Medicines in the health system is an Australia's health topic

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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 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.

As part of the National Medicines Policy, the Pharmaceutical Benefits Scheme (PBS) is the key mechanism for providing Australians with reliable, timely and affordable access to a wide range of medicines. Under the PBS, the government subsidises the cost of medicines for most medical conditions where medications must meet the criteria for PBS listing, such as clinical and cost effectiveness. Most of the listed medicines are dispensed by pharmacists and used by patients at home. Some medicines, because of their clinical use and other special features, need medical supervision (such as chemotherapy drugs) and are only accessible at specialised medical services, usually hospitals.

Medicines can be obtained in a number of ways including:

  • via a prescription provided by a general practitioner (GP), medical specialist or other health practitioner
  • to admitted patients in hospital
  • purchased over the counter from community pharmacies or other outlets (such as supermarkets).

Presently a complete data source for all medicines dispensed is not available.

The information presented on this page focuses on medicines provided under the PBS and the Repatriation Pharmaceutical Benefits Scheme (RPBS); information on expenditure for non-PBS/RPBS medicines is also included. Typically, PBS and RPBS listed medicines are dispensed through community pharmacies, but are also available through private hospitals, and public hospitals participating in Pharmaceutical Reform Arrangements (enabling the supply of PBS medicines to patients on discharge from hospital, and non-admitted or day-admitted patients in all jurisdictions except New South Wales and the Australian Capital Territory), or through other arrangements such as the Remote Area Aboriginal Health Services.

In 2020–21, 314.8 million prescriptions were dispensed under the PBS and RPBS – an increase of 0.6% on 2019–20.

What is the PBS and the RPBS?

The PBS and the RPBS are Australian Government Health programs that subsidise the cost of a wide range of medicines in Australia. The PBS is available to current Medicare card holders as well as to overseas visitors from countries with Reciprocal Health Care Agreements with Australia and the RPBS is only available for Department of Veterans’ Affairs Health card holders.

The PBS began in 1948 and has expanded over time. As at 30 June 2021, 906 different medicines in 5,380 brands, used to treat a wide range of health conditions, are listed on the Schedule of Pharmaceutical Benefits. The RPBS subsidises pharmaceuticals available under the PBS and additional medicines and items (for example, wound dressings) for eligible veterans, war widows and widowers, and their dependants.

Spending on prescription medicines

In 2020–21, the Australian Government recorded $13.9 billion in spending on all PBS and RPBS medicines (PBS accounting for 98% of the total) or $541 per person. This was an increase of 8.4% in spending compared with 2019–20. After adjusting for inflation, Australian Government spending increased 5.1% between 2019–20 and 2020–21, which was higher than the average yearly growth between 2015–16 and 2020–21 of 2.0%.

For all prescriptions dispensed in 2020–21, 70% were above the co-payment threshold, indicating the patient paid the relevant co-payment and the remaining cost was subsidised by the Australian Government (see Figure 1). The remaining 30% of medications were under the co-payment threshold meaning the patient paid the full cost of the medicine with no government subsidy attracted. 

In total, consumers paid $3.2 billion towards PBS and RPBS prescriptions (for both above and under co-payment prescriptions), which was 19% of the total expenditure on PBS and RPBS medicines in 2020–21. The Australian Government contributed the remaining 81% of total expenditure.

What is the ‘co-payment’?

Under the PBS and the RPBS, the Australian Government sets a maximum ‘co-payment’ amount that people pay towards the cost of their medicines. The Australian Government pays pharmacies the difference between a consumer’s co‑payment and the PBS price of a medicine, as listed on the Schedule of Pharmaceutical Benefits. Some prescriptions are priced below the co-payment threshold for a patient, so the consumer pays the total cost, and the government does not contribute.

Prescriptions priced above the maximum co-payment threshold for a patient are referred to as ‘above co-payment’ prescriptions and attract a subsidy from the Australian Government. Those priced below are referred to as ‘under co-payment’ prescriptions, and do not receive a subsidy.

The maximum co-payment a patient pays depends on their level of entitlement, which is determined by the patient’s concessional status and whether they have qualified for the PBS safety net. Current and historical co‑payments can be found on the PBS website.

