Announcement date
After an announcement on 28 July 2025, the National Health Amendment (Cheaper Medicines) Bill 2025 was introduced in the House of Representatives on 30 July 2025.
Link to announcement
Media release and National Health Amendment (Cheaper Medicines) Bill 2025
Problem being addressed
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. These people are more likely to be socioeconomically disadvantaged, and have multiple chronic conditions requiring multiple long-term medicines, which increases their monthly/bi-monthly Pharmaceutical Benefits Scheme (PBS) costs. Not taking medicines negatively impacts the health of these people, and likely leads to higher government costs due to their worsening health, such as increased likelihood of acute hospitalisations.
Proposal
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.
Assessed Impact Analysis outcome
Adequate
Assessment comments
The Impact Analysis provides a sufficient overview of the problem and the key challenging elements of PBS co-payments for general patients. To be considered ‘Good practice’ as per the Australian Government Guide to Policy Impact Analysis, the IA would have benefitted from consultation on potential stakeholder impacts and a detailed implementation plan.
Regulatory burden
A Regulatory Burden Measurement Framework was not used to determine impacts. Instead, the Department of Health, Disability and Ageing estimated financial savings and costs. The Department 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.