Patients are set to benefit from a significant drop in the price of many common drugs as a result of changes to be announced in next week's budget.

It is a move which is likely to be popular with patients, but is setting the Federal Government on a collision course with the pharmaceutical industry.

As part of the upcoming budget, the Government is expected to pay out less for generic drugs and direct the money saved toward subsidies on expensive new treatments.

"It's my goal that the overall price of medicines goes down so we can fund new drugs," Health Minister Sussan Ley said.

"We have kept patients and consumers at the table to discuss ways to keep medicines affordable."

For more details, go to: http://www.abc.net.au/news/2015-05-07/generic-drug-prices-expected-to-fall-federal-budget/6452952