 

Figure 1: PBS and RPBS prescriptions and benefits, 2015–16 to 2020–21

This graph displays the total PBS and RPBS prescriptions, as well as government expenditure in current and constant prices for the financial years 2015–16 to 2020–21. It provides the ability to view measures by volume and age-standardised rate for the population. In 2020–21 there were a total of 314.8 million prescriptions supplied to patients.

Types of prescribed medicines dispensed

In 2020–21, medicines used to treat cardiovascular conditions were the most commonly dispensed. These medicines accounted for 103.3 million PBS and RPBS prescriptions (33% of all PBS and RPBS prescriptions in 2020–21), and 8.0% of government expenditure (Figure 2). Cardiovascular medicines include cholesterol-lowering medicines (such as statins), as high cholesterol is considered as a major risk factor for developing cardiovascular disease. See Biomedical risk factors for more information.

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 (see the World Health Organization Collaborating Centre for Drug Statistics Methodology for further information on the ATC classification system).

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 1.7% of all prescriptions, they had the highest government expenditure (41%), and the highest increase in expenditure among ATC groups between 2019–20 and 2020–21. 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, 2018–19 to 2020–21

This chart displays the above co-payment prescriptions, total prescriptions, government expenditure (in current and constant prices) measures for PBS and RPBS prescriptions by ATC group between 2018–19 and 2020–21. The measures can be viewed by volume and age-standardised rate for the population. Cardiovascular system medicines had the highest volume of prescriptions in 2020–21, with a total of 103.3 million prescriptions (with $1.1 billion of Government expenditure). Antineoplastic and immunomodulating agents had the most Government expenditure in 2020–21, at approximately $5.7 billion. Antiparasitic products, insecticides and repellents had both the lowest volume of prescriptions (around 80,000) and expenditure ($3.1 million) in 2020–21.

Top 10 prescribed medicines

As noted, medicines used to treat cardiovascular conditions account for the highest volume of PBS and RPBS prescriptions compared with other ATC groups between 2015–16 and 2020–21. Consistent with this, the medicines with the most prescriptions are the cholesterol-lowering medicines rosuvastatin and atorvastatin. After these medicines, pantoprazole and esomeprazole (medicines used to treat gastro-oesophageal reflux and ulcers) have the highest number of prescriptions; these fall under the alimentary tract and metabolism ATC group.

The top 10 medicines accounting for the most government expenditure have varied over time since 2015–16, mainly because of the listing of new drugs used to treat hepatitis C in March 2016. These medicines experienced an initially high uptake, but their use began to decline from 2018–19, after which aflibercept, a biologic medicine used to treat a number of degenerative eye conditions, became the medicine accounting for the highest government expenditure. Figure 3 shows the top 10 medicines between 2015–16 and 2020–21 by selected measures.

Biologic medicines accounted for 8 out of 10 of the most expensive drugs on the PBS in 2020–21.

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, 2015–16 to 2020–21

This graph displays the top ten PBS and RPBS medicines for the financial years between 2015–16 and 2020–21. Top ten medicines can be selected for the total prescriptions, above co-payment prescriptions, and government expenditure in constant and current prices. Rosuvastatin had the highest volume of prescriptions (14.2 million) in 2020–21, closely followed by Atorvastatin (11.7 million). Both drugs are used to lower cholesterol. After these medicines, Pantoprazole and Esomeprazole had the highest number of prescriptions with 9.3 million and 8.4 million respectively. These drugs are used to treat gastric reflux and ulcers.

Medicines made available under special arrangements

In addition to medicines available under normal PBS arrangements, a number of drugs are also available as PBS pharmaceutical benefits but are distributed under alternative arrangements where these are considered more appropriate. These alternative arrangements are provided for under section 100 (s100) of the National Health Act 1953. Some of these medicines are listed for the treatment of complex conditions (chronic conditions and cancer) where they are supplied mostly through hospitals and administered under specialised medical supervision.  

Section 100 includes the following programs:

  • Highly Specialised Drugs (HSD)
  • Efficient Funding of Chemotherapy (EFC)
  • Botulinum Toxin
  • Growth Hormone
  • In Vitro Fertilisation
  • Opiate Dependence Treatment
  • Remote Area Aboriginal Health Services.

The 2 largest of these programs are HSD and EFC. In 2020­–21, the HSD and EFC programs accounted for 47% and 43% respectively of government expenditure for s100 programs (Department of Health 2021).

