Medicines in the health system

Web article

Last updated: 09 Jul 2026

Topic: Medicines

AIHW (Australian Institute of Health and Welfare) (2026) Medicines in the health system, AIHW, Australian Government, accessed 9 July 2026.

Medicines can contribute to the quality of life of Australians by curing or relieving the symptoms of illness. They can also prevent complications in existing health conditions or delay the onset of disease.

The Australian Government Department of Health, Disability and Ageing implements Australia’s National Medicines Policy in partnership with state and territory governments, medicines industry, healthcare professionals and consumers. The objectives of the policy are:

timely access to the medicines that Australians need, at a cost that individuals and the community can afford
medicines meeting appropriate standards of quality, safety and efficacy
quality use of medicines
maintaining a responsible and viable medicines industry.

How are medicines regulated?

The Therapeutic Goods Administration (TGA) plays a key role in the implementation of the National Medicines Policy by maintaining the Australian Register of Therapeutic Goods (ARTG). Therapeutic goods must be entered in the ARTG before they can be lawfully supplied in, imported into, or exported from Australia, unless exempt. Medicines, including prescription, over-the-counter (OTC) and complementary medicines, are defined as therapeutic goods and hence must be included in the ARTG.

What is the PBS and the RPBS?

The Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS) are Australian Government health programs that help people afford prescription medicines. Under these schemes, the government subsidises the cost of many medicines used to treat a wide range of health conditions.

The PBS, which began in 1948, is available to people who hold a current Medicare card as well as some overseas visitors from countries with Reciprocal Health Care Agreements with Australia. As at 30 June 2025, the Schedule of Pharmaceutical Benefits listed 949 medicines across 5,164 brands (Department of Health, Disability and Ageing 2025a).

The RPBS is available to eligible Department of Veterans’ Affairs (DVA) Health Card holders, including veterans, war widows and widowers, and their dependants. This program covers all medicines available under the PBS and also subsidises additional medicines and items, such as wound dressings, that are specifically needed by eligible veterans and their families.

What is the ‘safety net’?

The PBS Safety Net helps reduce the cost of medicines for people and families who spend a lot on PBS-subsidised medicines in a calendar year. Once a patient or their family reaches a set amount of out-of-pocket spending on PBS medicines in a given calendar year, they pay less for PBS medicines for the rest of that year. This set amount is called the PBS Safety Net threshold.

For general patients in 2025, the safety net threshold was $1,694.00. Until this amount was reached, medicines cost up to $31.60 each. After reaching this threshold, the cost of each PBS medicine reduced to the concessional co-payment amount of up to $7.70.
For concessional patients, the safety net threshold in 2025 was $277.20. Medicines cost up to $7.70 each until the threshold was reached. After this point, PBS medicines were provided at no cost for the remainder of the year.

For more information on the current and historical safety nets, see the PBS.

What is the ‘co-payment’?

Under the PBS and the RPBS, the Australian Government sets a maximum ‘co-payment’ amount, which is the amount a patient pays towards the cost of a PBS-subsidised medicine. When the price of a medicine is higher than the co-payment amount, the Australian government subsidises the remaining cost by paying pharmacies the difference between the patient’s co-payment amount and the PBS price of a medicine, as listed on the Schedule of Pharmaceutical Benefits.

Some prescriptions are priced below the co-payment amount for a patient, so the patient pays the full cost, and the government does not contribute. These prescriptions are referred to as ‘under co-payment’ prescriptions. Prescriptions priced above the maximum co-payment amount are known as ‘above co-payment’ prescriptions and attract a subsidy from the Australian Government.

The maximum co-payment amount a patient pays depends on their level of entitlement. This is determined by whether the patient is a general or concessional patient and whether they have reached the PBS Safety Net threshold. As at 1 January 2025, the general patient co-payment was $31.60 while the concessional patient co-payment was $7.70. These co-payments did not change from those set on 1 January 2024. From 1 January 2026, the general patient co‑payment was reduced to $25.00, with the aim of making medicines more affordable and helping Australians manage cost‑of‑living pressures (Department of Health, Disability and Ageing 2025b).

