Medicine prices could be slashed by up to a half from next year if government proposals pass through the Senate.
The cost of more than 2000 brands could drop instantly from October next year with more to follow, Health Minister Sussan Ley says.
Reforms to the Pharmaceutical Benefits Scheme, including improvements to generic medicine prices, will go before the Senate next week.
Ms Ley said the prices could be reduced by removing the premium brand from price calculations, so only generic brand costs are taken into account.
"In just over 12 months' time patients could be seeing the price of their everyday medications fall by as much as $60 to $250 per year if our proposed reform package passes the Senate this week," she said.
Changes to pricing will affect about 170 medications, including those used to treat cholesterol, heart conditions, high blood pressure and depression.
Taxpayers will also save about $2 billion a year through reduced need for PBS subsidies, Ms Ley said.
