National Health Act 1953 - Amendment determination under section 85B - price determinations and special patient contributions (No. PB 23 of 2009)

EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 23 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 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 April 2009, was made on 3 March 2009.

Consultations

This instrument affects responsible persons claiming a higher price than the approved price to pharmacist for sales of a brand of pharmaceutical item listed on the PBS.  Where the responsible person does not agree with the approved price to pharmacist for sales of a brand of pharmaceutical item, the responsible person may claim a higher price of sale, referred to in this instrument as the claimed price.  The claimed price is the responsible person’s price for sales of a brand of pharmaceutical item to approved pharmacists.

Claiming a higher price for sales of a brand of pharmaceutical item is initiated by the responsible person through an application to the Pharmaceutical Evaluation Branch of the Department of Health and Ageing.  When a change to the approved price to pharmacist is initiated by the Minister consultation occurs directly with the responsible person of the brand of pharmaceutical item by mail.

ATTACHMENT

Paragraph 1:  provides that this instrument commences on 1 April 2009.

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

Schedule 1:  provides for the following amendments:

SCHEDULE 1

Alteration of Description of Listed Drug

Brands to which a brand premium no longer applies

Brand to which a special patient contribution no longer applies

SCHEDULE 2

Brand to which a special patient contribution exemption no longer applies