EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 50 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 July 2009, was made on 4 June 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 July 2009.
Paragraph 2: provides that Schedule 1 amends PB 118 of 2008.
Schedule 1: provides for the following amendments:
SCHEDULE 1
Brands deleted
Enalapril | Tablet containing enalapril maleate 10 mg (Amprace 10) Tablet containing enalapril maleate 20 mg (Amprace 20) |
Overview
The National Health Act 1953 Amendment Determination (F2009L02290), enacted in 2009, addresses the issue of determining appropriate pricing for pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) when the Minister and the responsible person for a brand of pharmaceutical item are unable to reach a price agreement. This instrument, made by the Minister for Health, is intended to provide a mechanism for setting the maximum price for sales of a brand of pharmaceutical item to approved pharmacists and to establish the special patient contribution for such sales. The policy objective is to ensure reliable, timely, and affordable access to medicines for all Australians while managing the cost of pharmaceutical benefits under the PBS.
This amendment to the National Health Act 1953 follows recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC) and updates the determination made by legislative instrument number PB 118 of 2008. It specifies changes to the approved price to pharmacists for certain brands of pharmaceutical items listed on the PBS, including the deletion of certain brands and the introduction of new determinations for the appropriate maximum price and the special patient contribution. The instrument is designed to come into effect on 1 July 2009, as made on 4 June 2009, and it involves consultation with responsible persons who may claim a higher price for sales of a brand of pharmaceutical item.
Scope and Application
The National Health Act 1953 Amendment Determination under section 85B, instrument number PB 50 of 2009, pertains to the Pharmaceutical Benefits Scheme (PBS), which is the legislative foundation for the Commonwealth's provision of affordable and accessible medicines to Australians. This instrument amends the previously established determination under section 85B, effective from 1 July 2009, and applies to pharmaceutical items listed on the PBS, specifically those brands where the Minister and the responsible person are unable to agree on the appropriate maximum price for sales to pharmacists. The Act applies to entities and individuals involved in the sale and administration of these pharmaceutical items, encompassing the pharmaceutical industry and healthcare providers. The Minister can make determinations regarding the form, administration, and brand of pharmaceutical items, thereby defining what constitutes a pharmaceutical benefit under the Act. Furthermore, this instrument allows the Minister to establish the maximum price for sales to pharmacists and the special patient contribution, which is the difference between the Commonwealth price and the responsible person’s claimed price. The instrument also extends its application through subordinate instruments, which may provide further details and specifications regarding the implementation of the Act.
Key Provisions
The key operative sections of the F2009L02290 Amendment Determination under the National Health Act 1953 are primarily concerned with the amendments to the Pharmaceutical Benefits Scheme (PBS). Section 85B(2) allows the Minister to determine the maximum price for sales of a brand of pharmaceutical item to pharmacists, while subsection 85B(3) permits the Minister to determine the amount claimed by the responsible person as their price for sales of the brand to approved pharmacists. Subsection 85B(4) defines the special patient contribution as the difference between the Commonwealth price and the responsible person's price. Subsection 85B(5) enables the Minister to determine the circumstances under which the Commonwealth will pay the special patient contribution. These provisions are designed to ensure that the PBS provides reliable, timely, and affordable access to a wide range of medicines for all Australians.
The obligations and requirements imposed by this Act on the parties or entities it governs are primarily focused on the responsible person for a brand of pharmaceutical item. If the Minister and the responsible person are unable to reach an agreement on the appropriate maximum price for sales of the brand to approved pharmacists, the Minister can make a determination under section 85B. The responsible person must then comply with the Minister's determination regarding the maximum price and any special patient contribution. Additionally, the responsible person must initiate any claim for a higher price through an application to the Pharmaceutical Evaluation Branch of the Department of Health and Ageing, and any consultation regarding changes to the approved price must occur directly with the responsible person.
The Act also outlines the consequences for breach of its provisions. While the Explanatory Statement does not explicitly mention any specific offences, penalties, or civil/criminal consequences for breach, it is likely that any failure to comply with the Minister's determinations under section 85B could result in legal action. The specific penalties would depend on the nature of the breach and could potentially include fines or other civil penalties. It is important to note that the Act is subject to interpretation by the courts, and any breaches could have significant legal and financial consequences for the responsible person.