Aim. To determine whether the national declines in prescription medicine use occurring after the 2005 21% increase in co-payments affected all areas of Australia or were specific to remote and disadvantaged areas. Methods. Observed dispensing of proton pump inhibitors (PPIs) and statins were obtained for 1392 statistical local areas (SLA) of Australia in 2004 and 2006. Expected dispensing was based on national dispensing rates and was age standardised to each SLA. Expected dispensing for 2006 was based on pre-2005 prescription trends. Ratios of observed to expected dispensing (dispensing ratios) for each SLA were calculated. Mean dispensing ratios for each medicine and year were calculated for all remoteness and disadvantage groups. Generalised regression models compared the percentage change in dispensing ratios from 2004 to 2006. Results. Between 2004 and 2006 PPI dispensing fell significantly in major cities (-13.7%, 95% CI≤-17.3 - 9.8), inner regional (-14.0, 95%CI≤-19.5 - 8.2), outer regional (-14.6%, 95%CI≤-19.9 - 9.0) and remote areas (-9.4%, 95%CI≤-16.4 - 1.8). Statin dispensing fell in all groups but the most remote (range 6-7%). When focussing on disadvantage, PPI dispensing fell significantly in all groups (range 12-15%). Statins dispensing did not fall significantly in the most disadvantaged areas (-2.9%, 95%CI≤-8.6-3.2) but did in the least (-6.5%, -11.3 - 1.5) and second-least (-5.8, -10.5 - 0.9) disadvantaged areas. Dispensing of PPIs and statins in the most remote and disadvantaged areas remained substantially below levels expected for Australia after the 21% co-payments increase. Conclusions. The findings suggest that the 2005 21% in patient co-payments adversely affected prescription medicine use in all areas of Australia and was not specific to remote or disadvantaged areas. Indeed, dispensing of statins fell significantly in all but the most remote and disadvantaged areas, and the existing gap in dispensing of PPIs and statins was not widened by the co-payments increase. PPIs, which are used at above-prevalence rates in Australia and have cheaper over-the-counter substitutes available, were more sensitive to co-payment increases than were statins. What is known about the topic? Despite high levels of chronic illness in geographically remote and socially disadvantaged areas of Australia, prescription medicine use is generally lowest in these areas. In 2005, co-payments for publically subsidised medicines increased by 21%. After this increase, utilisation of many medicines fell at the national level. It is not known whether these falls in utilisation were specific to remote or disadvantaged areas or if decreases occurred across all areas of Australia. What does this paper add? Between 2004 and 2006 PPI dispensing decreased significantly across all remoteness groups (major cities, inner regional, outer regional and remote areas) and statin dispensing fell significantly in all but remote areas. When focusing on disadvantage groups, dispensing of PPIs fell across Australia, and statins fell significantly in all but the most disadvantaged areas. What are the implications for practitioners? The effect of the 2005 21% increase in co-payments was not specific to remote or disadvantaged areas and was associated with decreases in dispensing across Australia.