Costs for medications dispensed to contemporary ex-serving members

On this page:

  • Total costs
  • Government costs
  • DVA cardholders and the RPBS and PBS
  • Safety Nets in the PBS and RPBS

This section provides information on the costs associated with medications dispensed to contemporary ex-serving members in 2017–18.

  • Total costs are the sum of government and patient co-payment costs for dispensed medications.
  • Government costs relate to the difference between the relevant patient co-payment amount and the total dispensed cost. Also referred to as the benefit amount.

Averages presented in this section are for members who were dispensed at least one medication in 2017–18. Averages for different medication classes are calculated only for members who were dispensed a medication in that medicine class. Averages presented for age and sex adjusted rates are the rate per person within each population. Costs include costs associated with either the PBS and/or RPBS. 

PBS and RPBS costs in 2017–18

Data in this report include all valid medications dispensed under the PBS/RPBS (including medications dispensed that are under the co-payment amount, known as ‘Under co-payment data’. PBS/RPBS co-payments and Safety Net Thresholds are updated on 1 January each year. Co-payment and Safety Net Thresholds for 1 January 2018 are as follows (for full details on fees, patient contributions and thresholds for both 2017 and 2018, see http://www.pbs.gov.au/info/healthpro/explanatory-notes/front/fee ):

  • General co-payment = $39.50, Safety Net Threshold = $1,521.80, co-payment once safety net reached = $6.40.
  • Concessional co-payment = $6.40, Safety Net Threshold = $384.00, co-payment once safety net reached = $0.
  • Government contributions and co-payment amounts for DVA cardholders under the RPBS are the same as the concessional rates under the PBS, with eligibility depending on the type of DVA card and the entitlements available under that card, see this fact sheet for more information.

The following are some important notes to consider when interpreting information on costs in this report:

Given the different co-payment amounts for concessional (DVA cardholders and concession cardholders) and general beneficiaries, it is expected that a much higher proportion of general beneficiaries will be dispensed medications that are under the co-payment threshold. 

As well as government contributions provided through either the PBS or RPBS, ex-serving ADF members also have access to a range of other programs through DVA. These programs provide further reimbursement of medication costs, thereby increasing the government costs. As information on these is not available, they are not included in this report.

Two programs worth noting in the context of this report are the Medical Expenses Privately Incurred (MEPI) and Veterans Pharmaceutical Reimbursement Scheme (VPRS).

Results presented in this report on costs for medications under the co-payment amount are an estimate of the price of that medication, see Technical Notes for more details. 

Discounts applied to medications within pharmacies are not included in these results, including any discretionary discounts of the patient co-payment by the pharmacy. Therefore, costs for under co-payment medications are most likely an over estimate—noting this will affect results for total costs only.

Some medications will incur a Brand or Therapeutic Premium, which is a cost incurred by the individual. These premiums are also not included in these results.

Total costs for medications dispensed to contemporary ex-serving members

In 2017–18, total costs for the 1 million medications dispensed to contemporary ex-members came to just over $50 million, which was an average of $728 per person and $47 per dispensing (Table 4).

Accounting for age and sex differences, total costs for contemporary ex-serving members were $586 per person in 2017–18 and $666 per person in the Australian population (Supplementary table S1).

Half of all total costs for contemporary ex-serving members were for DVA cardholders (53%), followed by general beneficiaries (34%) and concession cardholders (13%). Reflecting the frequency of dispensings, the average total costs per person was highest for DVA cardholders ($1,223 per person) and in particular for Gold cardholders, ($2,006 per person). 

Table 4: Total costs for PBS/RPBS medications dispensed to contemporary ex-serving ADF members in 2017–18

 

Total costs ($)

% total costs

Average Total $ per person(a)

Average $ per dispensing

DVA Gold cardholder

13,997,429

27.8

2,006

47

DVA White cardholder

12,737,162

25.3

856

45

Sub-total:

All DVA cardholders

26,734,591

53.1

1,223

46

Concession cardholder

6,505,263

12.9

1,016

50

General beneficiary

17,081,663

33.9

418

48

All contemporary ex-serving members

50,376,759

100.0

728

47

(a) This is the average total cost per person. Total cost = government costs + patient costs.

Notes:

  1. Contemporary ex-serving member does not refer to the entire ex-serving ADF population. It includes only ex-serving ADF members with at least one day of full-time or reserve service on or after 1 January 2001, and were discharged after this time. The 69,177 members who received at least 1 dispensing in 2017–18 represented 64% of the total contemporary ex-serving population.
  2. For 81 contemporary ex-serving members with a dispensing in 2017–18, there were 1,678 dispensings with insufficient information to assign them to an ex-serving cohort.
  3.  Dispensings for DVA card holders may be for either the PBS or RPBS, this is particularly relevant for DVA White card holders.
  4. Average cost per dispensing is the average cost of medications dispensed to contemporary ex-serving members in 2017–18.
  5. Average cost per person is the average of contemporary ex-serving members who were dispensed a medication in 2017–18.

Source: AIHW analysis of linked PMKeyS–PBS/RPBS data 2017–18.

