National Health Act 1953 - Determination under subsection 85B(1) (No. PB 5 of 2005)

Administered by Department of Health, Disability and Ageing

Legislation au F2005L00780 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

DETERMINATION UNDER SUBSECTION 85B(1)

 

NO. PB 5 OF 2005

 

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.

 

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.

 

“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.

 

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.

 

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.

 

The determination made under section 85B(1) of the Act on 17 November 2004 with effect from 1 December 2004 is repealed and substituted with this determination.

 

This determination is remade to give effect, as from 1 April 2005, to changes to the list of drugs and medicinal preparations available as pharmaceutical benefits, as recommended by the Pharmaceutical Benefits Committee.  Changes to the Schedule to this determination are detailed in the attached summary of changes

 

Consultations

 

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.

 

The determination gives effect to recommendations made by the PBAC. Prior to the making of this determination significant consultations have been undertaken by the PBAC by means of its consideration of submissions made by applicants for drugs to be listed on the PBS.  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.

 

Details of the determination are set out in the Attachment.

 

This determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The determination was made on 22 March 2005 and commenced on 1 April 2005.

 


SUMMARY OF CHANGES

 

LIST OF MANUFACTURERS

Additions

GC    GlaxoSmithKline Consumer Healthcare

 

Brands where a therapeutic group premium has changed to a brand premium

Nizatidine   Capsule 150 mg (AS)

    Capsule 300 mg (AS)

 

Brands to which a brand premium now applies

Hypromellose with  Ocular lubricating gel 3 mg-2 mg per g, 10 g (NV)

  Carbomer 980

Paracetamol   Tablet 665 mg (modified release) (GC)

Sertraline Hydrochloride Tablet equivalent to 50 mg sertraline (PF)

Tablet equivalent to 100 mg sertraline (PF)

Terbinafine Hydrochloride Tablet equivalent to 250 mg terbinafine (NV)

 

Brand to which a brand premium will no longer apply (brand deleted from the PBS)

Sulindac   Tablet 200 mg (FR)

 

Brands with an increased brand premium

Atenolol   Tablet 50 mg (AP)

Brimonidine Tartrate  Eye drops 2 mg per mL, 5 mL (AG)

Carbamazapine  Tablet 100 mg (NV)

    Tablet 200 mg (NV)

Carbomer 980   Ocular lubricating gel 2 mg per g, 10 g (NV)

Codeine Phosphate with Tablet 30 mg-500 mg (SW)

 Paracetamol

Diclofenac Sodium  Tablet 25 mg (enteric coated) (NV)

    Tablet 50 mg (enteric coated) (NV)

Felodipine   Tablet 2.5 mg (extended release) (AP)

    Tablet 5 mg (extended release) (AP)

    Tablet 10 mg (extended release) (AP)

Isosorbide Mononitrate Tablet 60 mg (sustained release) (AP)

    Tablet 120 mg (sustained release) (AP)

Lisinopril   Tablet 5 mg (AP)

    Tablet 10 mg (AP)

    Tablet 20 mg (AP)

Metoprolol Tartrate  Tablet 50 mg (AP)

    Tablet 50 mg (NV)

    Tablet 100 mg (AP)

    Tablet 100 mg (NV)

Paraffin – Soft White with Pack containing 2 tubes eye ointment, compound, 3.5 g (AG)

 Paraffin – Liquid


Pilocarpine Hydrochloride Eye drops 5 mg per mL, 15 mL (AG)

    Eye drops 10 mg per mL, 15 mL (AG)

    Eye drops 20 mg per mL, 15 mL (AG)

    Eye drops 30 mg per mL, 15 mL (AG)

    Eye drops 40 mg per mL, 15 mL (AG)

Pindolol   Tablet 5 mg (NV)

    Tablet 15 mg (NV)

Polyvinyl Alcohol  Eye drops 30 mg per mL, 15 mL (AG)

Potassium Chloride  Tablet 600 mg (sustained release) (NV)

Propranolol Hydrochloride Tablet 10 mg (AP)

    Tablet 40 mg (AP)

 

Brands with an decreased brand premium

Diphenoxylate   Tablet 2.5 mg-25 micrograms (PH)

 Hydrochloride with

 Atropine Sulfate 

Loperamide Hydrochloride Capsule 2 mg (JC)

Omeprazole Magnesium Tablet equivalent to 20 mg omeprazole

Pilocarpine Hydrochloride Eye drops 60 mg per mL, 15 mL (AG)

Sulfasalazine   Tablet 500 mg (enteric coated) (PH)

Thyroxine Sodium  Tablet equivalent to 50 micrograms anydrous thyroxine

       sodium (SI)

 

Brands with price changes but no change in brand premium

Aspirin   Tablet 100 mg (MX)

Cyproterone Acetate  Tablet 50 mg (SC)

    Tablet 100 mg (SC)

Leflunomide   Tablet 10 mg (AV)

    Tablet 20 mg (AV)

Thyroxine Sodium  Tablet equivalent to 100 micrograms anydrous thyroxine

      sodium (SI)

    Tablet equivalent to 200 micrograms anydrous thyroxine

      sodium (SI)

Triamcinolone Acetonide Ear ointment 1 mg-2.5 mg (neomycin)-250 micrograms-

  with Neomycin Sulfate,   100,000 units per g, 5 g (BQ)

  Gramicidin and Nystatin


ATTACHMENT

 

Paragraph 1 provides that this determination commences on 1 April 2005.