The following examples illustrate how co-payments and government subsidies work, using 2025 amounts.

If the total cost of a prescription is $100.00:

- a general patient pays the maximum co-payment of $31.60 and the government pays the remaining $68.40.
- a concessional patient pays a co-payment of $7.70 and the government pays the remaining $92.30.

If the total cost of a prescription is $15.00:

- For a general patient, the cost of the prescription is below the maximum co-payment amount so the patient pays the full $15.00 and the government does not contribute.
- A concessional patient pays the concessional co-payment amount of $7.70, and the government pays the remaining cost.

These examples assume the patient has not reached their PBS Safety Net threshold for the calendar year. They also do not include any additional patient contributions such as brand price premiums or optional fees charged at the discretion of the dispensing pharmacy, which are all paid by the patient.

For more information on the current and historical co-payments, see the PBS.

Medicines in Australia can be obtained in a number of ways including:

through a prescription provided by a general practitioner (GP), medical specialist or other authorised health practitioner
by patients attending hospital outpatient departments
by purchasing medicines over-the-counter from community pharmacies or other retail outlets (such as supermarkets).

There is currently no single, complete data source covering all medicines dispensed in Australia, including over-the-counter. The information presented on this page focuses on medicines supplied under the PBS and RPBS. The data were extracted by the AIHW from the PBS subsidised prescriptions data in the Australian Government Department of Health, Disability and Ageing’s Enterprise Data Warehouse on 31 March 2026. The data presented relate to prescriptions dispensed between July 2019 and June 2025. Information on expenditure for private prescriptions is also included.

To be listed on the PBS, medicines must meet specified criteria including requirements relating to safety, clinical effectiveness and cost effectiveness. Most PBS and RPBS listed medicines are dispensed by pharmacists and are intended for use by patients at home. Some medicines, because of their clinical use or other special features (such as chemotherapy medicines) need medical supervision and are only accessible at specialised medical services, usually hospitals.

PBS and RPBS listed medicines are most commonly dispensed through community pharmacies. They may also be supplied through private hospitals, public hospitals and approved medical practitioners participating in Pharmaceutical Reform Arrangements. These arrangements enable the supply of PBS medicines to patients on discharge from hospital, as well as to non-admitted and day-admitted patients in all jurisdictions except New South Wales and the Australian Capital Territory. Medicines may also be supplied through other arrangements, such as the Remote Area Aboriginal Health Services.

The PBS and RPBS data collection does not contain information on private prescriptions, over-the-counter medicines, off-label prescribing information or on medicines supplied to public hospital in-patients (with some exceptions, see above paragraph).

Spending on prescription medicines

In 2024–25, the total spending on all PBS and RPBS medicines by both the Australian Government and patients was $23.1 billion. This spending was for 335.1 million prescriptions that were dispensed under the PBS and RPBS – a decrease of 1.0% compared with 2023–24.

Patients paid a total of $3.7 billion towards PBS and RPBS prescriptions (for both above and under co-payment prescriptions), which was 16% of the total expenditure on PBS and RPBS medicines in 2024–25. This was an increase of 2.3% in patient spending compared with 2023–24. The Australian Government contributed the remaining 84% ($19.5 billion) of total expenditure in 2024–25.

The Australian Government recorded $19.5 billion in spending on all PBS and RPBS medicines (PBS accounted for 98%) or $716 per person in 2024–25. This was an increase of 7.5% in spending compared with 2023–24. After adjusting for inflation, Australian Government spending increased 0.2% between 2023–24 and 2024–25, which was lower than the average of the annual growth rates between 2019–20 and 2024–25 of 2.2%. This increase in expenditure (compared to changes in previous years) may be due to a variety of factors, including the introduction of 60-day prescriptions in 3 stages between 2023 and 2024 (Department of Health, Disability and Ageing 2025c) and the freeze on the maximum patient co-payment amount from 1 January 2025 (Department of Health, Disability and Ageing 2025d).

