National Health Act 1953 - Amendment determination under section 85B (No. PB 64 of 2007)

Administered by Department of Health, Disability and Ageing

Legislation au F2007L02634 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 64 OF 2007

NATIONAL HEALTH ACT 1953

AMENDMENT DETERMINATION UNDER SECTION 85B

 

Purpose and operation

Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.

Subsection 85(1) provides that benefits are to be provided by the Commonwealth in accordance with Part VII in respect of pharmaceutical benefits.

Drugs and medicinal preparations to which Part VII applies are (with the exception of some medicinal preparations with additives) declared by the Minister by legislative instrument to be so under subsection 85(2). These are listed drugs as defined in subsection 84(1). 

The Minister by legislative instrument can determine the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)); the manner of administration of the form of the listed drug so determined (subsection 85(5)); and a brand of the pharmaceutical item (defined in subsection 84(1)) that has the listed drug in that form with that manner of administration (subsection 85(6)).  These determinations govern what constitutes the pharmaceutical benefit (defined in subsection 84(1)) under Part VII of the Act.  Under section 84AF, the Minister may determine a responsible person for a brand of a pharmaceutical item.

Subsection 85B(1) provides that the section applies if the Minister and the responsible person for a brand of pharmaceutical item have been unable to make a price agreement under section 85AD on an amount that is to be taken to be the appropriate maximum price for sales of the brand of pharmaceutical item to approved pharmacists.

Under subsection 85B(2), the Minister may by legislative instrument determine, by reference to a quantity or number of units of a pharmaceutical item, the amount that is taken to be the appropriated maximum price for sales of the brand of the pharmaceutical item to pharmacists.

Under subsection 85B(3), the Minister may by legislative instrument determine, by reference to a quantity or number of units, the amount that is taken to be the price claimed by the responsible person as the responsible person’s price for sales of the brand of the pharmaceutical item to approved pharmacists.

Subsection 85B(4) provides the special patient contribution for the brand of the pharmaceutical item is the difference between the “responsible person’s Commonwealth price” and the “Commonwealth price” for the brand of the pharmaceutical item.  Subsection 85(6) defines these terms to the effect that the Special Patient Contribution is the difference between the Commonwealth price (worked out in accordance with the determination of the Pharmaceutical Benefits Remuneration Tribunal under subsection 98B(1)) based on the amount determined under subsection 85B(2) and what would be the Commonwealth price based on the amount determined under subsection 85B(3).

Under subsection 85B(5), the Minister having made a determination under subsection 85B(3) may by legislative instrument determine the circumstances in which the Commonwealth is to pay the special patient contribution for the brand of the pharmaceutical item.

This legislative instrument in giving effect to recommendations of the Pharmaceutical Benefits Advisory Committee (PBAC) amends the determination under section 85B made by legislative instrument number PB 51 of 2007 which came into effect on 1 August 2007.  The amendments are set out in the items of Schedule 1 to the instrument.

A provision-by-provision description of the instrument is contained in the Attachment.

This instrument, expressed to commence on 1 September 2007, was made on 14 August 2007.

 

Consultations

This instrument affects responsible persons with medicines listed on the PBS.  If the Minister and responsible person cannot enter into a price agreement, consultation occurs between the responsible person and the Commonwealth to determine the price claimed by the responsible person as the responsible person's price for sales of the brand of pharmaceutical item to approved pharmacists.

 


ATTACHMENT

Paragraph 1: provides that this instrument commences on 1 September 2007.

Paragraph 2: provides that Schedule 1 amends PB 51 of 2007.

Schedule 1: provides for the following amendment:

 

SCHEDULE 1

 

Brand to which a brand premium now applies

Ramipril   Tablet 10 mg (Tritace)

 

Overview

The National Health Act 1953, enacted by the Australian Parliament, serves as the legislative foundation for the Pharmaceutical Benefits Scheme (PBS), ensuring Australians have access to affordable medicines. The Act was amended in 2007 to address the issue of price disagreements between the Minister for Health and pharmaceutical companies over the listing of certain medicines on the PBS. This legislative instrument, F2007L02634, was made to amend an earlier determination under section 85B of the Act, which provides mechanisms for resolving price disputes. The policy objective is to maintain the affordability of medicines listed on the PBS while ensuring fair negotiations between the Commonwealth and pharmaceutical companies.

Scope and Application

The F2007L02634 legislative instrument amends the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. This Act governs the Commonwealth's provision of reliable, timely, and affordable access to medicines for all Australians. The amendments pertain specifically to the price determination process for certain pharmaceutical items when the Minister and the responsible person for a brand of pharmaceutical item are unable to agree on an appropriate maximum price for sales to approved pharmacists. The instrument allows the Minister to determine the maximum price based on a quantity or number of units of the pharmaceutical item, as well as the price claimed by the responsible person. Additionally, it addresses the special patient contribution, which is the difference between the Commonwealth price and the responsible person’s price, and sets out the circumstances under which the Commonwealth will pay this contribution. These amendments apply nationally and affect entities responsible for listed pharmaceutical brands on the PBS. The instrument, effective from 1 September 2007, amends the previous determination made under section 85B of the Act, providing detailed adjustments to the pricing framework as recommended by the Pharmaceutical Benefits Advisory Committee (PBAC).

Key Provisions

The National Health Act 1953, as amended, provides the legislative foundation for the Pharmaceutical Benefits Scheme (PBS), which ensures Australians have access to a range of affordable medications (subsection 85(1)). The Act defines listed drugs and their forms and brands (subsections 85(2), 85(3), and 85(6)), which are declared by the Minister through legislative instruments. These declarations determine the pharmaceutical benefits available under the PBS. The Minister can also determine the manner of administration for these drugs (subsection 85(5)) and appoint a responsible person for a pharmaceutical brand (subsection 84AF). The Act imposes obligations on the Minister and responsible persons to negotiate prices for pharmaceutical items. If a price agreement cannot be reached between the Minister and the responsible person (subsection 85AD), the Minister has the authority to determine the maximum price and the special patient contribution (subsection 85B(2) and (4)). The Minister may also determine the circumstances under which the Commonwealth will pay the special patient contribution (subsection 85B(5)). These provisions ensure that prices are negotiated fairly and that patients are not unduly burdened with high costs. Failure to comply with the requirements of the Act can result in legal consequences. For example, if the Minister does not make a determination in accordance with the provisions of section 85B, this may lead to disputes over pricing, potentially resulting in legal challenges. Additionally, responsible persons who do not cooperate in the price determination process or who fail to provide necessary information may face penalties or enforcement actions by the Commonwealth. The specific penalties for breaches are not detailed in the Act but may include fines or other administrative actions as determined by the relevant authorities. In summary, the Act establishes a framework for the PBS, including the declaration of listed drugs, the determination of prices, and the appointment of responsible persons. The Act requires the Minister to engage in negotiations with responsible persons and to make determinations if an agreement cannot be reached. Failure to comply with these provisions may lead to legal or administrative consequences.

Legal classification tags

Area of Law
Health Law
Instrument
Amending Act
Concepts
Definitions & Interpretation
Offence Provisions
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.