National Health Act 1953 - Amendment determination under section 85B - price determinations and special patient contributions (No. PB 121 of 2009)

Administered by Department of Health, Disability and Ageing

Legislation au F2009L04563 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 121 OF 2009

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 118 of 2008 which came into effect on 1 December 2008. 

The amendment provides for the deletion of brands of pharmaceutical items where a special patient contribution no longer applies. 

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 January 2010, was made on 4 December 2009.

Consultations

This instrument affects certain 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 and thereafter the Minister determines the price in relation to the relevant brand of pharmaceutical item and determines 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 January 2010.

Paragraph 2: provides that Schedule 1 amends PB 118 of 2008.

Schedule 1: provides for the following amendments:

 

SCHEDULE 1

 

Deletion of Listed Drug

Clomiphene [special patient contribution no longer applies]

Deletion of Brands

Diazepam  Tablet 2 mg (Ducene)

Tablet 5 mg (Ducene)

Overview

The National Health Act 1953, as amended by F2009L04563, aims to ensure reliable, timely, and affordable access to a wide range of medicines for all Australians through the Pharmaceutical Benefits Scheme (PBS). This amendment, enacted by the Australian Government, addresses the problem of unresolved price agreements between the Minister and responsible persons regarding the pricing of certain pharmaceutical items listed on the PBS. Under section 85B, where an agreement on the appropriate maximum price cannot be reached, the Minister is empowered to make a determination to resolve the dispute. This instrument amends the previous determination made in PB 118 of 2008 by removing brands of pharmaceutical items for which a special patient contribution no longer applies. The policy objective is to streamline the PBS by ensuring that only necessary and applicable special patient contributions are in effect, thereby maintaining the efficiency and effectiveness of the scheme.

Scope and Application

The National Health Act 1953 Amendment Determination under section 85B applies to the Pharmaceutical Benefits Scheme (PBS) and governs the pricing of pharmaceutical items listed under the Act. The Act applies to the Commonwealth and entities involved in the sale of pharmaceutical items to approved pharmacists, including pharmaceutical companies and brands of medicines listed on the PBS. The geographic reach of this Act is national, as it pertains to the Commonwealth’s provision of pharmaceutical benefits across Australia. The instrument excludes certain medicinal preparations with additives from its scope. The Act allows for the Minister to extend or restrict its application through subordinate instruments, including determining the maximum price for sales of pharmaceutical items to pharmacists, the price claimed by the responsible person, and the special patient contribution. This legislative instrument, effective from 1 January 2010, amends a previous determination by removing brands of pharmaceutical items where a special patient contribution no longer applies.

Key Provisions

The main operative sections of this legislation, particularly sections 85(1), 85(2), and 85B, establish the framework for the Pharmaceutical Benefits Scheme (PBS) and outline the process for determining the maximum price of pharmaceutical items when an agreement cannot be reached between the Minister and the responsible person for a brand of pharmaceutical item. Section 85(1) stipulates that the Commonwealth must provide pharmaceutical benefits in accordance with the PBS. Section 85(2) allows the Minister to declare drugs and medicinal preparations as listed drugs through a legislative instrument, with the exception of some medicinal preparations with additives. Section 85B(1) enables the Minister to determine the maximum price for sales of a brand of pharmaceutical item to approved pharmacists if an agreement cannot be reached with the responsible person, as per section 85AD. The Minister may also determine the price claimed by the responsible person under section 85B(3). The Act imposes several obligations on the parties involved. The Minister must engage in consultations with the responsible person and determine the maximum price of a pharmaceutical item if a price agreement cannot be reached. The responsible person, who is the entity responsible for a brand of pharmaceutical item, must cooperate in the consultation process with the Minister. Additionally, the Pharmaceutical Benefits Advisory Committee (PBAC) must provide recommendations to the Minister regarding the PBS, including any changes to the special patient contribution for certain brands of pharmaceutical items. The Act also outlines the consequences for non-compliance. Although the legislation does not explicitly state specific offences, penalties, or civil/criminal consequences for breaches, it is likely that failure to adhere to the provisions of the Act and the determinations made by the Minister could result in legal action or administrative penalties. The maximum penalties, however, are not specified within the text provided. The enforcement of these provisions would typically be carried out by the relevant authorities under the overarching legal framework of the National Health Act 1953. This could involve fines, corrective measures, or other administrative actions to ensure compliance with the PBS and the determinations made regarding pharmaceutical prices and contributions.

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