading 'Premium' and are identified with a leading 'B'. This charge does not apply to:

  • Prescriber Bag (Emergency Drug Supply)
  • medicines listed only in the RPBS Schedule
  • unlisted RPBS benefits, prior approval medicine not listed in either the PBS or RPBS Schedules

For more information, see Section 1 of the Explanatory Notes on the PBS website.

Therapeutic group premium

The therapeutic group premium is a compulsory charge.

The therapeutic grouping policy applies in defined therapeutic subgroups where the identified medicine provides similar safety and health outcomes. The Australian Government pays up to the price of the lowest priced medicine in each subgroup, less any patient contribution.

Substitution of a medicine for a different, more expensive medicine in the same therapeutic group is not permitted. The price difference for more expensive therapeutic group medicine is payable by the patient. The therapeutic group premium amount does not count towards the patient's PBS Safety Net threshold and cannot be recorded on the Prescription Record Form.

If a prescription with a therapeutic group premium has multiple quantities, for example, authority prescription or Regulation 24, the charge is multiplied by the number of PBS maximum quantities supplied.

If a prescription is for a broken quantity, the wastage factor table is used to determine the relevant therapeutic group premium. If the quantity is less than the PBS maximum quantity but is not a broken pack, the therapeutic group premium is reduced by the multiple, for example, when half the PBS maximum quantity is prescribed, the therapeutic group premium is halved.

A medicine can attract a therapeutic group premium and a brand price premium.

Prescribers can apply for an authority prescription from us to get exemption from the therapeutic group premium on clinical grounds. The phone approval number issued by us starts with 'TPX'. Alternatively, a stamp with 'TPX approved' will be on the authority prescription.

Therapeutic group premiums are listed in Section 2 of the Schedule under the heading 'Premium' and are identified with a leading 'T'. This charge does not apply to:

  • Prescriber Bag (Emergency Drug Supply)
  • unlisted RPBS benefits, prior approval medicine not listed in either the PBS or RPBS Schedules

For more information, see Section 1 and Section 2 of the Explanatory Notes on the PBS website.

Special patient contribution

The special patient contribution is a compulsory charge.

For some expensive medicines, the Australian Government and the manufacturer cannot agree on an acceptable price, so the Australian Government makes a part contribution to the manufacturer's price. In these cases, the patient pays the normal contribution plus the difference between the contribution and the actual cost of the supplied medicine. This difference is the special patient contribution.

Prescribers can apply for an authority prescription from us to get exemption from the special patient contribution on clinical grounds. The phone approval number issued by us starts with 'SPX'. Alternatively, a stamp with 'SPX approved' will be on the authority prescription.

The special patient contribution amount does not count towards the patient's PBS Safety Net threshold and cannot be entered on the Prescription Record Form.

Medicines that attract a special patient contribution and those granted exemption from the special patient contribution are priced the same way as therapeutic group premium medicines and exemptions.

The special patient contribution does not apply to RPBS prescriptions - patients only pay the normal contribution and Department of Veterans’ Affairs pays the rest.

For more information, see Section 1 and Section 2 of the Explanatory Notes on the PBS website.

Authority prescriptions

All authority required medicines and requests for increases to the listed maximum quantity, or maximum repeats for PBS medicines, need prior approval. Authority required (streamlined) medicines do not need prior approval, except if increases in the listed maximum quantity or maximum repeats are needed.

When the quantity of a medicine is more than the PBS maximum quantity, the relevant AHI fee applies to the increased quantity. However, only one of each of the following fees can be applied if applicable:

  • dispensing fee
  • dangerous drug fee
  • PBS Safety Net recording fee
  • allowable extra fee

Only one entry is made on the PBS Safety Net Prescription Record Form. General patients pay a maximum of $38.30 and concession patients pay $6.20, plus brand price premium, therapeutic group premium and special patient contribution charges, if applicable. Multiple quantities attract multiple brand price premium and therapeutic group premium charges.

For more information, see Section 1 of the Explanatory Notes on the PBS website.

Regulation 24 - repeats supplied at the same time as the original prescription

Regulation 24 applies when a prescriber, under certain conditions, asks for all repeats to be supplied at the same time as the original prescription. Since the total prescription is supplied as a single medicine, only one of each of the following fees can be applied:

  • dispensing fee
  • dangerous drug fee
  • PBS Safety Net recording fee
  • allowable extra fee

Although only one set of fees is applicable, it isn't much cheaper for the patient. They must pay multiple patient contributions - up to $38.30 or $6.20 for each supply. Multiple quantities attract multiple brand price premium, therapeutic group premium and special patient contribution charges. The amount recorded on the PBS Safety Net Prescription Record Form should reflect the total quantity supplied, including the original and repeats.

Unlike ready prepared medicines, the extemporaneous plus water dispensing fee is applicable for each maximum quantity supplied.

