Distributional impact of higher patient contributions to Australia's Pharmaceutical Benefits Scheme

This paper uses NATSEM's Pharmaceutical Benefits Model to analyse the effects of a hypothetical 25 per cent rise in patient contributions to prescribed medicines under Australia's Pharmaceutical Benefits Scheme (PBS). The model, based on microsimulation techniques, is able to provide a much broader range of outcomes information, at a much greater level of detail, than is possible with traditional methods. Higher patient contributions are analysed in terms of their impact on the government to patient split in PBS costs, as well as the distribution of such costs across age groups, family incomes, family types and 36 prescribed medicine types. Also considered are changes in the shares of family disposable incomes spent on prescribed drugs arising from the higher patient contributions.