While government spending on all medicines available through normal PBS arrangements has remained relatively stable, spending on s100 programs has been increasing predominately due to the listing of new drugs and new indications (new use of existing drugs for different conditions) on the PBS – after adjusting for inflation, it grew by 51% in the years between 2015–16 and 2020–21, which equates to an average annual increase of 7.1%. In contrast, spending on medicines through normal PBS arrangements has increased by 0.4% in total over the same period.

Who can prescribe medicines?

Medicines are primarily prescribed by medical practitioners (GPs and referred medical specialists), however certain other types of health practitioners (dentists, optometrists, nurse practitioners and midwives) can also prescribe selected medicines.  

In 2020–21, GPs prescribed the majority of PBS and RPBS medicines – around 87% of all prescriptions dispensed. Table 1 shows the most commonly dispensed medicines by authorised PBS prescriber groups.

Table 1: Most common medicines by number of prescriptions dispensed, by selected PBS prescriber groups, 2020–21

PBS prescriber groups

Most common medicines

Used to treat

GPs

Rosuvastatin, Atorvastatin;

Pantoprazole, Esomeprazole

High cholesterol;

Gastro-oesophageal reflux and ulcers

Referred medical specialists

Methylphenidate;

Pantoprazole

Attention deficit hyperactivity disorder;

Gastro-oesophageal reflux and ulcers

Dentists

Amoxicillin

Bacterial infections

Optometrists

Latanoprost;

Hyaluronate sodium

Glaucoma and other eye diseases;

Dry eye syndrome

Nurse practitioners

Esomeprazole, Pantoprazole;

Rosuvastatin, Atorvastatin

Gastro-oesophageal reflux and ulcers;

High cholesterol

Midwives

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 2020–21, PBS prescriptions were dispensed to 16.6 million Australians (65% of the population). Population dispensing rates increased with age – young people aged 0–14 had the lowest rates of dispensed prescriptions (145 prescriptions per 100 people aged 0–14), and the highest rates were among those aged 85 and over (5,928 prescriptions per 100 people aged 85 and over). Similar patterns were seen for both males and females (Figure 4).

Over half of PBS and RPBS medicines were dispensed to people aged 65 and over (54%). Within specific age groups, people aged 65–74 had the highest number of dispensed prescriptions and accounted for the highest Australian Government expenditure.

When adjusting for the difference in population age structure, the overall rate of dispensed prescriptions fell by 6.3% between 2015–16 and 2020–21 from 1,132 to 1,061 prescriptions per 100 people (Figure 1). This was particularly the case for above co-payment prescriptions, where age-standardised dispensing rates per 100 people fell by 11% (from 808 to 722 per 100 people). The age-standardised rate of the number of people dispensed one or more prescriptions over the same period also decreased – a fall of 9.3% (from 69 to 63 patients per 100 people). When looking at above co-payment prescriptions only, the age-standardised rate of patients fell by 10.6% (from 37 to 33 per 100 people).      

Between 2015–16 and 2020–21, there was a fall in prescription rates for all age groups. This fall was most apparent in the 0–14 age group, for which the prescribing rate fell by 25%. The driver of the observed decrease might be related in part to the utilisation of some antibiotics. PBS utilisation showed a fall of 1.9 million scripts for this age group, of which 1.7 million scripts were for 6 antibiotics.
 

Figure 4: Total prescriptions and government expenditure, by age and sex, 2020–21

This chart displays the above co-payment prescriptions, total prescriptions, government expenditure measures for PBS and RPBS prescriptions for 2020–21 by age group for females (on the left axis) and males (on the right axis). Patients with unknown demographics are excluded from this visualisation. The measures can be viewed by volume and age-specific rate for the population. In total there were 170.3 million prescriptions supplied to patients aged 65 or over in 2020–21, accounting for $7.2 billion of Government expenditure.

Impact of COVID-19 on prescription medicine use

In response to the COVID-19 pandemic, a number of temporary changes to prescribing and dispensing of PBS medicines were implemented. These changes were aimed at minimising the risk of prescribing doctors, dispensing pharmacists and consumers contracting COVID-19 while ensuring efficient supply of medicines so that consumers could have continued access to their medications.

