Australians are paying almost four times more than the best international prices for a range of prescription drugs, as 6 per cent of patients delay or forgo necessary medication due to cost.

A report recommending changes to drug prices on the taxpayer-funded Pharmaceutical Benefits Scheme says $1.2 billion in potential savings to the health budget have been missed in just the past four years, while recommending changes to restrictions on pharmacy locations and rules to allow pharmacists to administer vaccinations and issue prescription repeats.

The Grattan Institute report calls on the Turnbull government to supplement the PBS price disclosure system, in place since 2007, with a benchmarking against drug prices paid internationally, as exists in Canada, New Zealand and the European Union.

Currently drug companies are required to disclose how much they charge pharmacies for drugs outside patents over 12-month periods. The government calculates the average price after discounts and reduces the amount it pays for each drug accordingly.