A ground-breaking HIV prevention drug has been approved for taxpayer subsidy in Australia — marking a major milestone in the four decades long battle against HIV and AIDS.

PrEP or pre-exposure prophylaxis has been recommended for listing on the Pharmaceutical Benefits Scheme by a panel of experts.

The Federal Health Minister Greg Hunt previously promised government funding for the drug if approved by the committee.

The decision is expected to see the over-the-counter cost of the drug drop from up to $1,000 to about $40.

Victorian AIDS Council CEO Simon Ruth said it should be available by the middle of the year from any doctor or pharmacy.

"We've been campaigning on this for the last four years, it is the most effective treatment we know of against HIV," he said.

Fifteen thousand Australians are already taking PrEP, through trials funded by state governments and health organisations.

Michael Whelan said his "immense fear" about getting HIV has vanished since taking PrEP. ( ABC News: James Hancock )

Michael Whelan, 30, of Melbourne, was one of the early adopters.

He started taking PrEP daily more than four years ago and initially imported the drug online for about $120 a month.

He said the pill removed anxiety and fear around having gay sex.

"Every time I went for my sexual health screening I would be shaking, sweating, I had this immense fear that at some point I would become HIV positive," he said.

PrEP, in addition to using condoms, has made Michael Whelan's sex life more enjoyable.

"I know that no matter what happens, if condoms break, if they fall off — when I enter that bedroom I know that I am going to be protected no matter what," he said.

Dr Edwina Wright said the advent of PrEP was bittersweet for older generations. ( ABC News: James Hancock )

Edwina Wright from Alfred Health is overseeing a Victorian trial of the drug which has up to 1,000 people on a waiting list for subsidised access.

About 30,000 Australians are eligible to take PrEP, such as gay or bisexual men and injecting drug users, she said.

"PrEP is considered to be about 99 per cent effective in reducing HIV transmission," Dr Wright said.

"Alas it doesn't appear to be 100 per cent and a small number of people, even though they're taking the medication regularly, may still acquire HIV."

Best chance to eliminate HIV

But Dr Wright said widespread use of the drug locally and overseas had been credited with helping drive down HIV infection rates.

"We've certainly seen significant declines in new HIV infections in San Francisco and New York and also Sydney," she said.

"Part of the formula, it looks like for that success, has been the widespread introduction of PrEP."

A New South Wales study involving more than 8,000 participants has witnessed a massive decline in HIV infections.

Professor Andrew Grulich from the Kirby Institute at the University of New South Wales said in just a year, there was a 30 per cent drop in new infections.

"That is unprecedented," he said.

"PrEP gives us the best chance we have ever had to eliminate HIV."

Dr Wright said the introduction of PrEP was a huge development in the long struggle to combat HIV and AIDS.

But she said older generations who suffered through the 1980s AIDS crisis would have mixed feelings about drug.

"There's a lot of celebration but I think sometimes it's a little bittersweet," she said.

"Imagine if PrEP had been available in the 1980s or early 1990s."

The existing use of PrEP has partly been blamed for a rise in sexually transmitted infections in Australia, such gonorrhoea and infectious syphilis.

Professor Grulich said a greater effort was now needed to encourage gay and bisexual men to get tested and treated.

"PrEP involves visiting a doctor," he said.

"Doctors should be reinforcing to patients that PrEP does not prevent all STIs, it only prevents HIV."