EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
DETERMINATION UNDER SUBSECTION 84C (7)
Division 1A of Part VII of the National Health Act 1953 (the Act) provides for the Safety Net scheme in relation to pharmaceutical benefits. The Safety Net scheme is designed to provide financial protection for those patients and their families who require a large number of Pharmaceutical Benefits Scheme (PBS) and Repatriation Pharmaceutical Benefits Scheme (RPBS) medicines.
At the patient’s request, a pharmacist records the supply of PBS and RPBS medicines to that person and the cost of the supply. When a patient reaches a certain spending level on PBS or RPBS medicines (”the Safety Net threshold”), the patient qualifies for a Safety Net Concession or Entitlement Card and will receive PBS or RPBS medicines at a reduced rate or free of charge for the remainder of that entitlement period. An entitlement period for the Safety Net scheme is a calendar year from 1 January to 31 December.
Section 84C of the Act provides for eligibility to receive a Safety Net Concession or Entitlement Card, when a patient and their family’s expenditure on pharmaceutical benefits during the relevant eligibility period reaches the Safety Net threshold.
Section 84C also sets out the amounts in respect of the supply of pharmaceutical benefits which can be taken into account for the purpose of the Safety Net, where the Commonwealth price for that medicine is equal to or greater than the maximum amount a patient may be charged (“the patient co-payment”).
Where the Commonwealth price for a pharmaceutical benefit is less than the patient co-payment, subsection 84C (4) (e) of the Act provides that the amount to be taken into account for the purpose of the Safety Net will not exceed the sum of the agreed price for the pharmaceutical benefit and any charges (where applicable) for supplying the pharmaceutical benefit outside of normal trading hours and/or by delivery to premises other than the approved pharmacy.
Subsection 84C (7) of the Act provides that the Minister may determine the manner in which the agreed price (as referred to in subsection 84C (4) (e)) for all or any pharmaceutical benefit is to be ascertained for the purpose of the Safety Net.
The agreed price is determined as being the sum of the Commonwealth price for a pharmaceutical benefit, calculated in accordance with a determination made under subsection 98B (1) (a) of the Act, and an additional fee as determined by the Minister in accordance with subsection 84C (8) (d) of the Act.
This additional fee is intended as a payment to the pharmacist for recording the supply of a pharmaceutical benefit where its Commonwealth price is less than the patient co-payment. The determination provides that the agreed price for a pharmaceutical benefit will not exceed the patient co-payment. In some instances, a pharmacist may not be able to charge the full amount of the additional fee since it would cause the agreed price to exceed the patient co-payment.
Subsection 84C (9) of the Act provides that the Minister may not determine such an additional fee without the Pharmacy Guild of Australia’s agreement in writing.
The additional fee is indexed annually using the Wage Cost Index 9. On this occasion, the additional fee for ready-prepared pharmaceutical benefits will increase by 2 cents to $0.97 and the additional fee for extemporaneously-prepared pharmaceutical benefits will increase by 3 cents to $1.38.
The Pharmacy Guild of Australia has been consulted on this matter and has agreed, in writing, to the making of this determination.
The determination, which repeals the previous determination made on 29 June 2004, will commence on 1 August 2005.
Details of the determination are set out in the Attachment.
The determination is a legislative instrument for the purpose of the Legislative Instruments Act 2003.
ATTACHMENT
Paragraph 1 provides that the determination commences on 1 August 2005.
Paragraph 2 revokes the previous determination made on 29 June 2004.
Paragraph 3 defines the common terms used in the determination.
Paragraph 4 provides that the agreed price for a pharmaceutical benefit, where the Commonwealth price of the pharmaceutical benefit is less than the patient co-payment, will be the sum of the Commonwealth price, worked out in accordance with the determination under subsection 98B (1) (a) of the Act, and an additional fee of:
- $0.97 for ready-prepared pharmaceutical benefits; or
- $1.38 for extemporaneously-prepared pharmaceutical benefits.
In the case of a ready-prepared pharmaceutical benefit which is specified in Schedule 1 to the determination made under subsection 98C (1) (b) of the Act, the additional fee for extemporaneously-prepared pharmaceutical benefits will apply.
Paragraph 5 provides that the agreed price for a pharmaceutical benefit, where the Commonwealth price of the pharmaceutical benefit is less than the patient co-payment, cannot exceed the amounts specified in subsections 87 (2) and (3) of the Act, which are:
- $4.60 for a concession patient; or
- $4.60 for a general patient who, alone or with their family, has reached their Safety Net threshold in the entitlement period (the calendar year); or
- $28.60 for a general patient; or
- where the equivalent of a repeated supply of pharmaceutical benefits are supplied on one occasion, in accordance with subsection 88 (6) of the Act, the amount is the total of the applicable amount from above multiplied by the number of times the pharmaceutical benefit would have been supplied by way of repeated supply.
These amounts are current as at the date this determination is made, but will be adjusted on 1 January 2006, as provide for in section 99G of the Act.