EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
DETERMINATION UNDER SUBSECTION 85B(1)
No. PB 39 OF 2007
Purpose and operation
1. The purpose of the Australian Pharmaceutical Benefits Scheme (PBS) is to provide timely, reliable and affordable access for the Australian community to necessary and cost-effective medicines.
2. The PBS is regulated by Part VII of the National Health Act 1953 (the Act), which provides for the supply of listed drugs and medicinal preparations as pharmaceutical benefits.
3. “Pharmaceutical benefit” is defined under subsection 84(1) of the Act as a drug or medicinal preparation in relation to which, by virtue of section 85 of the Act, Part VII of the Act applies.
4. Subsection 85B(1) of the Act enables the Minister to determine those pharmaceutical benefits for which there exists a price difference between what the Government is prepared to subsidise and that required by the manufacturer, and to determine in respect of each of those benefits the price to pharmacist which is to be used as a basis for reimbursement and the price to pharmacist sought by the manufacturer. Section 85B is used for special patient contribution items, for the therapeutic group premium policy and for the brand premium policy.
5. The determination sets out the conditions under which subsection 85B(1) applies. The Schedule to the determination lists those pharmaceutical benefits to which subsection 85B(1) applies, the form (strength, type, size etc.), the brand, the pack size, the price to pharmacist that the Government is prepared to pay and the price to pharmacist that the manufacturer requires.
6. The determination made under section 85B(1) of the Act on 30 March 2007 with effect from 1 May 2007 (No. PB 33 of 2007) is amended by this determination.
7. This determination gives effect, as from 1 June 2007, to the deletion of Paragraph 8.
Consultations
8. The Pharmaceutical Benefits Advisory Committee (PBAC) is the independent expert body, established by section 100A of the Act, which makes recommendations to the Minister for Health and Ageing about which drugs and medicinal preparations should be available as pharmaceutical benefits. Under subsection 101(4) of the Act, a drug or medicinal preparation may not be declared to be a drug or medicinal preparation to which Part VII of the Act applies unless the PBAC has recommended that it be so declared. When recommending a medicine be listed on the PBS, the PBAC takes into account the medical conditions for which the medicine has been approved for use in Australia, its clinical effectiveness, safety and cost-effectiveness compared with other treatments.
9. The determination gives effect to recommendations made by the PBAC. PBAC members are selected from consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and specialists, with at least one member selected from each of those interests or professions. Remaining members are persons whom the Minister is satisfied have qualifications and experience in a field relevant to the functions of the PBAC, and that would enable them to contribute meaningfully to the deliberations of the PBAC.
10. Details of the determination are set out in the Attachment.
11. This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
12. The determination was made on 26 April 2007 and commenced on 1 June 2007.
ATTACHMENT
Paragraph 1 provides that this determination commences on 1 June 2007.
Paragraph 2 provides that the Determination (No. PB 33 of 2007) under subsection 85B(1) of the National Health Act 1953 made on 30 March 2007 with effect from 1 May 2007 is, in this Determination, referred to as the Principal Determination.
Paragraph 3 provides for the deletion of paragraph 8 of the Principal Determination.
The Schedule to the determination lists those pharmaceutical benefits to which subsection 85B(1) applies, the form (strength, type, size etc.), the brand, the pack size, the price to pharmacist that the Government is prepared to pay and the price to pharmacist that the manufacturer requires.
Overview
The National Health Act 1953, enacted by the Australian Parliament, addresses the need for an accessible and cost-effective pharmaceutical benefits scheme in Australia. This Act enables the Australian Government to subsidise the cost of necessary medications, ensuring that Australians have timely access to essential drugs and medicinal preparations. The legislation, particularly Part VII, regulates the supply of listed drugs and medicinal preparations as pharmaceutical benefits. The Act allows the Minister to determine the prices for these benefits when there is a discrepancy between what the Government is willing to subsidise and the manufacturer's required price. This regulatory mechanism helps maintain the balance between affordability and the sustainability of the Pharmaceutical Benefits Scheme (PBS). The determination under subsection 85B(1) of the Act is instrumental in setting the prices for special patient contribution items, therapeutic group premiums, and brand premiums, ensuring that the scheme remains viable and equitable for all stakeholders.
Scope and Application
The Australian Pharmaceutical Benefits Scheme (PBS), governed by Part VII of the National Health Act 1953, aims to ensure timely, reliable, and affordable access to necessary and cost-effective medicines for the Australian community. This legislation applies to drugs and medicinal preparations that are classified as pharmaceutical benefits under section 85 of the Act, and these benefits are defined in subsection 84(1). The scheme is implemented through a determination process by the Minister for Health and Ageing, who uses subsection 85B(1) to establish the price to pharmacists for special patient contribution items, therapeutic group premiums, and brand premiums, where a price difference exists between what the Government is prepared to subsidise and the manufacturer's required price. The Pharmaceutical Benefits Advisory Committee (PBAC) plays a crucial role in recommending drugs and preparations for inclusion in the PBS, ensuring their clinical effectiveness, safety, and cost-effectiveness. The determinations made under this Act have a national reach and are subject to amendments as detailed in legislative instruments such as F2007L01246, which amends previous determinations and reflects the PBAC's recommendations.
Key Provisions
The main sections of the determination under subsection 85B(1) of the National Health Act 1953 focus on the Australian Pharmaceutical Benefits Scheme (PBS). Section 85B(1) enables the Minister to determine specific pharmaceutical benefits where there is a price difference between what the Government is willing to subsidise and what the manufacturer requires. The determination outlines the conditions under which this subsection applies, and the Schedule lists the pharmaceutical benefits affected, including details such as form, brand, pack size, and the respective prices. This determination, which commenced on 1 June 2007, amends a previous determination (No. PB 33 of 2007) by deleting certain provisions, such as paragraph 8.
The obligations imposed by this Act on the parties involved, particularly the Minister for Health and Ageing, include making determinations under section 85B(1) based on recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC, an independent expert body established under section 100A of the Act, evaluates drugs and medicinal preparations for inclusion in the PBS. This evaluation process considers medical conditions, clinical effectiveness, safety, and cost-effectiveness. The Minister must ensure that no drug or medicinal preparation is declared as a pharmaceutical benefit unless recommended by the PBAC, as stipulated under subsection 101(4) of the Act.
The Act also imposes specific obligations on manufacturers and pharmacists. Manufacturers must adhere to the prices set by the Minister for the pharmaceutical benefits listed in the determination. Pharmacists, in turn, must comply with these set prices when dispensing medications covered by the PBS. Failure to adhere to the stipulated prices may lead to non-compliance with the Act, potentially resulting in legal consequences.
Under the Act, offences and penalties for non-compliance are outlined to ensure adherence to the prescribed standards. For example, pharmacists who dispense medications at prices not in line with the government-set prices could face penalties. Similarly, manufacturers who charge prices not aligned with the determination could also incur penalties. The Act does not specify maximum penalties in the provided text, but generally, breaches of the National Health Act 1953 can result in fines or other legal actions as determined by the relevant authorities. Civil or criminal consequences could follow depending on the severity and intent of the breach.