National Health Act 1953 - Amendment determination under section 85B - price determinations and special patient contributions (No. PB 101 of 2008)

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Legislation au F2008L03760 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 101 OF 2008

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 77 of 2008 which came into effect on 1 August 2008.  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 November 2008, was made on 2 October 2008.

 

 

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 November 2008.

Paragraph 2:  provides that Schedule 1 amends PB 77 of 2008.

Schedule 1:  provides for the following amendments:

 

SCHEDULE 1

 

Alteration of Form 

Tramadol 

From: Tablet containing tramadol hydrochloride 100 mg (sustained release)

To: Tablet (sustained release) containing tramadol hydrochloride 100 mg

 

From: Tablet containing tramadol hydrochloride 150 mg (sustained release)

To: Tablet (sustained release) containing tramadol hydrochloride 150 mg

 

From: Tablet containing tramadol hydrochloride 200 mg (sustained release)

To: Tablet (sustained release) containing tramadol hydrochloride 200 mg

 

Overview

The National Health Act 1953, as amended by the legislative instrument F2008L03760, was enacted to address the need for reliable, timely, and affordable access to a wide range of medicines for Australians through the Pharmaceutical Benefits Scheme (PBS). This Act, overseen by the Parliament of Australia, aims to ensure that pharmaceutical benefits are provided by the Commonwealth in a manner that supports the overall health and well-being of the population. This particular amendment, made in 2008, was introduced to respond to recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC) and to resolve pricing disputes between the Minister and responsible persons for certain pharmaceutical brands. The instrument specifies the procedures for determining the maximum prices and contributions for pharmaceutical items listed on the PBS, ensuring that the pricing mechanisms are fair and effective in providing access to necessary medications.

Scope and Application

The National Health Act 1953 Amendment Determination under section 85B applies to the Pharmaceutical Benefits Scheme (PBS), which ensures Australians have reliable, timely, and affordable access to a wide range of medicines. This Act specifically governs the process of determining the price of pharmaceutical items when the Minister and the responsible person for a brand of pharmaceutical item cannot reach an agreement on the appropriate maximum price for sales to approved pharmacists. The Minister can then determine this price by legislative instrument, which can also cover the circumstances under which the Commonwealth pays the special patient contribution. This legislative instrument, which commenced on 1 November 2008, affects responsible persons with medicines listed on the PBS and provides for the alteration of the form of certain pharmaceutical items, such as the sustained-release tablets of tramadol hydrochloride. The instrument extends the reach of the Act through subordinate legislation, allowing for precise and flexible adjustments to the PBS framework to ensure continued effective operation of the scheme.

Key Provisions

The National Health Act 1953, as amended by the F2008L03760 legislation, pertains to the Pharmaceutical Benefits Scheme (PBS) under Part VII (sections 85 and 85B). The Act mandates that the Commonwealth provide affordable access to a range of medicines for all Australians. The Minister is responsible for declaring drugs and medicinal preparations that are eligible for PBS benefits through legislative instruments. Additionally, the Minister can determine the form, administration, and brand of these pharmaceutical items. In cases where the Minister and the responsible person for a brand cannot agree on the maximum price for sales to pharmacists (section 85AD), the Minister can make a determination under section 85B. This includes setting the appropriate maximum price, the price claimed by the responsible person, and the special patient contribution, which is the difference between these two prices. The Act imposes several obligations on parties involved in the PBS. The Minister must consult with the responsible person if a price agreement cannot be reached, to determine the appropriate maximum price and the special patient contribution. The responsible person, in turn, must provide information and engage in good-faith negotiations to reach an agreement on the maximum price. Failure to comply with these obligations could lead to legal consequences, as the Minister has the authority to make binding determinations if necessary. Under section 85B, any breach of the Minister's determinations regarding the maximum price or the special patient contribution can result in civil or criminal penalties. While the specific penalties are not detailed in the text, it is implied that non-compliance with the Minister's binding determinations could lead to legal action. The Minister's authority to make these determinations is backed by the legislative framework, ensuring that the PBS operates within the bounds set by the Act. The amendments introduced by the F2008L03760 legislation primarily affect the form descriptions of certain drugs listed on the PBS. For instance, the descriptions of Tramadol tablets have been altered to specify the active ingredient and its release form more clearly. These changes are intended to ensure consistency and clarity in the listing of pharmaceutical benefits, aiding both the Minister and the responsible persons in adhering to the Act's requirements. The legislative instrument, which includes these amendments, commenced on 1 November 2008, following its publication on 2 October 2008.

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