The pandemic impact on consumer access to prescription medicines was most noticeable in March and April 2020. In March, there was a 23% increase in the number of prescriptions dispensed in 2020 (31.0 million), compared with 2019 (25.2 million) (Figure 5). The high demand for medicines resulted in pharmacies and wholesalers reporting medicine shortages. This change in consumer behaviour was likely due to stockpiling influenced by the introduction of restrictions nationally to contain the spread of COVID-19.

To restrain local shortage in community pharmacies driven by consumer stockpiling, pharmacists have been required to limit dispensing of prescription medicines to prevent unnecessary stockpiling. Consequently, prescription volume decreased by 9% in April 2020 (22.7 million), compared with April 2019 (24.9 million).
 

Figure 5: Total prescriptions and government expenditure, by month, 2019 to 2021

This chart provides an overview of total prescriptions dispensed and government expenditure (in current prices) for PBS and RPBS medicines by month, during the COVID-19 pandemic in 2020 and 2021 and prior to the pandemic back to 2019. The pandemic had the largest impact on total prescriptions in March and April 2020. In March, there was an increase of 23% in prescription volume in 2020 (31.0 million), compared with 2019 (25.2 million). In April, prescription volume decreased by 9% in 2020 (22.7 million) compared with 2019 (24.9 million).   

How have medicines associated with COVID-19 treatments been managed?

Due to global supply constraints and development of new novel treatments for COVID‑19, the Australian Government has made significant direct investments in a diverse range of treatment options to support access to, and delivery of, safe and effective COVID-19 vaccines and treatments as soon as they are available. This includes new novel treatments such as intravenous treatments, sotrovimab and remdesivir, and the listing of 2 new oral antiviral treatments, molnupiravir and the combination product of nirmatrelvir and ritonavir, on the PBS Schedule in 2022. 

During the pandemic, the medicines tocilizumab, hydroxychloroquine and ivermectin have attracted interest. Tocilizumab is a biologic medicine used to treat a number of conditions including severe arthritis and giant cell arteritis. Concerns were raised that consumers would be impacted by the global shortage of tocilizumab, due to off‑label  use (where a drug is prescribed for an indication, a route of administration, or a patient group that is not included in the approved product information document for that drug) for treatment of COVID-19. Hydroxychloroquine is an antimalarial and anti-rheumatic drug and ivermectin is an anti-parasitic drug. There were also concerns about unapproved use of these 2 medicines for treatment of COVID-19.

Tocilizumab

In July 2021, Roche Products Pty Limited (Roche), the sponsor of tocilizumab (Actemra), notified the TGA of shortages of multiple presentations of tocilizumab (Actemra) products due to global demand in response to the COVID-19 pandemic (due to the use in the treatment of critically ill COVID-19 patients as per the World Health Organization recommendations). Tocilizumab has been given provisional approval for the treatment of COVID-19 in Australia.

From 15 August 2021, temporary PBS arrangements have been in place to facilitate timely access to tocilizumab and appropriate alternative medicines until the shortage of tocilizumab has been resolved. These include:

  • switching from subcutaneous tocilizumab to intravenous tocilizumab
  • switching from tocilizumab to an alternative medicine
  • making subcutaneous tocilizumab presentations interchangeable whichever presentation is available (ended on 30 April 2022)
  • considering the off-label use of baricitinib (a rheumatoid arthritis medicine) for COVID-19 patients to conserve tocilizumab for patients with limited medicine options (such as juvenile idiopathic arthritis and cytokine release syndrome).

In early March 2022, Roche advised that availability of tocilizumab (Actemra) in Australia continues to improve but will remain constrained throughout early 2022.

Script volume of tocilizumab showed a decrease of 25% from August to September 2021, and a further 20% decrease in October (Figure 6). Volumes were steady in November, with a 7% increase in December. Correspondingly, script volume of substitutable PBS medicines showed a 5% increase in November 2021, and a further 7% increase in December.

Numbers of patients claiming a script for tocilizumab showed a 23% decrease for September 2021, followed by a 16% decrease for October 2021. For the relevant substitutable PBS medicines, there was a small increase of 3% in patient numbers for both November and December 2021.

Hydroxychloroquine

Hydroxychloroquine has been touted since early 2020, as being highly effective in COVID-19 prevention and treatment, despite a lack of clinical evidence and official concerns about patient safety.

