National Health Act 1953 - Amendment Determination under section 85B - price determinations and special patient contributions (No. PB 9 of 2008)

Administered by Department of Health, Disability and Ageing

Legislation au F2007L04907 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 9 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 January 2008, was made on 14 December 2007.

 

 

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 January 2008.

Paragraph 2: provides that Schedule 1 amends PB 91 of 2007.

Schedule 1: provides for the following amendments:

 

SCHEDULE 1

Item Deleted

Oestradiol  

 

Overview

The National Health Act 1953, as amended by legislative instrument PB 9 of 2008, addresses the issue of reaching a price agreement between the Minister and the responsible person for a brand of pharmaceutical item when the Pharmaceutical Benefits Scheme (PBS) is involved. This amendment was introduced to ensure that the PBS continues to provide reliable, timely, and affordable access to medicines for all Australians. The instrument, enacted by the Commonwealth Parliament, aims to provide a legislative framework for determining the price of pharmaceutical items when a price agreement cannot be reached. It allows the Minister to set the maximum price and the responsible person's price for the brand of pharmaceutical item, ensuring that the PBS can continue to function effectively and fairly. The policy objective is to maintain the integrity and accessibility of the PBS, thereby safeguarding the health and wellbeing of Australians.

Scope and Application

The National Health Act 1953, as amended by F2007L04907, governs the Pharmaceutical Benefits Scheme (PBS) which ensures Australians have reliable, timely, and affordable access to medicines. The Act applies to pharmaceutical benefits provided by the Commonwealth, specifically to drugs and medicinal preparations declared by the Minister under the Act. The Act's provisions cover the determination of the form, administration, and brand of pharmaceutical items, and the process for setting maximum prices and special patient contributions when price agreements between the Minister and the responsible person for a pharmaceutical brand cannot be reached. This legislative instrument amends the previous determination under section 85B, effective from 1 January 2008, to incorporate recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC). The amendments are detailed in the Schedule to the instrument, which modifies the price determinations for specific pharmaceutical brands. This Act applies nationally across Australia, and while it primarily concerns the Commonwealth, its effects are felt throughout the pharmaceutical industry and among consumers of PBS-listed medicines.

Key Provisions

The National Health Act 1953 Amendment Determination under section 85B, specifically PB 9 of 2008, focuses on the Pharmaceutical Benefits Scheme (PBS), which ensures Australians have access to affordable medicines. The primary sections of this legislation, as amended, govern the declaration of listed drugs (subsection 85(2)), the determination of drug forms and administration (subsections 85(3) and 85(5)), and the appointment of a responsible person for pharmaceutical brands (subsection 84AF). The amendment process allows the Minister to set the maximum price for pharmaceutical sales when an agreement cannot be reached between the Minister and the responsible person (subsection 85B(2)). Additionally, the Minister can determine the responsible person's price and the special patient contribution (subsections 85B(3) and 85B(4)). The special patient contribution is the difference between the Commonwealth price and the responsible person's price. The Act imposes several obligations on the parties involved, including the Minister and responsible persons. The Minister must consult with the responsible person if a price agreement cannot be reached for a pharmaceutical brand under the PBS. This consultation process aims to determine the appropriate price for the brand, ensuring that the medicine remains accessible and affordable to patients. Furthermore, the responsible person must provide the necessary information to facilitate the determination of the special patient contribution and other relevant pricing factors. Failure to comply with the provisions of this Act can result in various penalties and consequences. Although specific penalties are not detailed within the provided text, breaches of the Act could lead to legal action under the general provisions of the National Health Act 1953. The Minister's power to set prices and determine contributions is intended to ensure that the PBS remains effective in providing affordable medicines to the public. Non-compliance could potentially disrupt the availability of essential medications and affect patient access, leading to significant repercussions for those involved.

Legal classification tags

Area of Law
Health Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Licensing & Registration
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.