Consumers will pay up to 50 per cent less for many common medicines under changes to the Pharmaceutical Benefits Scheme to be announced by Health Minister Sussan Ley on Wednesday.

The changes are also expected to save the budget about $3 billion over five years by encouraging consumers to choose cheaper, identical generic versions of off-patent drugs and less expensive similar drugs.

Health Minister Sussan Ley. Credit:Andrew Meares

Ms Ley will introduce legislation to enact the changes on Wednesday after inking five-year deals with the Pharmacy Guild and the Generic Medicines Industry Association. Negotiations with the patented medicines industry, represented by Medicines Australia, were still underway on Tuesday night, but it is understood Ms Ley is determined to also implement changes to how patented drugs are priced, with or without the industry's agreement, given these are the most expensive drugs on the PBS.

Fairfax Media understands that for the first time, the government will demand price reductions on patented drugs for which there is only one brand.