EXPLANATORY STATEMENT
National Health Act 1953
Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2014 (No 1)
PB 44 of 2014
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 ready prepared dispensing fee from $6.63 to $6.76 and the extemporaneously prepared dispending fee from $8.67 to $8.80.
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 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 2014.
The Amending Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.