More than 400 prescription drugs have dropped up to $20 in price, including expensive cancer and cardiovascular disease pills.
Prices for some drugs will drop as much as 60 per cent from this weekend as annual changes to the Pharmaceutical Benefits Scheme take effect.
Health Minister Sussan Ley said there were quadruple the number of changes this year due to reforms passed in 2015.
"Many common medications (will) reduce in price for consumers by as much as $20 per script - some for the first time ever," Ms Ley said on Sunday.
"With one-in-five Australians now living everyday with multiple chronic conditions like heart disease, high blood pressure, eye disease and depression, this could save patients as much as $500 per year."
Patent-protected cancer drugs Lenalidomide and Dasatinib will drop in price, along with Crohns disease drug Adalimumab, and Bosentan, for cardio vascular disease.
Ms Ley said about 370 - or 80 per cent - of patent-protected drugs that have been on the PBS for five years will for the first time get a one-off five per cent price cut, saving taxpayers $1 billion.
More price cuts are coming in October, when price calculations for thousands of common medications will have to reflect the cost of cheaper generic versions - not the expensive premium brands.
"We're also seeing strong take-up of competition reforms introduced as part of the PBS package allowing pharmacists to discount scripts by up to $1," Ms Ley said.
She said the savings meant new drugs could be added to the scheme.
"Since the introduction of these reforms, we have invested more than $3 billion in listing new medicines on the PBS, including breakthrough cures for melanoma, breast cancer and hepatitis C," Ms Ley said.
