Assistant Health Minister Fiona Nash has confirmed a plan to impose a $5 co-payment for prescription drugs remains on the table.

A federal government proposal to impose a $5 co-payment for prescription drugs remains on the table.

Assistant Health Minister Fiona Nash created confusion on Monday when she told a Senate committee the proposal remained government policy, despite Health Minister Sussan Ley having backed away from the plan.

Senator Nash clarified the issues when she appeared before the committee again on Tuesday.

"The savings won't come off the table until a replacement measure is found and so therefore, the measure remains on the table," she said.

Ms Ley had backed away from the proposal to charge general patients a $5 co-payment and concession patients an 80 cent co-payment for prescription drugs.

She conceded she wouldn't be able to get the $1.3 billion savings measure through the Senate, despite it having been included in the federal budget just days earlier.

Senator Nash said a replacement proposal would be announced in the near future but refused to provide a specific timeline.

She also declined to confirm whether or not the alternate savings could potentially be found from further cuts to public hospital funding, saying she would not speculate on the health minister's deliberations.

Health department secretary Martin Bowles also refused to be drawn on whether the savings would come from hospital funding but confirmed the department was looking at alternate savings measures.

"At the end of the day, that will be a decision of government," he said.