How much do we spend on prescription medicines? Out-of-pocket costs for patients in Australia and other OECD countries

Anna Kemp, David B. Preen, John Glover, James Semmens, Elizabeth E. Roughead

Research output: Contribution to journalArticlepeer-review

19 Citations (Scopus)


Objectives. To determine changes in out-of-pocket expenditure on prescription medicines for Australian patients, and how patient expenditure compares with other Organisation for Economic Co-operation and Development (OECD) countries. Methods. We examined out-of-pocket expenditure on prescription medicines by patients in Australia between 1970 and 2007, and between Australia and 15 other OECD countries (Canada, Czech Republic, Denmark, Finland, France, Germany, Japan, Republic of Korea (South Korea), Luxembourg, Poland, Slovak Republic, Spain, Sweden, Switzerland and the United States) in 2005. Findings. Spending on publicly subsidised medicines by Australian patients increased from $16 per person in 1971 to $62 in 2007. Patient expenditure on all prescription medicines had risen to $134 per person in 2007. Out-of-pocket expenditure for Australian patients ranked 4th of 14 OCED countries with universal pharmaceutical subsidies. Australian patients pay 28% of national pharmaceutical expenditure; more than patients in South Korea (27%), Slovak Republic (26%), Sweden (22%), France, Luxembourg, Japan and Switzerland (17%), Germany (15%), Czech Republic (11%) and Spain (6%), but less than patients in Finland (36%), Denmark (33%) and Poland (34%). Conclusions. Compared to other OECD countries, Australian out-of-pocket costs are now in the mid to upper range. Further increases have the potential to significantly affect access to care. What is known about the topic? In Australia and internationally, increases in the portion of prescription medicines paid by patients have been associated with falls in utilisation. Despite the pharmaceutical subsidies patients receive under the Australian Pharmaceutical Benefits Scheme, prescription medicine costs are a barrier to access for many low income, elderly and other vulnerable patients. What does this paper add? The findings demonstrate that the prescription medicine expenditure of Australian patients has increased substantially over recent years, and is double that indicated by benefit-paid data alone. Out-of-pocket expenditure in Australia is moderate-to-high by international standards. What are the implications for practitioners? Patient out-of-pocket expenditure for prescription medicines in Australia has increased in recent decades, accounting for higher proportions of household and national medicine expenditure. Lack of patient involvement in treatment decisions is associated with patients forgoing medicines due to costs. Practitioners are encouraged to discuss treatment decisions, cost-barriers and possible strategies to overcome cost-barriers with their patients.

Original languageEnglish
Pages (from-to)341-349
Number of pages9
JournalAustralian Health Review
Issue number3
Publication statusPublished - 5 Sept 2011
Externally publishedYes


  • international comparison
  • pharmaceutical expenditure
  • private expenditure


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