EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 53 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 91 of 2007 which came into effect on 1 December 2007. 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 June 2008, was made on 1 May 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 June 2008.
Paragraph 2: provides that Schedule 1 amends PB 91 of 2007.
Schedule 1: provides for the following amendments:
SCHEDULE 1
Listed drug deleted
Hydrochlorothiazide with Amiloride
Overview
The National Health Act 1953, as amended by the legislation F2008L01385, addresses the legislative basis of the Pharmaceutical Benefits Scheme (PBS) to ensure reliable, timely, and affordable access to medicines for all Australians. The Act, enacted by the Parliament of Australia, is fundamental in facilitating the Commonwealth's provision of pharmaceutical benefits. This particular amendment, introduced on 1 May 2008, aims to update the Pharmaceutical Benefits Schedule by modifying the determinations under section 85B, specifically addressing price disagreements between the Minister and the responsible persons for certain pharmaceutical brands. By allowing the Minister to determine the maximum price for sales of these brands to pharmacists, the amendment seeks to resolve pricing disputes and ensure continued access to essential medications under the PBS.
Scope and Application
The National Health Act 1953 Amendment Determination under Section 85B, PB 53 of 2008, pertains to the Pharmaceutical Benefits Scheme (PBS) managed by the Commonwealth to ensure Australians have reliable, timely, and affordable access to a wide range of medicines. The Act applies to the Minister, responsible persons for pharmaceutical brands, and approved pharmacists involved in the sale of listed drugs under the PBS. These drugs are declared by the Minister through legislative instruments, with the exception of certain medicinal preparations with additives. The Act has a national jurisdictional reach as it is a Commonwealth legislation. The Act allows the Minister to determine the form, manner of administration, and brand of a pharmaceutical item, as well as the maximum price for sales to pharmacists, particularly when a price agreement cannot be reached between the Minister and the responsible person. Additionally, the Minister can determine the special patient contribution, which is the difference between the Commonwealth price and the responsible person's claimed price. This legislative instrument amends a previous determination made by PB 91 of 2007, which came into effect on 1 December 2007, to update the pricing and contribution details for certain pharmaceutical brands listed on the PBS.
Key Provisions
The main operative sections of this instrument focus on the process of determining prices for pharmaceutical items under the Pharmaceutical Benefits Scheme (PBS). Section 85B(1) stipulates that if the Minister and the responsible person for a brand of pharmaceutical item cannot reach a price agreement, the Minister can make a determination regarding the appropriate maximum price for the sale of the brand to approved pharmacists. Section 85B(2) allows the Minister to determine the amount that is to be taken as the appropriate maximum price, and section 85B(3) enables the Minister to determine the amount that is to be taken as the price claimed by the responsible person. Furthermore, section 85B(4) clarifies that 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". Section 85B(5) empowers the Minister to determine the circumstances in which the Commonwealth is to pay the special patient contribution for the brand of the pharmaceutical item.
This legislation imposes several obligations on the parties it governs. The Minister has the responsibility to determine the appropriate maximum price for pharmaceutical items when a price agreement cannot be reached with the responsible person. The responsible person must provide necessary information and engage in consultations with the Commonwealth to determine the price claimed by the responsible person for sales of the brand to approved pharmacists. Both parties must adhere to the determinations made by the Minister regarding the appropriate maximum price, the special patient contribution, and the circumstances under which the Commonwealth will pay the special patient contribution.
Any breach of the provisions outlined in this legislation could lead to civil or criminal consequences, although the specific offences and penalties are not detailed in the provided text. The maximum penalties for breaches of the National Health Act 1953 generally include fines and imprisonment, with the exact penalties varying depending on the nature and severity of the offence. It is important for parties governed by this legislation to comply with the requirements to avoid potential legal repercussions.