Health Minister Sussan Ley has conceded the government won't get a $1 billion budget saving on subsidised medicines through parliament.
The 2014 budget measure - which the government stood by in its second budget released a week ago - raises the safety net for general patients by 10 per cent above CPI each year over four years.
The changes, which were originally earmarked to start in January this year, would have meant general patients pay $5 more in subsidised PBS prescriptions and concessional patients would pay 80 cents more.
Ms Ley told reporters in Melbourne on Thursday the measure was not going to pass parliament despite talks with crossbench senators.
"I am not going to waste time putting things through the parliament that are going to be voted down by my colleagues," the minister said.
She said she would find a way to save the $1 billion elsewhere in her portfolio.
Over the past decade the cost of the Pharmaceutical Benefits Scheme has risen by 80 per cent.
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