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.
Overview
The Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2014 (No 1) was enacted to amend the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2010, ensuring it continues to give effect to the terms of the Fifth Community Pharmacy Agreement between the Australian Government and the Pharmacy Guild of Australia. This agreement, which outlines the manner in which payments to approved pharmacists for the supply of pharmaceutical benefits are to be calculated, is subject to annual indexation adjustments as specified in the agreement. The determination was made by the Pharmaceutical Benefits Remuneration Tribunal under the authority of the National Health Act 1953 and is in consultation with the Pharmacy Guild of Australia, who support the amendment. The purpose of this determination is to revise the dispensing fees for ready-prepared and extemporaneously-prepared pharmaceutical benefits to reflect the agreed indexation adjustments, thereby maintaining the alignment of the Commonwealth price with the terms of the Fifth Agreement.
Scope and Application
The Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Amendment Determination 2014 (No 1) applies to approved pharmacists who supply pharmaceutical benefits under the National Health Act 1953. This Amendment Determination is made pursuant to the authority provided under the Act and aims to ensure the continued implementation of the Fifth Community Pharmacy Agreement between the Australian Government and the Pharmacy Guild of Australia, specifically with respect to the annual indexation adjustment to the dispensing fee for ready-prepared and extemporaneously-prepared pharmaceutical benefits. The Determination revises the dispensing fees in line with the agreed terms of the Fifth Agreement, which is an agreement for the purposes of subsection 98BAA(1) of the Act. The Amendment Determination is effective nationally across Australia and applies to all approved pharmacists who supply pharmaceutical benefits under the Act. There are no exclusions or exemptions outlined in the Determination; however, the application is subject to the terms and conditions of the Fifth Agreement. The Determination is a legislative instrument and its provisions may be further detailed or extended through subordinate instruments.
Key Provisions
The Commonwealth price for pharmaceutical benefits supplied by approved pharmacists is determined in accordance with the National Health Act 1953, specifically under section 98C(1)(a). This determination is based on the Fifth Community Pharmacy Agreement between the Australian Government and the Pharmacy Guild of Australia, which was signed on 3 May 2010. This agreement outlines the remuneration components, including the dispensing fee and special handling fee for extemporaneously-prepared items. Payments to approved pharmacists are calculated according to the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2010, which was implemented to give effect to the terms of the Fifth Agreement. The Pharmaceutical Benefits Remuneration Tribunal is tasked with making determinations that reflect these terms.
The parties involved in this legislation, particularly the Pharmacy Guild of Australia, are required to adhere to the terms of the Fifth Agreement. The Amending Determination of 2014 revises the fees for dispensing ready-prepared and extemporaneously-prepared pharmaceutical benefits, reflecting the annual indexation adjustment as specified in Clauses 10.1 and 10.2 of the Fifth Agreement. This ensures that the payments to approved pharmacists are in line with the agreed-upon indexation rates, which are based on the Wage Cost Index 9 (WCI9). The Amending Determination also stipulates the specific values for the dispensing fees, adjusting them from $6.63 to $6.76 for ready-prepared items and from $8.67 to $8.80 for extemporaneously-prepared items.
There are no explicit offences, penalties, or consequences for breach outlined in the text of the determination itself. However, the Fifth Agreement, which this Amending Determination seeks to uphold, implies that any non-compliance by the Pharmacy Guild of Australia or other parties with the stipulated fees and indexation adjustments could lead to disputes or legal actions under the National Health Act 1953. The Act itself provides for the enforcement of its provisions through the Tribunal and potentially through the courts, but specific penalties are not detailed in the provided text. The legislative framework ensures that the terms of the agreement are adhered to, with the Tribunal playing a crucial role in resolving any disputes that may arise.