For all prescriptions dispensed in 2024–25, 69.5% (232.9 million) were above the co-payment amount, indicating the patient paid the relevant co-payment and the remaining cost was subsidised by the Australian Government (Figure 1). The remaining 30.5% (102.2 million) of medications were under the co-payment amount meaning the patient paid the full cost of the medicine.

Figure 1: PBS and RPBS prescriptions and benefits, 2019–20 to 2024–25

Types of prescribed medicines dispensed

In 2024–25, medicines used to treat cardiovascular conditions were the most commonly dispensed. These medicines accounted for 101.4 million PBS and RPBS prescriptions (30% of all PBS and RPBS prescriptions in 2024–25), and 6.7% of government expenditure (Figure 2). Cardiovascular medicines, including antihypertensives and cholesterol-lowering medicines (including statins; as high cholesterol is considered as a major risk factor), are often prescribed for cardiovascular disease. For more information see Biomedical risk factors.

How are medicines grouped?

Medicines are organised into Anatomical Therapeutic Chemical (ATC) classification groups according to the body system or organ on which they act. For further information on the ATC classification system, see World Health Organization Collaborating Centre for Drug Statistics Methodology.

Also dispensed in high volumes were nervous system medications (23% of all PBS and RPBS prescriptions), which include analgesics (painkillers), antipsychotics and antidepressants. While antineoplastic and immunomodulating agents accounted for only 2.0% of all prescriptions, they had the highest government expenditure (42% of total government expenditure) in 2024–25. These medicines are commonly used to treat cancer and other conditions such as multiple sclerosis, arthritis, dermatological conditions and inflammatory bowel diseases (such as Crohn’s disease and ulcerative colitis).

Figure 2: Number of prescriptions dispensed by Anatomical Therapeutic Chemical ^(a) (ATC) group, 2022–23 to 2024–25

Top 10 prescribed medicines by volume and expenditure

Medicines used to treat cardiovascular conditions account for the highest volume of PBS and RPBS prescriptions compared with other ATC groups between 2019–20 and 2024–25. Consistent with this, the medicines with the most prescriptions over this same period were the cholesterol-lowering medicines rosuvastatin and atorvastatin. After these medicines, pantoprazole and esomeprazole (medicines used to treat gastro-oesophageal reflux and ulcers) had the highest number of prescriptions; these fall under the alimentary tract and metabolism ATC group (Figure 3).

Pembrolizumab (an immunotherapy medicine used in the treatment of various cancers) was the medicine with the highest government expenditure in 2024–25. The fixed dose combination of elexacaftor/tezacaftor/ivacaftor & ivacaftor (used in the treatment of cystic fibrosis) had the second highest government expenditure in 2024–25. In 2023–24, Pembrolizumab was also the medicine with the highest government expenditure.

New medicines are regularly approved for listing on the PBS and existing medicine listings on the PBS can be changed or removed. These changes to medicine listings may have contributed to an increase in government expenditure ($19.5 billion in spending on PBS/RPBS medicines in 2024–25 compared with $18.1 billion in 2023–24, Figure 1) and have resulted in a change in the structure of the top 10 medicines by government expenditure since 2019–20. Biologic medicines account for 4 out of 10 of the most expensive medicines on the PBS in 2024–25 (Figure 3).

What are biologic medicines?

Biologic medicines contain substances that are made by living cells or organisms. They are different from medicines made via chemical process. Chemical medicines are usually available as pills or tablets. Biologic medicines are often administered by an injection at home or an infusion in a hospital or clinic.

Biologic medicines are used to treat diseases such as:

rheumatoid arthritis
inflammatory bowel diseases such as ulcerative colitis and Crohn’s disease
cancer
diabetes
multiple sclerosis
severe chronic plaque psoriasis.

Figure 3: Top ten medicines, by selected measures, 2019–20 to 2024–25

Medicines made available under special arrangements

In addition to medicines available under standard PBS arrangements, some medicines are also available as PBS pharmaceutical benefits through alternative arrangements provided for under section 100 (s100) of the National Health Act 1953. These arrangements allow certain medicines to be supplied more conveniently or efficiently than under standard PBS processes.

