Glossary

Term

Definition

Increased Discounting Range (IDR)

  • The IDR includes any prescriptions with a Commonwealth price between the general patient co-payment amount and the Upper IDR threshold i.e., for 2023, between $30.00* to $45.60*.  

*Indexed from 2024

Increased discounting

  • For medicines within the IDR, the pharmacy has the option to offer the customer a price lower than the general patient co-payment and have it recorded in the patients Safety Net record i.e., the dispenser can discount the PBS script without forcing the script to become private
  • However, if the item is discounted below the general patient co-payment amount the pharmacy will not receive any subsidy from the Government (reimbursement comes from patient only). 
  • Increased discounting is separate and distinct to the existing optional Co-Pay Discount arrangements

General patient co-payment

  • This is the maximum price a general patient should pay for a PBS prescription (excluding any price premiums). 

Upper IDR Threshold

  • The Upper IDR Threshold is formerly the general patient co-payment amount for 2022 plus indexation.

Any prescriptions with a commonwealth price above the Upper IDR Threshold are not eligible for increased discounting. 

Commonwealth Price

Includes: 

  • The base price adjusted for actual quantity supplied
  • Wholesaler fees; and
  • Pharmacy fees, such as AHI Markup, Dispensing fee, etc

Excludes:

  • Co-payments;
  • Safety Net recording fee;
  • Optional additional patient charge;
  • Brand premiums; and
  • Any other special patient contributions

The price can also be referred to as the Dispensed Price by Quantity Supplied (or DPQS) or the Dispensed Price Max Quantity (DPMQ) when the maximum quantity is supplied, excluding any price premiums.

 

Another way to think about this is, if the patient has reached their Entitlement Safety Net, and therefore receive their prescriptions for free (excluding any premiums) what would the Government subsidisation to pharmacy be? This Government subsidisation is the ‘Commonwealth Price’. 

Dispensed Price by Quantity Supplied (DPQS)

  • The amount the Commonwealth subsidises pharmacies directly, by combining the price for manufacturers and fees for wholesalers and pharmacies, but as per a specific quantity (as opposed to max quantity)

Dispensed Price by Maximum Quantity (DPMQ)

  • The maximum amount the Commonwealth subsidises pharmacies directly, by combining the price for manufacturers and fees for wholesalers and pharmacies

 

Q. Which patients do these changes affect?

A. These changes only affect General patients.

 

Q. Are there any changes for CTG patients?

A. There is no change for Concessional CTG patients.

For General CTG patients, the price to patient is calculated the same, however, the Safety Net contribution has changed to:

  • If the Commonwealth Price of the script is the General patient co-payment amount or more, the Safety Net contribution for the script is the Upper Threshold of the Increased Discounting Range.
  • If the Commonwealth Price is less than the General patient co-payment amount, the Safety Net contribution is the maximum safety net amount as per the PBS, i.e., the same as what a non-CTG patient would receive

 

Q. Can discount be given on Early Supply PBS scripts?

A. No, Early Supply PBS scripts, i.e., where the supply has safety net implications, are not eligible for co-pay discounting or increased discounting. 

Immediate Supply dispensing’s (i.e., Regulation 25 prescriptions that do not have safety net contributions) are eligible for discounting. 

 

Q. What price is used to determine if a medication is in the IDR?

A. The price is the ‘Commonwealth Price’ i.e., if a patient has reached their Entitlement Safety Net, and therefore receive their prescriptions for free (excluding any premiums), what would the Government subsidisation to pharmacy be? This Government substitution is the ‘Commonwealth Price’.

This includes: 

  • The base price adjusted for actual quantity supplied
  • Wholesaler fees; and
  • Pharmacy fees, such as AHI Markup, Dispensing fee, etc.

Excludes:

  • Co-payments;
  • Safety Net recording fee;
  • Optional additional patient charge;
  • Brand premiums; and
  • Any other special patient contributions.

The price can also be referred to as the Dispensed Price by Quantity Supplied (or DPQS) or the Dispensed Price Max Quantity (DPMQ) when the maximum quantity is supplied, excluding any price premiums.

 

Q. A General patient has a script (not Early Supply) for an item where the Commonwealth price is above the Upper IDR Threshold, what will the Safety Net contribution and price to the customer be?

A. The price to the customer will be the current general patient co-payment, plus any price premiums and less the co-pay discount if applied to the script.

