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Updated: Mar 9, 2021


The Australian healthcare system is rated among the best healthcare system among the OECD nations. In Australia, the average life expectancy at birth is 82 years.

In the year 2011-12, Australia has spent 9.5% of GDP on healthcare

In Australia, the responsibility of providing the healthcare services was divided at three levels: federal, state and local.

Responsibility of the federal government:

  • Providing funds

  • Indirect support to states and health professionals

  • Subsidising health-care services by Medicare Benefits Scheme (MBS) and Pharmaceutical Benefit Scheme (PBS)

  • Giving funds to states

  • Responsibility of state government:

  • Maintaining the public hospitals, ambulance services, dental care, mental and community health-care services

  • It has to arrange funds in addition to funds provided by Central government

Responsibility of local government:

  • Local governments are responsible for delivering the health-care and preventive services including immunization


Medicare, a universal health insurance provides free or subsidized health-care services in Australia. Medicare funded by federal government. Medicare is funded by taxes.

Private health insurance:Australian government encourages to have private insurance. Private health insurance helps to provide better access to non-emergency services, rebates on selected providers. Nearly half of the Australian population has private health insurance.


All Australian citizens, including patients having permanent VISA, New Zealand citizens enrolled in the program are covered by Medicare.


Federal government determines the services that need to be provided (including hospital, medical and pharmaceutical services)

States are responsible for providing free hospital services in the government hospitals. States fund in addition to the federal funds for health-care services.

Out-of-pocket spending accounts for 18% of total health expenditure, maximum spending is on pharmaceuticals.

Public hospitals provide services for free. MBS fund completely for services of general practitioners, however, MBS fund up to 85% for specialist services.  


Council of Australian Governments: It comprises of Prime Minister and first ministers.

It is involved in decision making at federal level

Involved in funding decisions

Responsible for policy issues

Responsible for implementation of MBS and PBS

Responsible for approval of new drugs

Department of Health:Responsible for implementation of MBS and PBS. It is also involved in the price negotiation with the pharmaceutical companies based on the PBAC recommendations.

Therapeutic Good Authority and its role: The Therapeutic Good Authority (TGA) in Australia is involved in approval of the new medicines. Advisory Committee on Prescription Medicines (ACPM) provides suggestions to TGA while making the decision. The products that are approved by TGA has eligibility for marketing in Australia and also for listing the product in the Pharmaceutical Benefit Scheme.


Pharmaceutical benefits scheme (PBS): Pharmaceutical Benefit Scheme is the scheme through which the Australian government provides medicines to the Australians. The government will provide the subsidy for the medicines.

Ministry of Health is responsible for listing the pharmaceutical products in PBS.

Pharmaceutical products must have TGA approval to get included in PBS listing.

Pharmaceutical Benefit Assessment Committee:It is an independent body which makes the recommendations whether to include or not to include pharmaceuticals in the PBS. PBAC reviewss the applications of new submissions as well as for already listed products.

Each submission is expected to follow PBAC guidelines. PBAC guidelines provides the information on the clinical and economic evidence to be dubmitted during the submission.

PBAC has two sub-committees:

Economic sub-committees: Assess the clinical and economic evidence

Drug utilisation sub-committee: Assess the drug utilisation before the product being included in the PBS

Factors considered by PBAC for drug assessment:

  • Clinical efficacy

  • Safety

  • Budget impact

  • Disease severity

  • Competition (availability of other therapeutic options)

PBAC is also involved in recommending the immunization through the National Immunisation Program. PBAC compromises of physicians, pharmacists, and health economists.

After the assessment, PBAC submits the recommendations to the Department of Health. DoH might sometimes makes the price negotiations with the pharmaceutical manufacturers based on the assessment.

Since 2011, a parallel process has been started where the drug approval and the PBAC submissions can be done in parallel.


1. ISPOR Australian HTA RoadMap Available from

2. Image source:



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