Leukaemia experts have welcomed the federal government's move to make a drug that normally costs $187,000 per treatment more easily affordable.
Professor Stephen Mulligan from Sydney's Royal North Shore Hospital called it a "milestone that would be welcomed by patients and their families".
Associate Professor Constantine Tam from the Victorian Comprehensive Cancer Centre said he was "delighted" the drug would finally be affordable.
The breakthrough leukaemia and lymphoma drug Ibrutinib, known as Imbruvica, will cost patients $38.80 a script – or $6.30 for concessional patients - once it is listed on the Pharmaceutical Benefits Scheme from December 1. The government subsidy is worth $460 million, Fairfax Media reports.
The drug will be available to all eligible patients with relapsed or refractory chronic lymphocytic leukaemia (CLL) or small lymphocytic lymphoma (SLL).
Prime Minister Malcolm Turnbull said the drug – considered significantly more effective than many treatments already available through the PBS – will change lives.
"This new medicine provides an important new treatment option for Australian patients and now, thanks to my government's commitment to the PBS, is within reach for hundreds of Australian families," Mr Turnbull said.
Around 1000 Australians are expected to benefit from the drug every year.
The Coalition has added about $7.5 billion worth of medicines to the PBS since gaining government in 2013.
That has included about 60 new cancer drugs.
CLL and SLL are types of cancer that affect white blood cells, which are an important part of the immune system and help protect our bodies against infection and disease.
In people with CLL and SLL, the white cells become malignant and spread uncontrollably. This can make people more susceptible to anaemia, recurrent infections, bruising and bleeding. The diseases are most commonly diagnosed in people over 60 and affects more men than women.
Ibrutinib works by blocking the signals that tell the white cells to multiply and spread uncontrollably.