The medicines regulator has placed new restrictions on oral ivermectin, which has been falsely promoted on social media as a treatment for COVID-19.
Health officials said on Friday there had been a three to four-fold increase in the dispensing of ivermectin prescriptions in recent months.
This had led to national and local shortages for those who need the medicine for scabies and parasite infections.
"It is believed that this is due to recent prescribing and dispensing for unapproved uses, such as COVID-19," the Therapeutic Goods Administration said in a statement.
GPs are now only able to prescribe ivermectin for TGA-approved conditions - scabies and certain parasitic infections.
Certain specialists including infectious disease physicians, dermatologists, gastroenterologists and liver disease specialists will be permitted to prescribe ivermectin for other unapproved indications if they believe it is appropriate for a particular patient.
The TGA is concerned people who take the drug may then choose not to be tested for COVID-19 or seek medical care if they get symptoms.
As well, high doses of ivermectin can lead to severe nausea, vomiting, dizziness, seizures and coma.
There is only one TGA approved oral ivermectin product, Stromectol ivermectin 3mg tablet blister pack, which is used to treat river blindness, threadworm of the intestines and scabies.