Price of medicines to rise for pensioners but fall for others

The poorest Australians will be paying more for subsidised medicines from January 1, while wealthy retirees and general patients get a massive price cut.

Australia’s lowest income earners are facing a 50 cent hike in prescription charges, while wealthier patients will save $12.50 on the cost of their medicines.

The patient charge for Pharmaceutical Benefits Scheme (PBS) medicines will from today (from January 1) rise 7.3 per cent from the currently-capped amount of $6.80 to $7.30 for pensioners and concession card holders.

The annual PBS price rise is determined by the Consumer Price Index, a measure of inflation.

High inflation in 2022 means the 2023 increase is the biggest medicine price rise in five years — and two to five times greater than previous years.

“It makes the situation worse or for pensioners who are already trying to cope with other cost of living increases due to the high inflation rate,” Combined Pensioners and Superannuants Association (CPSA) policy manager Paul Versteege said.

“CPSA is calling for the government to seriously address cost of living issues for people on really low incomes. That includes people on the full rate age pension and other pensions, as well as job seeker.”

Felicity McNeil, a former health department executive now head of health lobby group Better Access Australia, has been calling on the government to freeze the indexation of PBS charges on older Australians.

“On 1 January the Albanese Government will put the price of every medicine up by 50 cents for Australia’s concession card holders. At a time of unprecedented cost of living pressures for the community, Government pocketing an extra $75 million by charging additional fees to those least able to afford their medicines is just wrong,” she said.

“With the average concession card holder using 17 scripts a year, most people will not get any relief from these cost pressures as the concessional safety net doesn’t kick in until 36 scripts.”

Combined Pensioners and Superannuants Association policy manager Paul Versteege. Picture supplied.

At the same time as low income earners pay more, wealthier general patients and retirees will see their prescription costs slashed.

The maximum price of PBS scripts for general patients will fall by $12.50 from $42.50 to $30 as the federal government moves to honour an election promise to make medicines more affordable.

It is the first time in 75 years the patient charge for medicines, under the national drug subsidy scheme, has fallen.

“This could save someone taking one medication a month $150 every year,” a spokesperson for the minister said.

However, the price cut will benefit only a tiny minority of patients using the medicines subsidy scheme because two thirds of the drugs dispensed under the scheme go to pensioners and concession card holders,

Another reason the benefits will be limited is that the most commonly used drugs are off patent and cost well under the new $30 co-payment.

The most commonly used medicines won’t fall in price. Picture istock

Earlier in 2022 News Corp checked the price of the 50 most-prescribed medicines and found just six of them – antidepressant Escitalopram, blood thinners Apixaban and Rivaroxaban, asthma medicines Fluticasone propionate/Salmeterol and Budesonide/formoterol and pain medication Oxycodone/Naloxone – would get cheaper.

The price of the other 44 most commonly prescribed medicines will not be cheaper, with most already costing $19-$23 at a suburban pharmacy and as little as $5.99 at discount chemists.

Another financially well-off group will also benefit from PBS rule changes.

The income threshold for access to a Commonwealth Seniors Health Card has been increased to $90,000 for singles and $144,000 for couples, meaning an additional 44,000 Australians qualify.

Health Minister Mark Butler said “the Government is ensuring that all Australians have access to affordable medicines and healthcare”.

The safety net threshold for pensioners and concession card holders was slashed in July by 25 per cent, meaning across the year millions of Australians will now pay no more than $5.05 every week for all of their medicines needs.

Price hike fails to stop medicines shortage

Australia’s stingiest health funds revealed