PBS and RPBS differences

Differences between the PBS and RPBS include:

  • the RPBS has extra medicines not listed on the PBS, and
  • holders of the following cards do not pay the special patient contribution
    • Repatriation Pharmaceutical Benefits card, orange card
    • Repatriation health card for all conditions, gold card
    • Repatriation health card for specific conditions with prescriptions marked as RPBS, white card

RPBS prior approval arrangements can provide access to some medicines not listed in either the PBS or RPBS Schedules. The price of the medicine is the cost to the pharmacist plus the appropriate AHI fee and the PBS dispensing fee. Where the price to pharmacist is greater than $100.00, a copy of the invoice must be submitted with the prescription for payment, including repeat prescriptions.

For more information, see the RPBS Explanatory Notes on the PBS website.

Prescriber Bag (Emergency Drug Supply)

The Australian Government contribution for Prescriber Bag (Emergency Drug Supply) is the same as ready prepared prescriptions.

Emergency drugs are supplied at no charge to the prescriber. Pharmacists are reimbursed the full PBS amount.

There is no charge if the prescriber requests a more expensive medicine or brand. Pharmacists are paid for the medicine or brand supplied. Dangerous drug fees are added if applicable.

In some states and territories, a prescriber can't write a dangerous drug on a prescription with any other medicine. This does not apply to the Prescriber Bag Supply order form.

For more information, see Section 1 of the Explanatory Notes on the PBS website.

Extemporaneous pricing

Extemporaneously prepared formulae

An extemporaneously prepared formula is a PBS medicine compounded by a pharmacist from basic ingredients. All the allowable ingredient prices are listed in Section 4 of the Schedule - Drug Tariff. If a formula has an ingredient not listed, that formula is not a PBS medicine. Some ingredients have specific uses or additional directions (for example, 'use as additive only'). If these are not followed, the formula is not a PBS medicine.

Standard formulae

Section 4 of the Schedule lists common formulae, and their codes, prices and references. Container rates are included in these prices and are also listed in Section 4 of the Schedule - Container Prices. Container rates are the same for every state and territory.

Normally, if a standard formula is altered in any way, the code reverts to the 3-character code given in Section 4 of the Schedule - Table of Codes, Maximum Quantities and Number of Repeats for Extemporaneously Prepared Pharmaceutical Benefits. If a single ingredient is added, or one of the standard ingredients is increased, reverting to the 3-character code may reduce the recovery price. In this case, the code can be left as is and be paid the same as the standard formula.

Pricing extemporaneously prepared ingredients

All the allowable ingredient prices are listed in Section 4 of the Schedule - Drug Tariff, with prices given for different quantities. The way to price exact quantities is explained in Section 1 of the Schedule - Explanatory Notes on the PBS website.

A list has been compiled of the average rates payable that apply to extemporaneously-prepared benefits not included in the Standard Formulae List. Read more about the Average rates payable for extemporaneous items.

Average pricing

Each type of preparation, such as a cream or mixture, has an average price. The price is programmed each month into all pharmacy computers and represented by a 3-character code. The maximum quantities and repeats available for each type of preparation are listed in Section 4 of the Schedule - Table of Codes, Maximum Quantities, and Number of Repeats for Extemporaneously Prepared Pharmaceutical Benefits.

For example, in July 2016, the standard price for:

  • 100 g cream, 13Q, is $13.71
  • 200 mL mixture (other than a mixture containing codeine phosphate), 40D, is $22.01

If these codes are used, every type of extemporaneous prescription, for example, creams and mixtures supplied in a month will be the same price, regardless of the ingredients supplied.

Some preparations have a zero price, which means the extemporaneous preparation type does not have any related standard formulae to calculate an average price. Prescriptions submitted for payment for these average rate codes must include a price.

Self pricing

An approved pharmacy can choose to price their extemporaneous prescriptions differently, instead of accepting the average price. If they do, they must let us know and the prices must be applied for at least 3 months. Every type of extemporaneous prescription must be priced, not selected prescriptions. This does not apply to standard formulae already priced in Section 4 of the Schedule.

The quantities and costs of all the ingredients, plus the relevant dispensing fee and container price, must be listed on the back of the prescription or the repeat form for us to check.

Exceptional extemporaneous prescriptions

If a pharmacy chooses to be paid the average price, there may be times where the total cost of ingredients is well above average. If the value of the ingredients is at least double the value of the average preparation, the pharmacist can be paid for the extra cost.

The prescription must be entered into the computer as a priced prescription showing the full cost so that we can pay the extra amount. The ingredients, costs and all fees must be written on the back of the prescription or repeat form for us to check.

Individual extemporaneous preparation prices submitted to us for claiming purposes must not include allowable extra fees.

Container prices for extemporaneously prepared prescriptions

If a prescriber asks for a particular quantity, then the container of that size, or the next larger in the case of a non-standard size is used.

If a quantity larger than the PBS maximum quantity is supplied, for example, Regulation 24 or authority prescriptions, payment is made for the minimum number of containers needed.