Total costs for different medications classes

Due to the very high prices of certain medications relating to the treatment of cancer, highest total costs for medications dispensed to members in 2017–18 were for ‘antineoplastics and immunomodulating agents’. Medications within this class accounted for 32% of total PBS/RPBS costs, but represented only 1.4% of all dispensings for contemporary ex-serving members in 2017–18 (Supplementary table S5) This pattern is consistent with age-matched results in the Australian population, with these drugs accounting for 27% of total PBS/RPBS costs, but representing only 1.5% of all dispensings.

Nervous system and cardiovascular system medications, which accounted for the largest proportion of dispensings for contemporary ex-serving members, accounted for 20% and 11% of total costs, respectively.

  • Average total nervous system medication costs were $294 per person for members dispensed a nervous system medication, and for cardiovascular system medications was $290 per person for members dispensed a cardiovascular system medication.
  • Antidepressants and opioids accounted for the two highest proportions of dispensings for Nervous System Medications. Total costs for these medication classes were $170 per person and $139 per person, respectively.
  • Lipid modifying agents accounted for the highest proportion of dispensings for Cardiovascular system medications. Average total costs were $185 per person.

After accounting for age and sex differences, average total costs for nervous system medications were $99 per person in the contemporary ex-serving population and $87 per person in the Australian population (Supplementary table S4), which is consistent with the rates of dispensing of nervous system medicines.

For cardiovascular system medications, total costs for the contemporary ex-serving population were $67 per person in the contemporary ex-serving population and $78 per person in the Australian population, adjusted for age and sex differences, which also reflects the rates of dispensing for these medication classes.

Government costs for medications dispensed to contemporary ex-serving members

In 2017–18, the costs met by Government for medications dispensed to contemporary ex-serving members under the PBS/RPBS was just over $38 million. This was just over three-quarters (76%) of the total costs for all contemporary ex-serving members, and equated to an average of $550 per person for the year (Supplementary table S9).

After accounting for age and sex differences, Government costs for the contemporary ex-serving population were $447 per person for the contemporary ex-serving population and $533 per person for the Australian population (Supplementary table S4).

Government costs for different medications classes

As with total costs, government costs were highest for ‘Antineoplastics and immunomodulating agents’, accounting for 41% of all government contributions to medications dispensed to ex-serving members in 2017–18.

Nervous system and cardiovascular system medications accounted for 17% and 7% of government contributions, respectively.

  • Average government costs were $190 per person dispensed a nervous system medication, and $128 per person dispensed a cardiovascular system medication.
  • Opioids and antidepressants had the highest volume of dispensing for nervous system medications. Average government costs for people dispensed these medications were $94 per person and $77 per person, respectively.
  • Lipid modifying agents had the highest volume of dispensing for cardiovascular system medications. Average government costs were $78 per person dispensed these medications (Supplementary table S8).

As with total costs, government costs for nervous system and cardiovascular system medications reflect the rate of dispensing for these medications in the contemporary ex-serving and Australian populations. After accounting for age and sex differences, average government costs for the contemporary ex-serving population were $61 per person for nervous system medications and $30 per person for the Australian population (Supplementary table S4). Government costs per person for cardiovascular system medications were $33 per person in the ex-serving population and $37 per person in the Australian population. 

DVA cardholders and the RPBS and PBS

As mentioned above, it is expected that DVA cardholders will have some dispensings provided under the PBS, rather than the RPBS. Government costs for dispensed medications come from both the RPBS (funded by the Australian Department of Veterans’ Affairs) and the PBS (funded by the Australian Department of Health).

The majority of costs for contemporary ex-serving members were dispensed under the RPBS (see Figure 12 below).

Figure 12: Total costs for medications dispensed to contemporary DVA cardholders in 2017–18

This bar chart highlights that the majority of total costs for medications dispensed to DVA cardholders in 2017–18 were associated with RPBS, around 20 million dollars. With around 6.5 million dollars associated with medications dispensed under the PBS.

Source: AIHW analysis of linked PMKeyS–PBS/RPBS data 2017–18.

Safety Nets in the PBS and RPBS

Another form of government available under the PBS and RPBS is safety nets for patients and families who reach certain cost thresholds within a given year. Once an individual, or family reaches the safety net threshold in the year, their medication costs are further reduced.

For concession cardholders and general beneficiaries using the PBS, these thresholds are based on cost. For concession cardholders, the safety net threshold on 1 January 2018 was $384. Once this threshold is reached, there are no further co-payment costs for concession cardholders. For general beneficiaries, the safety net threshold was $1,521.80. Once this threshold is reached, the co-payment cost per medication is $6.40 for general beneficiaries.

For RPBS users, safety net and co-payment thresholds were the same as for concession cardholders in the PBS.

In 2017–18, very small proportions of contemporary ex-serving members reached the safety net in 2017–18, less than 10% for each cohort, and less than 1% for general beneficiaries.

References

AIHW (Australian Institute of Health and Welfare) 2017. Medicines for cardiovascular disease. Canberra: AIHW.

DVA (Department of Veterans' Affairs) 2018. Non-Liability Health Care. Canberra: DVA. Viewed 1 July 2019.