• Bookmark and Share
  • Printer Friendly
  • Text Resizer - Small
  • Text Resizer - Large
  • Email this page

Generic medicines home

Enquiries about
generic medicines

For more information
about generic medicines
email us an enquiry.

Be MedicineWise

Medicines information
for the cost of a local call.

Medicines Line
1300 MEDICINE
(1300 633 424)
Mon–Fri 9am–5pm AEST
Your call will be answered by healthdirect Australia.

What is a brand premium? What is a brand premium?

Image of a woman called Yinny saying 'Same job. Different brand.’ Also has the message that ‘Generic medicines are an equal choice. They contain the same active ingredient.’

A brand premium is another way of saying ‘price gap’.

In Australia, many medicines are subsidised by the Australian Government. This helps to keep prices lower for the general public.
 
Under the Pharmaceutical Benefits Scheme (PBS), the Australian Government pays the same price for medicines that provide the same health outcomes.

Most prescription medicines containing the same active ingredient (in both brand and generic versions) will cost the same to a consumer. However, a pharmaceutical company may set a higher price for their brand than the subsidy provided by the government. In such cases, the difference between the subsidy and the price set by the company is passed on to the consumer — this additional cost is known as a brand premium.

For a pharmaceutical company to impose a brand premium there must be at least one equivalent brand of the medicine available without a premium. Brand premiums range from $0.08 to $76.86 per perscription — most brand premiums, however, range from $1.00 to $4.00.

In short, it’s the difference between the price the government is prepared to pay for a prescription medicine and the price the pharmaceutical company wants to sell it for. If there’s a gap, the consumer will be required to pay for it.

By choosing a medicine that does not have a brand premium you may be able to save, on average, approximately $3.00 per perscription, depending on which medicine you are buying. For more information, talk to your doctor and pharmacist.

Don’t miss this!

If this page was helpful you might also like to take a look at:
This site complies to the HONcode standard for trustworthy health information: verify here.
Health Insite Logo This website is certified by Health On the Net Foundation. Click to verify.