National Health Act 1953 - Determination under subsection 85B(1) (No. PB 5 of 2006)

Administered by Department of Health, Disability and Ageing

Legislation au F2006L00174 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

NATIONAL HEALTH ACT 1953

 

DETERMINATION UNDER SUBSECTION 85B(1)

 

NO. PB 5 OF 2006

 

  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      The determination made under section 85B(1) of the Act on 23 November 2005 with effect from 1 December 2005 is repealed and substituted with this determination.

 

7.      This determination is remade to give effect, as from 1 February 2006, to the following changes in brand premiums from 1 February 2006:

 

(i)       an increase in brand premium for:

  • Thyroxine Sodium, tablet equivalent to 100 micrograms anhydrous thyroxine sodium (Sigma)
  • Tramadol Hydrochloride, capsule 50 mg (CSL)

 

(ii)     a decrease in brand premium for:

  • Thyroxine Sodium, tablet equivalent to 200 micrograms anhydrous thyroxine sodium (Sigma)

 

(iii)  a price change (no change in brand premium) for

  • Thyroxine Sodium, tablet equivalent to 50 micrograms anhydrous thyroxine sodium (Sigma)

 

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.  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 10 January 2006 and commenced on 1 February 2006.

 


ATTACHMENT

 

Paragraph 1 provides that this determination commences on 1 February 2006.

 

Paragraph 2 provides that the determination under subsection 85B(1) of the National Health Act 1953 made on 23 November 2005 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 those pharmaceutical benefits for which section 85B of the Act will not apply, if the prescription was written before 1 August 2005 and the pharmaceutical benefit is supplied before 1 March 2006.

 

Paragraph 9 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 by the Australian Parliament to provide a legislative framework for the regulation of the pharmaceutical benefits scheme (PBS), ensuring the supply of listed drugs and medicinal preparations as pharmaceutical benefits. The Act aims to address the gap in providing timely, reliable, and affordable access to necessary and cost-effective medicines for the Australian community. The determination under subsection 85B(1) of the Act, made on 10 January 2006, repeals the previous determination and sets out the conditions for special patient contribution items, the therapeutic group premium policy, and the brand premium policy. This determination was made to give effect to changes in brand premiums, with increases, decreases, and price changes for specific pharmaceutical benefits. The Pharmaceutical Benefits Advisory Committee (PBAC) is responsible for recommending drugs and medicinal preparations to be available as pharmaceutical benefits, taking into account their medical conditions, clinical effectiveness, safety, and cost-effectiveness.

Scope and Application

The determination under subsection 85B(1) of the National Health Act 1953 applies to pharmaceutical benefits provided under the Australian Pharmaceutical Benefits Scheme (PBS), which is designed to ensure timely, reliable, and affordable access to necessary and cost-effective medicines for the Australian community. This determination specifically regulates the prices at which the government subsidises certain drugs, thereby controlling the price to pharmacists and the subsequent reimbursement. The scope of the Act extends to all entities and individuals involved in the supply of listed drugs and medicinal preparations within Australia, including pharmaceutical manufacturers, pharmacists, and patients. This determination is applicable across the entire Commonwealth of Australia, with the prices set by the government influencing the cost to consumers and the reimbursement process for pharmacists. While the Act generally applies to all relevant entities, there are exclusions where the prescription was written before 1 August 2005 and the pharmaceutical benefit is supplied before 1 March 2006. The Act allows for further specification and amendment through subordinate instruments, such as the Schedule attached to this determination, which lists the specific drugs, their forms, brands, pack sizes, and the respective prices set by the government and those claimed by the manufacturers.

Key Provisions

The National Health Act 1953, specifically under Part VII, governs the Australian Pharmaceutical Benefits Scheme (PBS) (s 84(1)). The primary purpose of the PBS is to ensure that the Australian community has timely, reliable, and affordable access to necessary and cost-effective medicines (s 85). The Minister for Health has the authority to determine pharmaceutical benefits subject to price differences between the government's subsidy and the manufacturer's required price, as well as to set the reimbursement price for pharmacists (s 85B(1)). This determination outlines the conditions under which these provisions apply and lists the specific pharmaceutical benefits, their forms, brands, pack sizes, and the respective prices for pharmacists. Entities and individuals governed by the Act, such as pharmaceutical manufacturers, pharmacists, and the government, have specific obligations. Manufacturers must adhere to the prices set by the government for reimbursement, while pharmacists must follow the outlined pricing for dispensing these medications. The government, through the Minister, is responsible for setting these prices based on the recommendations of the Pharmaceutical Benefits Advisory Committee (PBAC) (s 101(4)). The PBAC, an independent body, makes recommendations on which drugs should be included in the PBS, considering their clinical effectiveness, safety, and cost-effectiveness (s 100A). Failure to comply with the provisions of the Act can result in various consequences. Offences under the Act can lead to both civil and criminal penalties. For instance, knowingly supplying a pharmaceutical benefit at a price not authorised by the Minister can result in fines, with specific penalties outlined in the Act. Additionally, any misrepresentation or fraudulent activity related to the PBS can lead to more severe penalties, including imprisonment, depending on the severity of the offence. The maximum penalties for these offences are determined by the specific provisions of the Act and any related legislation.

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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.