This impact analysis supports the Australian Government's consideration of a reduction to the Pharmaceutical Benefits Scheme (PBS) general co-payment. A co-payment is the amount of money a patient pays for their PBS medicines. Some non-concessional Australians are not taking their prescribed medicines because they cannot afford to buy them, particularly in the current context of higher cost of living pressures. 

From 1 January 2026, the general patient co-payment for PBS medicines would be reduced from $31.60 to $25.00. The general patient co-payment would be then indexed each year from 2027 in line with the CPI. This proposal was an election commitment in 2025. The National Health Amendment (Cheaper Medicines) Bill 2025 was introduced in the House of Representatives on 30 July 2025.

The analysis compares the general patient co-payment reduction to $25 against the status quo. It considers the number of prescriptions historically dispensed that were below and above the new co-payment amount, the impact of the co-payment at various levels to competition in the market, the impact of the co-payment reduction on allowable discounts and incentives, the interaction of the co-payment and the Safety Net, and the impact on the PBS expenditure and revenue.

The Department of Health, Disability and Ageing estimated the proposal would:

• Save patients $784.6 million over four years from 2025–26, and $236.9 million per year ongoing from 2029–30.
• Increase government expenditure by $689.1 million over four years from 2025–26, and $204.8 million per year ongoing from 2029–30.
• Result in a flow-on cost of $95.5 million over 4 years from 2025-26 to pharmaceutical manufacturers, and $31.6 million per year ongoing from 2029–30.

Assessment of the impact analysis: adequate.