There was concern that prescriptions may be used for off-label treatment for COVID-19. To discourage this practice, in March 2020 the TGA placed restrictions on medical specialists who could initiate prescribing of the medication. Further changes in hydroxychloroquine PBS listing criteria took place on 1 May 2020 where the PBS restriction level of hydroxychloroquine on the PBS was increased. The Clinical Evidence Taskforce also strongly recommended that people do not use hydroxychloroquine to treat COVID-19.

There was an initial surge of prescribing hydroxychloroquine in March 2020, followed by a reduction over the next 2 months (Figure 6). Since then, there has been no indication that there is widespread off-label prescribing, with script volumes following a similar pattern to the previous year. There was a 6% increase to around 325,000 scripts from 2019 to 2020, followed by a 2% increase to around 332,000 scripts in 2021.

Ivermectin

The efficacy of ivermectin for the prevention and treatment of COVID-19 has been hyped, even though there is no robust clinical evidence, and official concerns about safety of off-label use.

There was concern that prescriptions may be misused for treatment of COVID-19. The Clinical Evidence Taskforce strongly recommended that people do not use ivermectin to treat COVID-19.

There was some indication that ivermectin might have had some off-label prescribing, with script volume increasing by 19% to over 13,600 scripts from 2019 to 2020 (Figure 6). This was followed by a 7% increase to about 14,500 scripts in 2021.
 

Figure 6: Total prescriptions and government expenditure, by selected medicines, 2019 to 2021

This chart displays prescription volume and government expenditure in current price for medicines: tocilizumab, hydroxychloroquine, and ivermectin, by month between 2019 and 2021.

Prescription volume of tocilizumab showed a decrease of 25% from August to September 2021, and a further 20% decrease in October. Volumes were steady in November, with a 7% increase in December.

Prescriptions dispensed for hydroxychloroquine increased by 6% to around 325,000 from 2019 to 2020, followed by a 2% increase to around 332,000 in 2021.

Prescription volume of ivermectin increased by 19% to over 13,600 from 2019 to 2020, followed by a 7% increase to about 14,500 in 2021.

Non-PBS/RPBS subsidised medicines

Over-the-counter (OTC) medicines

In addition to prescription medicines, certain types of medicines and other health care products are available from pharmacies, supermarkets or health food outlets without a prescription. Among OTC and complementary medicines sold in pharmacies, natural health products were the largest-selling items, with an estimated expenditure in 2019–20 of $1.7 billion. These include vitamin and mineral supplements, herbal medicines, homeopathic preparations and probiotics. Analgesics were the second largest-selling group ($563.4 million) (Figure 7).

Compared with the previous year, growth in expenditure for OTC medicines in 2019–20 was greatest for home self‑care products at 37%. Among these products, masks and thermometers experienced the largest increases in expenditure. The second largest growth was for allergy medicines at 7%. Footcare had the biggest decline in expenditure at 7% less than the expenditure in 2018–19.
 

Figure 7: Expenditure on over-the-counter medicines sold by pharmacies, 2018–19 and 2019–20

This chart displays total expenditure for medicines available over-the-counter from pharmacies in 2018–19 and 2019–20. Consumers spent an estimated $1.7 billion on natural health products in both 2018–19 and 2019–20.

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-indication use; and are provided to consumers who are not eligible for PBS.

Private scripts expenditure for 2018–19 and 2019–20 was estimated at $902.8 million and $836.0 million (current prices) respectively, representing a decline of 7.4% (AIHW 2021).

Where do I go for more information?

For more information on medicines in the health system, see:

For information on how medicines are regulated, see:

References

ABS (Australian Bureau of Statistics) (2011) ABS Australian Demographic Statistics, Jun 2011, ABS, Australian Government, accessed 7 February 2022.

ABS (2021) National, state and territory population, Jun 2021, ABS, Australian Government, accessed 7 February 2022.

AIHW (Australian Institute of Health and Welfare) (2021) AIHW Health Expenditure Database [unpublished database], AIHW, Australian Government.

Department of Health (2021) Expenditure and Prescriptions Twelve Months to 30 June 2021, Department of Health, Australian Government, accessed 7 February 2022.

IRI (Information Resources Incorporated) (2020) Unpublished data, IRI, Melbourne.

IRI (2021) Unpublished data, IRI, Melbourne.