Medicines supplied under s100 arrangements may require specialised storage or dispensing, ongoing monitoring by a medical specialist during treatment, or administration in a hospital outpatient setting. Many s100 medicines are also used to treat complex conditions, including chronic conditions and cancer, where they are supplied mostly through hospitals and administered under specialised medical supervision.

Section 100 programs include the following:

Highly Specialised Drugs (HSD)
Efficient Funding of Chemotherapy (EFC)
Botulinum Toxin
Growth Hormone
In Vitro Fertilisation
Opiate Dependence Treatment
Closing the Gap – PBS Co-payment
Paraplegic and Quadriplegic
Medication Program for Homeless People
Remote Area Aboriginal Health Services.

The 2 largest s100 programs are HSD and EFC programs. In 2024–25, these programs accounted for 45% and 47% respectively of Australian Government expenditure for s100 medicines (Department of Health, Disability and Ageing 2025a).

While Australian Government spending on all medicines supplied under standard PBS arrangements has remained relatively stable, spending on s100 programs has been increasing over time. This growth has been driven predominately by the listing of new medicines and new indications (new uses of existing medicines for different conditions) on the PBS. After adjusting for inflation, spending on s100 medicines grew by 9.2% between 2019–20 and 2024–25, which equates to an average annual increase of 1.9%. In contrast, over the same period spending on medicines supplied under standard PBS arrangements increased by 2.3% in total.

Who can prescribe medicines?

Medicines are primarily prescribed by medical practitioners, including general practitioners (GPs) and referred medical specialists. Some other health practitioners such as dentists, optometrists, nurse practitioners and midwives, can also prescribe selected medicines within their scope of practice.

In 2024–25, GPs prescribed the majority of PBS and RPBS medicines – around 85% of all prescriptions dispensed. Table 1 shows the most commonly dispensed medicines by authorised PBS prescriber groups.

Table 1: Most common medicines by prescriptions dispensed, by selected PBS prescriber groups, 2024–25
PBS prescriber groups	Most common medicines	Used to treat
GPs (85% of all prescriptions dispensed in 2024–25)	Rosuvastatin, Atorvastatin; Pantoprazole, Esomeprazole	High cholesterol; Gastro-oesophageal reflux and ulcers
Referred medical specialists (11%)	Methylphenidate; Rosuvastatin	Attention deficit hyperactivity disorder; High cholesterol
Dentists (<1%)	Amoxicillin	Bacterial infections
Optometrists (<1%)	Latanoprost; Hyaluronate sodium	Glaucoma and other eye diseases; Dry eye syndrome
Nurse practitioners (<1%)	Esomeprazole, Pantoprazole; Rosuvastatin, Atorvastatin	Gastro-oesophageal reflux and ulcers; High cholesterol
Endorsed midwives (<1%)	Metoclopramide	Nausea

Note: Some medicines may be used to treat a variety of conditions (indications) and this article refers to just some of the common conditions treatable by these medicines.

Source: Therapeutic Goods Administration, Consumer Medicines Information (CMI) and Product Information (PI) documents for selected medicines.

Who received these medicines?

In 2024–25, PBS prescriptions were dispensed to 18.3 million people in Australia, representing 68% of the population. Dispensing rates increased with age – children aged 0–14 had the lowest rate of dispensed prescriptions (191 prescriptions per 100 people), while people aged 85 and over had the highest rate (5,939 prescriptions per 100 people). Similar age-related patterns were seen for both males and females (Figure 4).

Over half of all PBS and RPBS medicines were dispensed to people aged 65 and over (54%) in 2024–25. Within this age group, people aged 65–74 received the highest number of dispensed prescriptions and accounted for the greatest share of Australian Government expenditure.

