Objectives: To determine the validity of two medication‐based co‐morbidity indices, the Medicines Disease Burden Index (MDBI) and Rx‐Risk‐V in the Australian elderly population. Methods: In Phase I, the sensitivity and specificity of both indices were determined in 767 respondents from wave 6 of the Australian Longitudinal Study of Ageing (ALSA). Medication‐defined index disease categories were compared to self‐reported medical conditions. Correlation with self‐rated health was examined and Cox proportional hazards models were used to assess the predictive validity for mortality. Phase II verified the predictive ability of Rx‐Risk‐V in a sample of 213,191 veterans from Australian Department of Veterans' Affairs (DVA) database. Results: MDBI and Rx‐Risk‐V scores could be calculated for 28% and 73% of the ALSA sample respectively. Both indices had high specificities and low to moderate sensitivities compared to self‐reported medical conditions. Total weighted scores were significantly related to self‐rated health (p<0.001). Both indices were predictive of mortality (Hazard Ratio (HR) =3.690 (95% CI 2.264‐6.015) for MDBI and HR 1.079 (95% CI 1.045‐1.114) for Rx‐Risk‐V. The predictive validity for mortality of Rx‐Risk‐V was confirmed using DVA data (HR= 1.090, 95% CI 1.088‐1.092). Conclusions: Medication‐based co‐morbidity indices Rx‐Risk‐V and MDBI are valid measures of co‐morbidity. However, Rx‐Risk‐V detects more comorbidity in the Australian elderly population and is likely to be a more suitable index to use in administrative datasets, particularly where studies include large numbers of outpatients.