EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

AMENDMENT DETERMINATION UNDER PARAGRAPH 98B (1) (a)

Paragraph 98B (1) (a) of the National Health Act 1953 (“the Act”) provides that a function of the Pharmaceutical Benefits Remuneration Tribunal (“the PBRT”) is to determine the manner in which the Commonwealth price for all or any pharmaceutical benefits is to be worked out for the purpose of payments to approved pharmacists for the supply of pharmaceutical benefits.

Subsection 98BAA (1) of the Act requires that, where the Commonwealth and the Pharmacy Guild of Australia (or another pharmacists’ organisation representing a majority of approved pharmacists) enter into an agreement relating to the manner in which the Commonwealth price for pharmaceutical benefits is to be calculated, the PBRT, when making a determination pursuant to paragraph 98B (1) (a) of the Act, is to give effect to the terms of that agreement.

The current agreement is the Fourth Community Pharmacy Agreement (“the Fourth Agreement”) between the Commonwealth and the Pharmacy Guild of Australia, signed on    16 November 2005 and commenced on 1 December 2005.  On 23 June 2006 the PBRT made the National Health Act 1953 Pharmaceutical Benefits Determination under paragraph 98B(1)(a) which commenced on 1 July 2006 (“the Principal Determination”).  The Principal Determination gives effect to the terms of the Fourth Agreement that set out the fees that are to be paid to pharmacists for the supply of pharmaceutical benefits.  The Principal Determination has been previously amended on 26 July 2006 (with effect from 1 August 2006), 4 October 2006 (with effect from 1 October 2006), 24 November 2006 (with effect from 1 December 2006), 28 February 2007 (with effect from 1 March 2007), 13 March 2007 (with effect from 1 April 2007), 12 April 2007 (with effect 1 May 2007), 20 June 2007 (with effect from 1 July 2007), 30 July 2007 (with effect from 1 August 2007), and 13 November 2007 (with effect from 1 December 2007).

Part 2 of the Fourth Agreement sets out the manner in which the Commonwealth price for pharmaceutical benefits is to be calculated.  A component of the Commonwealth price is the pharmacists’ dispensing fees.  The method by which the pharmacists’ dispensing fees are to be adjusted, with effect from 1 July of each year is also set out in the Fourth Agreement.  As part of the Fourth Agreement, the Minister for Health and Ageing (on behalf of the Commonwealth) and the Pharmacy Guild of Australia have agreed to the amount of the pharmacists’ dispensing fees to have effect from 1 July 2008.  This Determination is made pursuant to paragraph 98B (1) (a) of the Act and gives effect to the terms of the Fourth Agreement concerning the Commonwealth price for pharmaceutical benefits.  The dispensing fee for ready-prepared pharmaceutical benefits will increase by 37 cents to $5.81, and the dispensing fee for extemporaneously-prepared pharmaceutical benefits will increase by 37 cents to $7.85.

Further details of the Determination are set out in the Attachment.

Consultation

The Principal Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.  Amendments to the Principal Determination have been made in consultation with the Pharmacy Guild of Australia, an organisation representing a majority of approved pharmacists.  The Pharmacy Guild of Australia is a party to the Fourth Agreement and supports this Determination.

ATTACHMENT

NOTES ON CLAUSES TO THE AMENDMENT DETERMINATION

Clause 1 – Name of Determination

Clause 1 provides that the name of the Determination is the National Health Act 1953 Pharmaceutical Benefits Amendment Determination under paragraph 98B(1)(a) No.11.

Clause 2 – Commencement

Clause 2 provides that the Amendment Determination commences on 1 July 2008.

Clause 3 – Amendment of the Determination under paragraph 98B(1)(a)

Clause 3 provides that the National Health Act 1953 Pharmaceutical Benefits Determination under paragraph 98B(1)(a) made on 23 June 2006 (“the Principal Determination”) is amended as set out in the Schedule.

Schedule – Amendments

Item 1 – Paragraph 6 ‑ provides that the amount of the dispensing fee referred to in the definition of “extemporaneously-prepared dispensing fee” in paragraph 6 of the Principal Determination is to be increased by 37 cents to $7.85.

Item 2 – Paragraph 6 – provides that the definition of “pharmaceutical item” is to be inserted and defined as “has the same meaning as in section 84AB of the Act”.

Item 3 – Paragraph 6 ‑ provides that the amount of the dispensing fee referred to in the definition of “ready-prepared dispensing fee” in paragraph 6 of the Principal Determination is to be increased by 37 cents to $5.81.

Item 4 – Paragraph 6 ‑ provides that the reference in paragraph 6 of the Principal Determination to ‘“ready-prepared pharmaceutical benefit” means a pharmaceutical benefit in respect of which there is a determination under subsection 85 (6) of the Act as set out in PB 89 of 2007’ is amended to ‘“ready-prepared pharmaceutical benefit” means a brand of a pharmaceutical item in respect of which there is a determination under subsection 85 (6) of the Act as set out in PB 89 of 2007’.

Item 5 – Paragraph 12 ‑ provides that the reference in paragraph 12 of the Principal Determination to ‘may be supplied as a pharmaceutical benefit under Part VII of the Act’ is amended to ‘may be supplied as a pharmaceutical item under Part VII of the Act’.