Despite unequivocally worse health, expenditure on Indigenous people through the Pharmaceutical Benefits Scheme (PBS) is considerably less than for other Australians. We report on the effectiveness of a program to supply PBS medicines to remote Aboriginal and Torres Strait Islander Health Services (ATSIHSs) under section 100 (s.100) of the National Health Act 1953.

The program: Under the special PBS arrangements (SPBSAs), approved ATSIHSs are able to order PBS medicine in bulk through local pharmacies and supply them as needed to patients on-site. The usual co-payment associated with PBS medicine is not charged and the pharmacist remuneration structure is different.

Methods: The project involved consultation with the evaluation reference group and other stakeholders at all stages. There were six main data collection components: public submissions; interviews with government and other key stakeholders; pharmacist survey; medicine utilisation and expenditure data; national ATSIHS minimum dataset; and case studies of ATSIHSs.

Results: These SPBSA potentially benefit 36% of the Aboriginal and Torres Strait Islander population. They have resulted in improved access to much-needed medicines, representing an increase of $36.5 million in expenditure on Aboriginal and Torres Strait Islander people through the PBS between 2000/01 and 2002/03. They have further ensured that $8.3 million of State and Territory expenditure formerly directed at medicine can be spent on prevention and primary care.

Conclusion: Overall, the SPBSAs have been very successful and demonstrates an effective model for the development of Indigenous health policy.