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

Overview

The National Health Act 1953 Amendment Determination Instrument (PB 23 of 2009) was enacted to amend the Pharmaceutical Benefits Scheme (PBS) as part of the legislative framework for the PBS. This instrument addresses issues related to pricing agreements between the Minister for Health and the responsible persons for pharmaceutical brands listed on the PBS. The problem it was introduced to address is the inability of the Minister and the responsible persons to reach an agreement on the maximum price for sales of certain pharmaceutical brands to approved pharmacists. The instrument was enacted by the Australian Parliament to ensure that the PBS remains a reliable, timely, and affordable source of medicines for all Australians. The policy objective is to provide a fair and equitable system for determining the prices of pharmaceutical brands on the PBS, thereby ensuring that the PBS continues to provide affordable access to medicines for patients. This legislative instrument amends a previous determination made in 2008, updating the list of pharmaceutical brands with brand premiums and special patient contributions, as well as altering the description of certain listed drugs. It provides for the application of brand premiums and special patient contributions to certain pharmaceutical brands, as well as the removal of brand premiums and special patient contributions for other brands. The instrument aims to provide a fair and equitable system for determining the prices of pharmaceutical brands on the PBS, ensuring that the PBS continues to provide affordable access to medicines for patients.

Scope and Application

The National Health Act 1953 Amendment Determination under section 85B aims to regulate the pricing of pharmaceutical benefits listed under the Pharmaceutical Benefits Scheme (PBS). This instrument applies to entities responsible for the sale of brands of pharmaceutical items listed on the PBS, specifically targeting those brands for which the Minister and the responsible person have been unable to reach a price agreement under section 85AD. The legislation provides the Minister with the authority to determine the appropriate maximum price for these pharmaceutical items through legislative instruments. It also outlines the circumstances under which the Commonwealth is to pay the special patient contribution, which is the difference between the Commonwealth price and the responsible person's price. This Act applies nationally, impacting the pharmaceutical industry and entities involved in the sale of listed drugs. Notably, the Act does not apply to medicinal preparations with additives, as they are excluded under subsection 85(2). The Act allows for its application to be extended or restricted through subordinate instruments, which may include further determinations on drug forms, administration methods, and specific brand pricing.

Key Provisions

The main operative sections of the F2009L01120 Amendment Determination pertain to the Pharmaceutical Benefits Scheme (PBS) under Part VII of the National Health Act 1953. Section 85(1) mandates that pharmaceutical benefits are to be provided by the Commonwealth in accordance with Part VII, while subsection 85(2) allows the Minister to declare drugs and medicinal preparations as listed drugs by legislative instrument. The Minister can further determine the form of listed drugs by reference to strength, type of unit, size of unit or otherwise under subsection 85(3), the manner of administration under subsection 85(5), and the brand of the pharmaceutical item under subsection 85(6). If the Minister and the responsible person for a brand of pharmaceutical item cannot agree on the appropriate maximum price under section 85AD, the Minister can determine this price under section 85B(2), and the special patient contribution under section 85B(4). The Act imposes several obligations and requirements on the parties it governs. The Minister must declare drugs and medicinal preparations as listed drugs by legislative instrument under subsection 85(2) and determine the form of listed drugs, manner of administration, and brand under subsections 85(3), 85(5), and 85(6) respectively. The Minister must also determine the appropriate maximum price for sales of a brand of pharmaceutical item to pharmacists under section 85B(2) and the special patient contribution under section 85B(4) if the responsible person and the Minister cannot agree on the appropriate maximum price under section 85AD. Responsible persons must comply with the price determinations made by the Minister and submit any claims for a higher price to the Pharmaceutical Evaluation Branch of the Department of Health and Ageing. There are no explicit offences, penalties, or civil/criminal consequences for breach of the provisions in this legislation. However, non-compliance with the price determinations made by the Minister could lead to legal disputes or disputes between the responsible person and the Commonwealth. Additionally, if the Minister determines a special patient contribution, the responsible person may be required to refund the special patient contribution if it is found that the contribution was not justified. The consequences of such a determination would depend on the specific circumstances of the case.