The Safety Net contribution will be the current general patient co-payment, less any co-pay discount if applied to the script.

 

Q. A General customer has a script (not Early Supply) for an item where the Commonwealth price is below or the same as Lower IDR Threshold, what will the Safety Net contribution and price to the customer be?

A. This is an under-co-payment script and the pharmacy can adjust the price to the customer.

The Safety Net contribution is the amount paid by the customer less any price premiums and allowable extra fee.

 

Q. What happens when a General patient has a script (not Early Supply) for an item where the Commonwealth price is within the IDR?

A. The pharmacy may choose to apply -

  • No discount

1. The price to the customer will be the current general patient co-payment amount, plus any price premiums.

2. The script is claimable.

3. The Safety Net contribution is the general patient co-payment amount.

  • Co-pay discount

1. The price to the customer will be the general patient co-payment less the co-pay discount, plus any price premiums.

2. The script is claimable.

3. The Safety Net contribution is the general patient co-payment less any co-pay discount applied.

  • Increased discount

1. The pharmacy can discount the script by more than the maximum co-pay discount.

2. The script becomes under-co-payment.

3. The Safety Net contribution is the price to patient less any price premiums and allowable extra fee.

 

Q. What happens when a script has a price premium that makes the DPMQ (for a maximum quantity) fall within the IDR?

A. For example, Cellufresh which has a brand premium (https://www.pbs.gov.au/medicine/item/2338C-5506T)

The DPMQ on the PBS website for the brand supplied includes the brand premium. However, brand premiums are not considered when calculating the ‘Commonwealth Price’ which is used to determine if the medication is in the IDR. Even though the DPMQ for Cellufresh is above the general patient co-payment it is an under-co prescription that attracts no government subsidy as it is only the brand premium, covered by the patient, which is pushing the price above the general patient co-payment value.

 Another way to think about this is, if the patient has reached their Entitlement Safety Net, and therefore receive their prescriptions for free (excluding any premiums) what would the Government subsidisation to pharmacy be? This Government substitution is the ‘Commonwealth Price’. If the script had a premium the patient would need to cover this cost.

 

Q. I have set prices set up, how are these impacted by the IDR?  

A. Set prices include: 

  • Fixed Price
  • Fixed Price Mark-Up
  • Calculated by Pricing Table
  • Special Price for a patient

These will continue to be applied to prescriptions as they were prior to 1 January 2023 i.e., for a general patient where:

  • The set price is less than the PBS general patient co-payment – the default price to customer will be the set price
  • The set price is greater than the PBS general patient co-payment – the default price to customer will be PBS General Patient Co-Payment as per pre-1 January 2023 behaviour
Note: This assumes you have Auto discount of PBS price checked in Dispense Configuration, refer to Dispense Pricing Configuration for more information.

 

Q. A patient was previously charged a special price of $35.00 for an item, what will they pay from 1 January 2023?

A. The PBS general patient co-payment will be reduced from 1 January 2023. This means that any set prices, including special prices, set above the General patient co-payment amount will not be applied as they were prior to 1 January 2023 (when the maximum fee was $42.50). The patient will be charged the General patient co-payment (plus premiums) for a general script. 

 

Q. Why is the Co-pay option on the Discount dropdown list greyed out?

A. You may need to review the Co-Payment Discount amount you have set up in Dispense Options.

If you have the Co-payment Discount set to $0.00 in Options then:

  • When the selected drug is above the Upper IDR Threshold the Discount dropdown is disabled on the Dispense Form – this is the same behaviour the Co-Pay checkbox had pre 7.4.1 
  • When the selected drug is in the IDR then the Discount dropdown is enabled, however the Co-pay option is greyed out as your value set in Options is $0.00, I.e. if it was enabled and selected it would be the same as no discount.

 

Q. Why does the Discount dropdown display ‘Co-pay’ when I want to give my customer an increased discount?

A. If the discount is in the Co-payment discount range, then this is considered a Co-payment discount and will still attract government contribution. Increased discounting is any discount greater than the allowed co-payment discount.

 

Q. What happens when a General patient with a PBS Safety Net concession card, has a script (not Early Supply)?

A. The pharmacy may choose to apply no discount or the co-pay discount.

 

Q. How do I know if a script could attract a government contribution?

A. The Discount dropdown will be set to Incr. Disc. To review the government contribution, you would be entitled to, either refer to PBS Website or in Minfos set the Discount dropdown to No Disc and click Drug Info f8.