 

Paragraph 2 provides that the determination under subsection 85B(1) of the National Health Act 1953 made on 17 November 2004 is repealed.

 

Paragraph 3 defines the term “authority prescription”.

 

Paragraph 4 provides that the Schedule to the determination lists those brands of pharmaceutical benefits to which subsection 85B(1) apply.

 

Paragraph 5 provides that where a form and brand of pharmaceutical benefit is listed in Part A of the Schedule, Part B of the Schedule lists the quantity or number of units that is to be used for determining the manufacturer’s price for sales, and the price claimed by the manufacturer, for that form and brand.

 

Paragraph 6 provides that Part C of the Schedule lists the manufacturer’s price for sales for a particular form and brand that is listed in Part A of the Schedule.

 

Paragraph 7 provides that Part D of the Schedule lists the price claimed by the manufacturer for a particular form and brand that is listed in Part A of the Schedule.

 

Paragraph 8 lists the names of the manufacturers of those brands of pharmaceutical benefits, listed under “Brand” in Part A of the Schedule, to which this determination 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.

Overview

The National Health Act 1953 was enacted to establish and regulate the Australian Pharmaceutical Benefits Scheme (PBS), aiming to ensure timely, reliable, and affordable access to necessary and cost-effective medicines for the Australian community. This Act, overseen by the Parliament of Australia, defines a "pharmaceutical benefit" as a drug or medicinal preparation for which Part VII applies, thereby regulating its supply. The Act enables the Minister to determine the price difference between the government subsidy and the manufacturer's required price for special patient contribution items, therapeutic group premium policy, and brand premium policy. This is achieved through determinations under subsection 85B(1), which are subject to recommendations by the Pharmaceutical Benefits Advisory Committee (PBAC), ensuring comprehensive consultations with various health professionals before listing drugs on the PBS. The determination under subsection 85B(1) of the Act, remade on 22 March 2005 and effective from 1 April 2005, updates the list of drugs and medicinal preparations available as pharmaceutical benefits based on PBAC recommendations. The determination specifies the form, brand, pack size, government-approved price to the pharmacist, and the manufacturer's required price for each pharmaceutical benefit, ensuring alignment with the PBS's objective of providing affordable access to essential medications.

Scope and Application

The determination under subsection 85B(1) of the National Health Act 1953 applies to pharmaceutical benefits for which there is a price difference between what the Australian Government is prepared to subsidise and what the manufacturer requires. This applies to drugs and medicinal preparations listed in the Schedule to the determination, which includes details such as the form, brand, pack size, and the prices involved. The Act applies to these specified pharmaceutical benefits, and the Pharmaceutical Benefits Advisory Committee (PBAC) is responsible for recommending drugs and medicinal preparations to be listed on the Pharmaceutical Benefits Scheme (PBS), ensuring they meet criteria such as clinical effectiveness and cost-effectiveness. The determination is a legislative instrument under the Legislative Instruments Act 2003 and commenced on 1 April 2005. The Schedule includes a list of manufacturers and brands with relevant details regarding the prices and premiums, thereby outlining the conditions and terms under which the pharmaceutical benefits are provided. The application of the Act is governed by these specified conditions and the recommendations of the PBAC.

Key Provisions

The Australian Pharmaceutical Benefits Scheme (PBS), governed by Part VII of the National Health Act 1953, facilitates access to necessary and cost-effective medicines (subsection 84(1)). Section 85B(1) empowers the Minister to determine the price differences between what the government is willing to subsidise and what the manufacturer requires, setting the price for reimbursement to pharmacists (subsection 85B(1)). This determination, effective from 1 April 2005, follows recommendations by the Pharmaceutical Benefits Committee (PBAC), ensuring the PBS list is updated accordingly. The Act imposes several obligations on parties involved. Manufacturers must provide details of the pharmaceutical benefits, including form, brand, pack size, and required prices. The government, through the Minister, must approve these prices, ensuring they are affordable and sustainable within the scheme. The PBAC plays a critical role by recommending which drugs should be included in the PBS based on clinical effectiveness, safety, and cost-effectiveness (subsection 101(4)). This process involves extensive consultations with stakeholders, including health economists, pharmacists, and medical specialists. Failure to comply with the provisions of the Act can result in civil or criminal penalties. For instance, providing misleading information about drug prices can lead to fines or imprisonment. The Act does not specify maximum penalties but refers to general penalties under other sections, which can include substantial fines and imprisonment terms. Additionally, non-compliance with the PBAC's recommendations can lead to delays in approving new drugs for the PBS, impacting patient access to necessary medications. Under the legislative instrument framework, this determination is binding and must be adhered to by all relevant parties. It supersedes previous determinations, ensuring that the PBS operates based on the most current recommendations and price agreements. The changes listed in the attached summary provide a detailed overview of the updates, including new additions, price adjustments, and brand premiums. This ensures transparency and accountability in the PBS's operations, maintaining its objective of providing affordable and timely access to essential medicines for the Australian community.

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