After adjusting for differences in the population age structure, the overall rate of dispensed prescriptions decreased slightly between 2019–20 and 2024–25. The age-standardised dispensing rate decreased by 4.1%, from 1,085 to 1,042 prescriptions per 100 people (Figure 1). A similar pattern was observed for above co-payment prescriptions, where age-standardised dispensing rates also decreased by 5%, from 729 to 692 per 100 people.

Over the same period, the age-standardised rate of people dispensed one or more prescriptions remained stable, increasing slightly by 0.3% (from a rate of 67% to 68%). For above co-payment prescriptions only, the age-standardised rate of people who were dispensed at least one prescription increased by 3.6% (from a rate of 36% to 40%).

Between 2019–20 and 2024–25, there was an increase in prescription rates in younger age groups. This change was most apparent in the 0-14 age group, where the prescribing rate increased by 18%. PBS utilisation showed an increase of 1.5 million prescriptions dispensed in the 0–14 group. The driver of the observed increase might be related in part to the utilisation of antiinfectives for systemic use medicines (this class of medicines includes antibacterials, antivirals and vaccines). In 2024–25 among the 0–14 group, 2.1 million prescriptions were for antiinfectives for systemic use medicines, and this represented the most common medicine dispensed (41.0%) for this age group. This is the same as 2019–20, where the most common medicines dispensed among the 0–14 group (43.6%) were also for antiinfectives for systemic use (including antibiotics).

Figure 4: Total prescriptions and government expenditure, by age and sex, 2024–25

Non-PBS/RPBS subsidised medicines

Private prescriptions

Medicines that require a prescription but are not eligible for subsidy under the PBS are known as private prescriptions. Some examples of private prescriptions include medicines that are not listed on the PBS; are prescribed for off-label use; and are provided to patients who are not eligible for PBS.

Private prescriptions expenditure for 2022–23 and 2023–24 was estimated at $1,085.5 million and $1,144.3 million (current prices) respectively, representing an increase of 5% (AIHW 2025).

Over-the-counter (OTC) medicines

People also purchase OTC medicines (for example, for pain management, contraceptives, coughs and colds, allergy and vitamin supplements) from various sources, including pharmacies, supermarkets and online. We do not report on OTC and complementary medicines on this page as data are not accurately captured across all these sources. Data on supermarket, health food outlets and on-line (internet) orders of medicines is also unable to be reliably captured.

Key data gaps

PBS statistics only include prescription medicines that are listed on the Schedule of Pharmaceutical Benefits (PBS Schedule) and have had a claim processed. They do not include:

private prescriptions, off-label prescribing, over-the-counter medicines
medicines supplied to public hospital in-patients (except New South Wales and the Australian Capital Territory)
PBS Opiate Dependence Treatment Program prior to 1 July 2023
any PBS medicines supplied under special arrangements that are not processed through PBS online
information on reasons for prescribing, prescribed dosage, frequency of administration and intended duration
information on how the patient uses the dispensed medicine once the patient has received the medicine.

References Expand

ABS (Australian Bureau of Statistics) (2011) ABS Australian Demographic Statistics, Jun 2011, ABS, Australian Government, accessed 17 March 2026.

ABS (2025) National, state and territory population, Jun 2025, ABS, Australian Government, accessed 17 March 2026.

AIHW (Australian Institute of Health and Welfare) (2025) AIHW Health Expenditure Database [unpublished database], AIHW, Australian Government.

Department of Health, Disability and Ageing (2025a), PBS Expenditure and Prescriptions Report 1 July 2024 to 30 June 2025, Department of Health, Disability and Ageing, Australian Government, accessed 5 January 2026.

Department of Health, Disability and Ageing (2025b) PBS co-payments, Department of Health, Disability and Ageing, Australian Government, accessed 20 January 2026.

Department of Health, Disability and Ageing (2025c) Cheaper medicines, Department of Health, Disability and Ageing, Australian Government, accessed 8 January 2026.

Department of Health, Disability and Ageing (2025d) PBS co-payment freeze, Department of Health, Disability and Ageing, Australian Government, accessed 8 January 2026.

Medicines in the health system