Keeping your medicines costs down
Medicines can take up a substantial chunk of your budget, especially if you're taking more than one. However, there are ways to reduce your spending on medicines without compromising your health.
If you or your family use a lot of medicines each year, the cost can really eat into your budget. It is worth knowing about the Government programs that are there to help, such as the Pharmaceutical Benefits Scheme (PBS) Safety Net, as well as prescribing options you can discuss with your doctor. Choosing the brand of your medicine when you have a prescription filled at the pharmacy is another opportunity to save yourself money. See the tips below to get started.
8 ways to save money on your medicines
- Consider your choice of medicine brands.
- Make sure your pharmacy has your Medicare number on file so you get the PBS subsidised price for your prescription medicines.
- Use the Pharmaceutical Benefits Scheme (PBS) Safety Net.
- Have your medicines reviewed by your doctor or pharmacist if you take several medicines.
- If you use a lot of one particular non-prescription medicine, ask your doctor whether getting it on prescription will cost you less (this is more likely to apply to concession card holders).
- If you take a higher dose of a medicine than the usual PBS prescription allows, ask your doctor if an authority prescription could reduce your costs. With an authority prescription, you may only pay the same amount as someone on the standard dose.
- Ask your doctor if a different strength of your medicine could save you money; for example, by allowing you to take one higher strength tablet rather than two tablets of a lower strength.
- For a few medicines, where there is a less expensive medicine that does the same job, you are charged a 'therapeutic group premium' if you use a more expensive medicine. If this applies to you, talk to your doctor to see if you can get an exemption for medical reasons.
Many medicines with the same active ingredient are available to you as different brands. When more than one brand of your prescription medicine is subsidised on the PBS (see below), the Government will pay no more than the lowest priced brand. If you buy a more expensive brand, you will need to pay the difference in cost — this is called the 'brand price premium'.
You can save money by asking if there is a less expensive brand of your prescription medicine. (Your pharmacist may also offer you a less expensive brand for a non-prescription medicine.)
Although you can save money by choosing less expensive brands, some people should not change brands.
Find out more about some of the situations where switching brands may not be a good idea. If your doctor wants you to stick with the brand they have prescribed, they will tick the 'Brand substitution not permitted' box on your prescription.
When a medicine is subsidised under the Pharmaceutical Benefits Scheme (PBS), you pay part of the cost of the medicine (a co-payment), and the Government pays the rest. About 80% of prescriptions dispensed in Australia are covered by the PBS. PBS-subsidised medicines are available to all Australian residents who hold a current Medicare card. Make sure you show your Medicare card when having a prescription filled to get a PBS medicine at the subsidised price. Many pharmacies can keep a record of your Medicare number so you only have to show your card once.
Some overseas visitors are also eligible for PBS-subsidised medicines. See PBS — brief overview for more details.
Some medicines that are available without a prescription are also subsidised if you have a prescription and meet the criteria for PBS subsidy (e.g. nicotine patches). Ask your doctor to find out whether you can get a prescription for any of the over-the counter medicines you currently take.
When a prescription medicine is not subsidised under the PBS, you can still obtain it on private prescription, but you will pay the full cost. In some cases, private health funds may pay part of the cost of medicines bought on a private prescription.
Read more about PBS listing, including why the PBS subsidises a medicine for some illnesses and not others and why some medicines are subsidised on the PBS, but others aren't.
The Repatriation Pharmaceutical Benefits Scheme (RPBS) is available for eligible veterans and their dependents, and includes more medicines than are on the PBS.
If you or someone you know might be entitled to benefits under this scheme, find out more about eligibility for the different levels of cover.
At the beginning of each year the Australian Government sets a maximum limit to the amount a person is required to pay for a PBS-listed medicine – this is known as a co-payment. Many PBS-listed medicines cost a lot more than the co-payment, and the difference is paid for by the Government.
You can find out what the current co-payment thresholds are for eligible Australians with or without concession cards on the PBS website under What are the current patient fees and charges?
To be eligible for the concession rate for PBS medicines, you need one of the following cards:
- a Pensioner Concession Card
- a Commonwealth Seniors Health Card
- a Health Care Card or
- a Department of Veterans' Affairs (DVA) Gold, White, Orange or Pensioner Concession Card
Some state and territory governments issue Seniors Cards, but these do not entitle you to the concession rate on PBS medicines.
Centrelink is responsible for Pensioner Concession Cards, Commonwealth Seniors Health Cards and Health Care Cards. Find out more about the benefits available with Centrelink concession cards, eligibility and how to claim.
The Department of Veterans' Affairs is responsible for Gold, White and Orange Cards as well as DVA Pensioner Concession Cards. The DVA Pensioner Concession Card entitles holders to PBS medicines at the concession rate, but does not give access to RPBS-subsidised medicines.
The PBS Safety Net entitles people to free or cheaper medicines if they spend more than a certain amount on PBS (prescription) medicines in a calendar year. Once you spend this amount, you reach the 'Safety Net threshold' and
- if you normally pay the general rate, your payments will be reduced to the concessional rate for the rest of the calendar year
- if you normally pay the concessional rate, PBS medicines will be free for the rest of the year.