For example, 100 g cream repeat 1 Regulation 24 - only 1 x 200 g screw cap jar, instead of 2 x 100 g jars would be reimbursed.

Dangerous drug fee

There is no dangerous drug fee for extemporaneous prescriptions, because it has already been included in the recovery price of the ingredients.

Brand price premium, therapeutic group premium and special patient contribution charges

None of these charges apply to extemporaneous prescriptions. As manufacturers do not supply this medicine in ready prepared form, the Australian Government does not control the price paid by pharmacists for ingredients. It is the pharmacist's responsibility to check that the price they pay to the wholesaler for extemporaneous ingredients is close to Australian Government reimbursements.

PBS Safety Net recording fee

The additional PBS Safety Net recording fee is paid for the extra work involved in recording medicines on the PBS Safety Net Prescription Record Form and can only be added to general patients' prescriptions. It is not a compulsory charge.

This fee is paid by the patient and cannot be included as part of any extemporaneously prepared priced prescription claimed from us.

Allowable extra fee

The allowable extra fee is optional and must not be more than $4.33. It can only be added to general patients' prescriptions and cannot be entered on the PBS Safety Net Prescription Record Form.

The fee is paid by the patient and cannot be included as a part of any extemporaneously prepared priced prescription claimed from us.

PBS quantities - where a pack cannot be broken

Where a medicine's maximum quantity has been specially determined to correspond to the manufacturer's pack, the manufacturer's standard pack should be prescribed and supplied, even if the prescriber asks for a lesser quantity. For example, a prescription might be for 50 Anginine Stabilised® tablets, where 100 tablets, 1 unopened bottle should be supplied. The minimum quantity that can be supplied is 1. Therefore, if a PBS medicine is listed with a specific quantity, for example, 500 mL, then the minimum quantity that can be dispensed is 1 pack, 50 mL is a quantity of 1. If a prescriber asks for less than this, for example, 20 mL, it is not a PBS medicine. For example, 20 mL of Zofran Syrup® mixture is less than 1 quantity.

Where the maximum quantity of a medicine does not match the quantity contained in the manufacturer's pack, there is a corresponding entry in Section 3 of the Schedule, Standard Packs and Prices or Ready Prepared Pharmaceutical Benefits that shows the applicable price of the manufacturer's pack.

Fractions are not allowed under the PBS. For example, a prescription for Zofran Syrup® oral liquid, 75 mL would be a private prescription. This could be changed to a PBS prescription with approval from the prescriber and after endorsing the prescription with the PBS quantity, in this case, either 50 mL or 100 mL.

PBS quantities - where a pack can be broken

If a prescription is for a quantity less than the manufacturer's pack, the wastage factor is worked out from the quantity in the manufacturer's pack, not from the maximum quantity allowed on the PBS.

The quantity may consist of a full manufacturer's pack plus a broken pack, for example, Rivotril® 500 mcg x 150. In this example, 100 tablets are paid from the price in Section 3 of the Schedule and the wastage factor applies to the 50 tablets.

Container prices on prepared items

The container price only applies to quantities less than the manufacturer's pack. For example, it applies to Serepax® 30 mg tablets x 10, but not to 1 month of Nordette 28®, the price is listed in Section 3 of the Schedule. It is not payable on quantities over the manufacturer's pack, for example, Rivotril® 500 mcg x 150 tablets.

Wastage factor table

This table is used to calculate the price of a prescription when the quantity is less than the manufacturer's pack. It compensates for the rest of the broken pack that is not used before expiry and is therefore wasted.

Example using wastage factor table

Prescription for 50 Teril® tablets 200 mg.

This is 25% of the manufacturer's pack (200 tablets). Find 25 from Row A and look below to Row B. From Row B, you can see the price paid, the wastage factor would be 38% of the value of the manufacturer's pack of 200.

Row A - Manufacacturer's pack
200 tablets
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Row B - Wastage factor
% of price paid
10 18 26 32 38 44 50 54 58 62 66 70 74 78 82 86 90 94 98 100

Brand price premium, therapeutic group premium and special patient contribution - broken packs

The wastage factor table is applied to brand price premiums, therapeutic group premiums and special patient contributions if a broken pack is involved. These charges form part of the overall cost of the medicine, so pharmacists are paid according to the wastage factor table.

The brand price premium, therapeutic group premium and special patient contribution are all mandatory charges to the patient. Failure to apply these charges is a breach of the Act.

Acknowledgement

We acknowledge the Pharmaceutical Society of Australia, Queensland Branch. In particular Mr Peter Mayne, for their work in developing the original training manual, which this information is based on.

Contact us

If you have any enquiries, contact us at PBS general enquiries.

Page last updated: 1 July 2016

This information was printed Sunday 28 August 2016 from humanservices.gov.au/health-professionals/enablers/pricing-pharmaceutical-benefits-scheme-medicine It may not include all of the relevant information on this topic. Please consider any relevant site notices at humanservices.gov.au/siteinformation when using this material.