Federal Budget 2026–27

Australia’s 2026–27 Federal Budget landed with a familiar political message on the need for fiscal responsibility amidst a challenging global back drop and the cost-of-living crisis, but beneath the headlines sits a more consequential story for the pharmaceutical sector.

The new Budget signals a government continuing to position healthcare affordability, cheaper medicines and health services as the priority. At the same time, it exposes ongoing tension between fiscal restraint and long-term investment in innovation.

Importantly, the Budget confirmed the addition of the RSV vaccine to the National Immunisation Program for eligible older Australians – but also a $5.9 billion investment into the Pharmaceutical Benefits Scheme (PBS) focused on previous PBS Listings for chronic kidney disease, cystic fibrosis, cancers, and permanent subsidisation of COVID-19 antivirals.

Increased PBS investment is not only positive for patient access, but also for the economy. The Government, however, made it clear there is intensified pressure on expenditure sustainability. As healthcare spending grows alongside hospital funding, urgent care expansion, and aged care commitments, scrutiny around cost-effectiveness and value is sharpening further.

The research and innovation landscape also warrants attention. The Government committed to gradually increasing annual distributions from the Medical Research Future Fund (MRFF) to $1 billion by 2030–31. A commitment was also made to progress the National One Stop Shop, simplifying access to clinical trials for patients and doctors.

For pharma companies operating across clinical research, trials, or translational partnerships, this creates a familiar Australian challenge: strong scientific capability paired with uncertain long-term commercialisation settings.

The broad strategic signals were:

• Preventative health continues gaining political capital, particularly vaccination and chronic disease prevention.
• Affordability remains the dominant healthcare narrative, influencing PBS and pricing policy settings.
• Health system efficiency and integrity are priorities, reflected in Medicare compliance and digital infrastructure investments.

The 2026–27 Budget does not look to reshape the sector, but does reinforce the operating environment likely to define the next several years one where access, affordability, prevention, and cost will dominate policy discussions.

Health Announcement Summary

Therapeutic Access

Vaccines  

• Funding for the adult RSV vaccine (AREXVY) for eligible Australians 75+ and Aboriginal and Torres Strait Islander people 60+ as part of the National Immunisation Program.
• $41.2M to improve vaccination rates amongst children under five by expanding NIP vaccinations in pharmacy.
• $2.8M in 2026–27 to extend the Australian Immunisation Register Gov2Gov data feed to maintain access to critical immunisation data.

Precision Oncology  

• $71M invested in Omico, over three years, to continue the Precision Oncology Screening Platform Enabling Clinical Trials (PrOSPeCT) program giving Australians with advanced or poor prognosis cancer access to comprehensive genomic profiling to identify matches to therapies or clinical trials.

HIV 

• $68.5M over three years from 2026–27 to support elimination of HIV transmission in Australia by 2030 by providing HIV treatment and pre‑exposure prophylaxis (PrEP) to people who are not eligible for Medicare.

Medicines 

• $5.9B over five years for new and amended listings of medicines on the PBS.
• An official commitment was made to begin consultation about making biosimilars the ‘default’ prescription to boost uptake and save the PBS an estimated $1.5B over five years. The government is also expanding streamlined authority to make prescribing easier and to fast-track access.
• $146.8M has been committed to reducing Pharmaceutical and Medicare Benefits compliance and fraud.

Research and Development

• The Medical Research Future Fund (MRFF) disbursements are to increase by $505.2M over four years. Annual funding will rise from $650M to $1B starting 2030.
• National Health and Medical Research Council (NHMRC) is still tracking below inflation, yet the budget allocates:
  • $24.3M over two years to increase operating resources, including conducting a feasibility study for a Research Grant Hub.
  • Funding for the Medical Research Endowment Fund.
• Reforms to clinical trials are to be supported by an $18.8M commitment to progress the National One Stop Shop simplifying access to clinical trials.
• The Department of Industry, Science and Resources will fund access to the world’s largest pooled research fund Horizon Europe.
• A National Resilience and Science Council will be established to better coordinate and align public innovation investments with Australia’s economic objectives as proposed in the Ambitious Australia report.
• $387.4M will go to ensuring financial stability for the Commonwealth Scientific and Industrial Research Organisation (CSIRO) including its Australian Centre for Disease Preparedness.
• Reforms to the Research and Development Tax Incentive to increase business expenditure on R&D.

Healthcare Delivery and Support Services

National Disability Insurance Scheme 

• The NDIS budget will be cut by $36.2B, with an estimated 300,000 participants to be removed over four years.
• As an alternative pathway for support for children under 8 years who present with autism or delayed development, the Commonwealth will create the new $4B Thriving Kids program including national information on child development and autism, GP reviews, and referrals to support.

Primary Care 

• Through the Medicare-subsidised Thriving Kids package, GPs will be able to conduct new Healthy Kids Checks to assess health and development of children at age three.
• A new National Digital Child Health Record (‘digital baby book’) is being introduced.
• 2,000 additional training places for new GPs will be funded through the Australian General Practice Training (AGPT) Program in 2027.
• Six new Urgent Care Clinics will be established. $1.8B has been committed to make UCCs a permanent feature of Australia’s universal healthcare system
• The 33 multidisciplinary Endometriosis and Pelvic Pain Clinics will receive an additional $2.8M.

Medicare 

• A 4.7% increase to the Medicare Levy threshold was announced, with individuals now needing to reach $28,011 and families $47,238 in income before being required to pay.
• Bulk-billing incentives were shown to have achieved an increase of 81.4% on national bulk-billing. The aim is for 90% of all standard GP consults to be bulk-billed by 2030.
• The Government will achieve net efficiencies of $15.3M over five by reversing the decision to reclassify intravitreal eye injection items as out‑of‑hospital items to ensure continued access to affordable intravitreal eye injections.

Hospitals 

• $25B was announced for public hospitals under the renewed National Health Reform Agreement, taking Commonwealth commitment to a record total of $220B up to 2031.

Aged Care 

• The budget contains a $3.7B package for:
  • 5,000 additional aged care beds per year for those with limited means, incentivised through building subsidies and an increase and restructure of the Accommodation Supplement.
  • Expanded End-of-Life pathway to provide more care for palliative patients.
  • 20 additional Specialist Dementia Care Program units and expansion of the Hospital to Aged Care Dementia Support Program.
• Reduced rebate for people over-65 who have private health insurance as part of goal to achieve generational equity and fund some of the new hospital measures.

Preventive Health/Chronic Disease

• $0.2M to establish a Ministerial Expert Panel on Women’s Health, with an initial focus on women’s cardiovascular health.
• $31.1M over three years will support continued national bowel cancer screening for the 45-49 age group.
• $15M will fund the national skin cancer prevention campaign for two more years.
• $598.3M will upgrade My Health Record for two years for improved data sharing between multiple providers for people managing chronic or complex conditions.

Indigenous Health

• Also welcomed is $4.5M to support the Coalition of Peaks secretariat and its work on the National Agreement on Closing the Gap, and $2.7M over three years for an additional cohort of First Nations Health Worker Traineeship for students commencing from 1 January 2026.
• Additionally, substantial funds are dedicated to support families, prevent child removal, continue Birthing on Country, continued renal dialysis services, support for 13YARN and ending Family, Domestic and Sexual Violence for First Nations people.

Emergency Preparedness

• $379M will boost the National Medicines Stockpile over 5 years for critical medicines, PPE and materials in the event of a pandemic or major supply chain disruption.