Measuring the Progressivity of the Pharmaceutical Benefits Scheme

Rachel J. Knott, Philip M. Clarke, Emma L. Heeley and John P. Chalmers

Australian Economic Review, 2015, vol. 48, issue 2, 122-132

Abstract: type="main" xml:lang="en">

Through the Pharmaceutical Benefits Scheme, the Australian Government subsidises the cost of a large range of medicines. This study assesses the income-related distribution of Pharmaceutical Benefits Scheme resources using patient-level data from Medicare Australia and concentration indices. We find that use of, and government expenditure for, Pharmaceutical Benefits Scheme-subsidised drugs is progressive in that more resources flow to lower income groups, even after adjusting for differences in medical need, as measured by age, sex, self-assessed health and clinically assessed comorbidities. Of the major drug classes, cardiovascular drugs contributed substantially to the overall progressivity of Pharmaceutical Benefits Scheme subsidies, accounting for almost 50 per cent.

Date: 2015
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