EXPLANATORY STATEMENT
National Health Act 1953
Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2013 (No 1)
PB 32 of 2013
Authority
Paragraph 98C(1)(a) of the National Health Act 1953 (the Act) provides the manner in which the Commonwealth price for pharmaceutical benefits is to be determined for payments to approved pharmacists for the supply of pharmaceutical benefits.
Payments are calculated in accordance with the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2010 (the Principal Determination). The manner in which these payments are calculated is in accordance with the Fifth Community Pharmacy Agreement (the Fifth Agreement) between the Australian Government and the Pharmacy Guild of Australia. The Pharmaceutical Benefits Remuneration Tribunal (the Tribunal) makes a determination pursuant to paragraph 98B(1)(a) of the Act to give effect to the terms of the Fifth Agreement with respect to the value of the dispensing fee to approved pharmacists for the supply of pharmaceutical benefits.
Purpose
This Amending Determination amends the Principal Determination to ensure that the Determination continues to give effect to the terms of the Fifth Agreement with respect to the annual indexation adjustment to the dispensing fee for ready-prepared and extemporaneously-prepared pharmaceutical benefits as determined by the Tribunal.
Clauses 10.1 and 10.2 of the Fifth Agreement specify that the stated value for the Dispensing Fee (Ready Prepared) of $6.42 will be first indexed on 1 July 2012 and thereafter on 1 July each year for the term of the Agreement. Clause 22.3(a) of the Fifth Agreement states that the Index is Wage Cost Index 9 (WCI9). Appropriate to clause 10.1 of the Fifth Agreement, the Dispensing Fee (Extemporaneously Prepared) comprises the base ready prepared dispensing fee plus the extemporaneously prepared Special Handling Fee of $2.04.
The Amending Determination revises the Dispensing fees from $6.52 to $6.63 and from $8.56 to $8.67.
Background
Paragraph 98B(1)(a) of the Act provides that a function of the Tribunal is to determine the manner in which the Commonwealth price for all or any pharmaceutical benefits is to be determined for the purpose of payments to approved pharmacists for the supply of pharmaceutical benefits.
Subsection 98BAA(1) of the Act requires that, where the Minister (acting on behalf of the Commonwealth) and the Pharmacy Guild of Australia (or another pharmacists’ organisation representing a majority of approved pharmacists) enter into an agreement relating to the manner in which the Commonwealth price for pharmaceutical benefits is to be ascertained, the Tribunal, when making a determination pursuant to paragraph 98B(1)(a) of the Act, is to give effect to the terms of that agreement.
The Fifth Agreement between the Australian Government and the Pharmacy Guild of Australia, signed on 3 May 2010 and due to expire on 30 June 2015, is an agreement for the purposes of subsection 98BAA(1) of the Act. Part 2 of the Fifth Agreement sets out an agreement about the manner in which it is intended the Commonwealth price for pharmaceutical benefits is to be ascertained.
Clause 10 of the Fifth Agreement describes the types and values of the Commonwealth price and other payments for a range of remuneration components including the dispensing fee and special handling fee for extemporaneously prepared items, for the purposes of section 98B(1) of the Act.
The Principal Determination commenced on 1 July 2010 and gives effect to the terms of the Fifth Agreement with respect to calculations for the Commonwealth price for payments to approved pharmacists for the supply of ready-prepared and extemporaneously-prepared pharmaceutical benefits. A copy of the Fifth Community Pharmacy Agreement between the Commonwealth of Australia and the Pharmacy Guild of Australia is available from the Department of Health and Ageing website at: www.health.gov.au
Consultation
This Amending Determination has been made in consultation with the Pharmacy Guild of Australia, an organisation representing a majority of approved pharmacists. The Pharmacy Guild of Australia is a party to the Fifth Agreement and supports this Amending Determination.
The Amending Determination commences 1 July 2013.
The Amending Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Overview
The Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2013 (No 1) was enacted to align the Commonwealth price for pharmaceutical benefits supplied by approved pharmacists with the terms of the Fifth Community Pharmacy Agreement (Fifth Agreement) between the Australian Government and the Pharmacy Guild of Australia. This Amending Determination addresses the need to index the dispensing fees for ready-prepared and extemporaneously-prepared pharmaceutical benefits, as stipulated in clauses 10.1 and 10.2 of the Fifth Agreement. The purpose of this legislation is to ensure that the payments made to approved pharmacists reflect the agreed annual indexation adjustments, which are determined by the Pharmaceutical Benefits Remuneration Tribunal in accordance with the Wage Cost Index 9 (WCI9). This determination was made by the Commonwealth of Australia under the authority of the National Health Act 1953 and has the support of the Pharmacy Guild of Australia.
Scope and Application
The National Health Act 1953 Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2013 (No 1) applies to the calculation of payments to approved pharmacists for the supply of pharmaceutical benefits in Australia. The Act concerns the Commonwealth price for these benefits, which is determined through a process involving the Pharmaceutical Benefits Remuneration Tribunal and agreements between the Australian Government and pharmacists’ organisations, such as the Pharmacy Guild of Australia. The Amendment Determination revises the dispensing fees for ready-prepared and extemporaneously-prepared pharmaceutical benefits as stipulated in the Fifth Community Pharmacy Agreement. This Act operates on a national level, applying across all states and territories in Australia, as it is an amendment to a Commonwealth Act. There are no specific exclusions or exemptions mentioned in the text, but the Act's application is contingent upon the terms of the relevant agreements and the determinations made by the Tribunal. The determination is effective from 1 July 2013, and the process of setting the Commonwealth price can be further detailed through subordinate instruments as needed.
Key Provisions
The main sections of the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2013 (No 1) (the Determination) amend the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2010 (the Principal Determination). The Determination modifies the dispensing fees for ready-prepared and extemporaneously-prepared pharmaceutical benefits as specified in the Fifth Community Pharmacy Agreement (the Fifth Agreement) between the Australian Government and the Pharmacy Guild of Australia. Specifically, section 1 of the Determination amends the Principal Determination to reflect the annual indexation adjustment to the dispensing fee as outlined in clauses 10.1 and 10.2 of the Fifth Agreement. The indexation is based on the Wage Cost Index 9 (WCI9). As a result, the dispensing fee for ready-prepared items increases from $6.52 to $6.63 and for extemporaneously-prepared items from $8.56 to $8.67.
The Determination imposes obligations on approved pharmacists and the Commonwealth to adhere to the revised dispensing fees as stipulated in the Fifth Agreement. Approved pharmacists are required to ensure they charge the correct fees for pharmaceutical benefits supplied, while the Commonwealth must make payments based on these amended fees. The Pharmaceutical Benefits Remuneration Tribunal is responsible for making the determination in line with the Fifth Agreement terms, ensuring that the fees reflect the indexation adjustments as agreed upon by the parties.
There are no explicit offences, penalties, or civil/criminal consequences detailed within the Determination itself. However, non-compliance with the terms of the Fifth Agreement and the Determination may result in disputes regarding payments, which could potentially be resolved through the Tribunal or other relevant legal mechanisms. It is important for both parties to adhere to the agreed-upon terms to avoid any discrepancies in the payment process. The maximum penalties for non-compliance with the National Health Act 1953 or the Fifth Agreement would be determined by the relevant courts and may include fines or other civil remedies.