Like the costs for subsidised medicines, thresholds for the Safety Net are adjusted annually. You can find out what the current Safety Net thresholds are for eligible Australians with or without concession cards on the PBS website under What are the current patient fees and charges?
Read more about the PBS Safety Net.
Before you can become eligible for free or cheaper medicines under the PBS Safety Net scheme, you must have a record of how much you have spent on PBS medicines that year.
If you always use the same pharmacy, ask your pharmacy to record your spending on their computer. You can ask for a print-out of your spending from the pharmacy at any time.
If you use different pharmacies, you can:
- obtain a print-out of your spending from each, or
- record all your spending on a prescription record form, which can be obtained from any pharmacy.
The Safety Net applies to a calendar year, so ask for a form the first time you buy a PBS medicine in the new year. Hand your prescription record form to the pharmacist each time you have a prescription filled that year. The pharmacist will record the medicine and its cost on the form. Find out more about keeping track of your PBS prescription spending for the Safety Net.
If you have a family, ask your pharmacy to combine the amounts spent on each person's medicines into one Safety Net total or use one prescription record form for the entire family. An eligible family can be made up of you, your spouse (including de facto spouse), dependent children under 16 years and dependent students under 25 years.
When your record shows that you have spent the required amount on PBS medicines, your pharmacist will give you a 'Safety Net Card' that you can use to obtain free or cheaper medicines for the rest of the calendar year.
The way to obtain the best value for your PBS medicines is to obtain only the quantity you need when you need them.
If you fill your repeat prescriptions too close together, the Safety Net may not apply. If you buy certain medicines within a specified number of days after having bought them previously, a rule called the 'Safety Net early supply rule' applies. In such cases, and if you are already using a Safety Net Card, you will have to pay your usual PBS patient payment for the medicine, not the Safety Net rate. If you haven't reached the threshold for the Safety Net, the cost of the medicine will not count towards your Safety Net tally.
This rule applies only to certain PBS medicines depending on the type of medicine and the quantity that can supplied on a prescription.
This rule is designed to prevent people on a Safety Net Card using their card to obtain additional unnecessary supplies of their medicines at the end of a calendar year.
If you've been taking several medicines for some time, a review of your medicines may show that you no longer need all of them. It may also show that you're taking more than you need of one or more of them. Stopping any unneeded medicines will save you money and reduce your chances of medication problems. Of course, you should not stop a medicine to save money without discussing this with your health professional. If you are concerned about the cost, always discuss this with your doctor who may be able to suggest ways to streamline your medicines that don't put your health in jeopardy.
Your GP can review your medicines, or they can arrange for a qualified pharmacist to conduct a Home Medicines Review. Talk to your GP or pharmacist about getting a Home Medicines Review.
In some cases, you can save money by buying a medicine on prescription rather than over the counter (i.e. without a prescription) from a pharmacy or supermarket. This situation is more likely to apply if you are a concession card holder.
For example, if you regularly use paracetamol (Panadol, Panamax, Tylenol, Dymadon P, etc) for chronic arthritis pain, you may save money by buying the paracetamol on prescription. Buying medicines on prescription also allows you to count the cost of the medicine towards your Safety Net tally, so you will reach the Safety Net threshold sooner. Talk to your doctor to see whether this would work for you.
Some medicines are more closely monitored to make sure they are PBS-subsidised only for specific illnesses in particular groups of people. For these 'authority' prescription medicines, the prescriber has to either phone Medicare for approval or enter a special code on the prescription.
Authority prescriptions are also sometimes used if a higher dose of a medicine is required than is usual. With the authority prescription, you will only pay the same amount as someone on the standard dose.
Ask your doctor to see if an authority prescription might be an option for you. If your doctor gives you an authority prescription, you can give it to the pharmacist as you would any other prescription.
Many medicines come in different strengths, so sometimes you can save money by buying a different strength of your medicine.
For example, if you usually take two 100 mg tablets of a medicine at a time, and a 200 mg strength is available, you may be able to take just one 200 mg tablet at a time. This may mean that you need fewer prescriptions, which will save you money. If this situation could apply to you, talk to your doctor.
However, splitting higher dose tablets to obtain your dose at a lower price is not always a good idea. Some tablets should only be taken whole because of their coating, and others are difficult to split accurately, so talk to your doctor or pharmacist before you split tablets.
Where there are groups of medicines that all do similar jobs — that is, they are all about as safe and effective as each other for treating a particular condition — the Government pays the cost of the least expensive one. If you are not buying the least expensive medicine, you will need to pay the difference — this is called the 'therapeutic group premium'. If there is a medical reason you need to take a medicine with this premium, your doctor can ask for an exemption so you don't need to pay.
Only a small number of medicines have a therapeutic group premium. You can check the PBS website to see if your medicine is in this category.
Tax offsets (sometimes also referred to as rebates) reduce the amount of tax you pay. They are not the same as tax deductions.
You can claim part of the eligible net medical expenses spent above a certain amount in a financial year. You need proof that you've spent the required amount, so you must keep all your medical and pharmacy receipts. Net medical expenses are the eligible medical expenses you have paid after any refunds from Medicare or private health insurance.
For more information about which medicine expenses are eligible, visit the Australian Tax Office website, ring them on 132 861, or talk to your tax advisor.