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How are medicines funded in Australia compared with the UK?

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After completion of a month long community pharmacy placement in Coffs Harbour, Australia, I decided to share my thoughts and experiences. This blog entry will be the first in a series about community pharmacy in Australia, exploring thesimilarities and differences compared with pharmacy in the UK.

On the surface Australian pharmacy is comparable to what we have here in the UK. If you were to walk into a community pharmacy as a patient you would probably struggle to tell the difference. However, it would be inaccurate to say Australian pharmacy is a mirror image of the UK’s system.

So what is the difference ? One major difference is the way in which medicines are paid for. In Australia a universal health insurance scheme called Medicare is used. Under Medicare’s Pharmaceutical Benefits Schemes (PBS) the cost of prescription medication is subsidised for Australian citizens and eligible overseas visitors. Therefore patients will only pay part of the cost for prescription medication.

The maximum amount a patient will pay for a prescription item is $36.90 with anything over this amount covered by Medicare. However, certain patient groups are entitled to concession cards in which case they will pay a maximum of $6.00 per item. One particular co payment measure unprecedented to those working in UK pharmacies is the PBS Closing the Gap scheme. This is a scheme which recognises the cost of medication as a barrier for indigenous populations such as Aboriginals and Torres Strait Islanders to access healthcare. The payment for PBS medication in these patient groups is significantly reduced or removed hence making medication more accessible.

The annual maximum a patient will pay for their PBS medicines is controlled by a safety net threshold. This protects patients who require large amounts of medication from sizeable prescriptions costs. After a collective payment of $1,421.20 from a patient, the cost per item will be reduced to $6.00 for the remainder of the calendar year. For concession card holders the threshold is much lower at a value of $360, after this amount prescription medications will become free of charge.

In addition, the pharmacist can provide patients with a Prescription Record Form. The Prescription Record Form details the amount a patient has contributed towards their medication within the current calendar year. This information allows the patient to become aware of when the safety net threshold amount has been reached.

Medication which is not included on the Pharmaceutical Benefits Scheme for example Sildenafil, can be dispensed on a private prescriptions. The patient will be required to pay full price for this type of medication and the fee will not contribute to their PBS safety net threshold.

In conclusion, pharmacy practice in Australia operates in a similar way to pharmacy practice within UK. However the way in which patients pay for their medication seems to have more of an American influence in terms of health insurance provider use to cover medication costs.

Readers' comments (1)

  • RE: general patients paying a maximum of $36.90.

    It's important to note that if the actual cost of the medicines is less than $36.90 the price is then set at a pharmacy level and becomes a private transaction - (i.e. the prescription is not sent off to the NHS for payment at the end of month/claim period).

    This is in contrast to the UK, where there is a set charge (£8.05) which is not linked to the cost of medication or quantity supplied.

    What this means for patients is that for some medications the actual cost on a monthly basis can be (again - depending on which pharmacy they use):

    Atenolol 50mg (1 x 30) - $7-$20
    Sertraline 50mg (1 x 30) - $7-$20

    In addressing your final paragraph RE: American influence. Insurance providers set their cover for pharmacy benefits, but it seems to be industry standard that any medication costing less than $36.90 will not be reimbursed, or to put it another way the first $36.90 of a prescription charge, per item will not be covered by the insurance provider...with any cost above that being reimbursed either fully or as a % of the amount over $36.90.

    In reality most medications these days will fall under the $36.90 co-payment, due in part to generic competition and also due to the 30-day prescribing habits. So the reality for most (in my experience working in retail pharmacy, NSW) is that most patients do not meet the criteria (i.e. cost) and aren't paying enough to use their insurance coverage.


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