The Australian healthcare system's pricing of medical devices is a complex and contentious issue, with far-reaching implications for patients, healthcare providers, and the economy. The Prescribed List, a little-known price-setting schedule, dictates what private health funds must pay hospitals for over 10,000 medical devices, from pacemakers to surgical staples. This system has been criticized for locking in prices that are significantly higher than those in other countries, leading to increased costs for patients and higher insurance premiums.
The deal made by then-health minister Greg Hunt in 2022, which locked 14 million privately insured Australians into paying some of the highest prices in the world for surgical hardware, is at the heart of this controversy. The agreement, which was endorsed by Hunt's successor, Mark Butler, despite initial departmental advice to the contrary, has been criticized for benefiting industry over the Australian community. The Prescribed List sets prices that are often far higher than those in public hospitals, with private health funds paying up to three times more for surgical hardware than overseas patients.
Health economist Stephen Duckett argues that this system isolates medical device manufacturers from normal commercial competition, forcing policyholders to subsidize corporate profits. He describes it as a 'legalized transfer of wealth' from Australians paying private health insurance premiums to multinational device companies. The latest figures from the Australian Prudential Regulation Authority show that private health funds paid $2.52 billion for medical devices in the year to March 2026, a 3.2% increase on the previous year, while private hospital admissions grew at just 1.8%.
The Medical Technology Association of Australia, which represents the medical devices industry, argues that the premiums charged by private health insurers are too high, and that when device companies drop their prices, insurers simply pocket the difference rather than dropping insurance premiums. However, internal Department of Health documents show that public servants formally refused to endorse Hunt's agreement in 2022, warning of unmitigated financial risks and uncosted concessions. The deal has been criticized for not providing a negotiated balance of benefits to industry and the Australian community.
A federal government review of the agreement last year found that while prices for medical devices had fallen after Hunt's deal, total outlays stayed high, partly because hospitals used more devices per procedure. Official evaluation data reveals severe price gaps between Australia and health systems in New Zealand, Britain, and France across many medical devices, including defibrillators, artificial joints, and pacemakers. The Prescribed List agreement has been described as locking in prices for medical devices in the private system that are consistently 7 to 20% higher than public prices, with some examples of devices being up to 358% higher than prices paid in New Zealand for an identical product.
The latest figures from the Australian Prudential Regulation Authority show that private health funds paid $2.52 billion for medical devices in the year to March 2026, a 3.2% increase on the previous year, while private hospital admissions grew at just 1.8%. The medical devices industry argues that the premiums charged by private health insurers are too high, and that when device companies drop their prices, insurers simply pocket the difference rather than dropping insurance premiums. However, the report from the Nous Group, commissioned by the government to review Hunt's changes, concluded that despite administrative benchmark changes reducing prices by up to $1.17 billion, the Prescribed List set prices were still significantly higher than prices in comparable markets.
In conclusion, the pricing of medical devices in Australia is a complex and contentious issue, with far-reaching implications for patients, healthcare providers, and the economy. The Prescribed List system has been criticized for locking in prices that are significantly higher than those in other countries, leading to increased costs for patients and higher insurance premiums. The deal made by then-health minister Greg Hunt in 2022 has been criticized for benefiting industry over the Australian community, and the medical devices industry argues that the premiums charged by private health insurers are too high. The government has been urged to review the potential role of international benchmarking in benefit setting to address these concerns.
