From $31.60 to $25: How New PBS Rules Make Prescriptions More Affordable

From 1 January 2026, Australians will pay less for many prescription medicines listed on the Pharmaceutical Benefits Scheme (PBS), with the maximum co-payment for Medicare card holders reduced from $31.60 to $25 per prescription. The concessional co-payment remains capped at $7.70 per script until 1 January 2030, helping to ease cost-of-living pressures for people on lower incomes.

About the PBS and Co-payments

The PBS, funded by the Australian Government, subsidises the cost of more than 900 prescription medicines, sharing the cost between the government and patients. The amount patients pay at the pharmacy is known as the co-payment, and in some cases a brand premium may apply if a higher-priced brand is chosen over a generic equivalent.

Details of the 2026 Co-payment Reduction

From 1 January 2026, the maximum out-of-pocket cost for PBS medicines for Medicare card holders is $25 per prescription, down from $31.60 in 2025. This reduced co-payment will apply for the entire 2026 calendar year, after which co-payments will again be indexed annually in line with the Consumer Price Index.

For people with a Commonwealth concession card, the maximum co-payment will stay at $7.70 per prescription until 2030, providing ongoing certainty about the maximum cost of PBS medicines. These measures are designed to make PBS medicines more affordable so that people are less likely to delay or skip filling prescriptions due to cost.

Co-payment Freeze for Concession Cardholders

A five-year freeze on concessional PBS co-payments took effect on 1 January 2025, locking the concessional co-payment at $7.70 per prescription until 2030. This means concession card holders will continue to pay a maximum of $7.70, plus any applicable brand or other premiums, throughout this period, with indexation resuming from 2030.

PBS Co-payment Eligibility and Concession Cards

To access PBS-subsidised medicines and the reduced co-payment from 1 January 2026, patients must have a valid Medicare card or Commonwealth concession card and a prescription from an authorised prescriber. Concession eligibility extends to Australians holding various government-issued cards, including the Commonwealth Seniors Health Card, Health Care Card or Low Income Health Care Card, Pension Concession Card, and the PBS Safety Net Card. Individuals with a Foster Child Health Care Card or an Ex-Carer Allowance (Child) Health Care Card are also eligible, along with holders of Department of Veterans’ Affairs Gold, White, or Orange cards.The reduced and frozen co-payment levels are intended to ensure that cost is less of a barrier to accessing necessary medicines for eligible patients.

Phase-out of the Optional $1 Discount

The optional $1 discount that pharmacists can apply to PBS patient co-payments is being phased out. For Medicare card holders, this discount will cease from 1 January 2026, while for concession card holders it will be gradually reduced each year until it is fully removed in 2030. Patients are encouraged to discuss pricing with their pharmacist and compare different pharmacies, including online options, to find the best available price for their prescriptions.

Extra-Savings with 60-day Prescriptions

Further savings are available through 60-day prescriptions for patients with stable, ongoing conditions when their doctor prescribes eligible PBS medicines for 60 days’ supply. With a 60-day prescription, patients can receive twice the usual quantity of medicine with a single co-payment, potentially halving the number of pharmacy visits and dispensing charges. Patients using 60-day prescriptions may save up to $150 a year per medicine if they are Medicare card holders without a concession, and up to $46.20 per medicine annually if they hold a concession card, depending on medicine cost and brand premiums.

The savings will be lower where the price of the medicine is already below the maximum co-payment or where additional premiums apply.

Why Medicine Prices Vary

The price a patient pays for a PBS prescription can differ between pharmacies and also depends on whether they choose a generic medicine or a brand-name product that attracts a brand premium. Brand premiums are set by manufacturers and are paid on top of the PBS co-payment, and these premiums do not count toward the PBS Safety Net. Patients can often reduce their costs by opting for generic versions, which are considered clinically equivalent to brand-name medicines but are usually cheaper.If a medicine costs less than the full PBS co-payment amount, normal retail pricing applies and pharmacies can set their own prices, which is why prices may vary depending on where a prescription is filled. The total cost can also differ depending on whether the prescription is written for 30-day or 60-day supply.