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), 20 June 2007 (with effect from 1 August 2007), 25 July 2007 (with effect from 1 August 2007, 13 November 2007 (with effect from 1 December 2007) and 12 June 2008 (with effect from 1 July 2008).

Part 2 of the Fourth Agreement sets out the manner in which the Commonwealth price for pharmaceutical benefits is to be calculated.  Components of the Commonwealth price are the pharmacists’ dispensing fees and pharmacy mark-ups.

The Fourth Agreement sets out the PBS Reforms a community pharmacy compensation package to assist pharmacists adjust to the changes to the PBS.

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 August 2008.  The Fourth Agreement also notes that the pharmacy mark-up on all Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme items will be amended on 1 August 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 18 cents to $5.99, and the dispensing fee for extemporaneously-prepared pharmaceutical benefits will increase by 18 cents to $8.03.

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.12.

Clause 2 – Commencement

Clause 2 provides that the Amendment Determination commences on 1 August 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 18 cents to $8.03.

Item 2 – 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 18 cents to $5.99.

Item 3 –– Paragraph 14 ‑ provides that the amount of the mark-up referred to in the paragraph 14 of the Principal Determination is amended to:

(a) 15 per cent of the approved price to pharmacists, where the approved price to pharmacists for the quantity or number of units of the ready-prepared pharmaceutical benefit specified as the maximum quantity in the determination under paragraph 85A (2) (a) of the Act as set out in PB 89 of 2007 for that ready-prepared pharmaceutical benefit is not more than $30.00; or

(b) $4.50, where the approved price to pharmacists for the quantity or number of units of the ready-prepared pharmaceutical benefit specified as the maximum quantity in the determination under paragraph 85A (2) (a) of the Act as set out in PB 89 of 2007 for that ready-prepared pharmaceutical benefit is more than $30.00 but not more than $45.00; or

(c) 10 per cent of the approved price to pharmacists, where the approved price to pharmacists for the quantity or number of units of the ready-prepared pharmaceutical benefit specified as the maximum quantity in the determination under paragraph 85A (2) (a) of the Act as set out in PB 89 of 2007 for that ready-prepared pharmaceutical benefit is more than $45.00 but not more than $180.00; or

(d) $18.00, where the approved price to pharmacists for the quantity or number of units of the ready-prepared pharmaceutical benefit specified as the maximum quantity in the determination under paragraph 85A (2) (a) of the Act as set out in PB 89 of 2007 for that ready-prepared pharmaceutical benefit is more than $180.00 but not more than $450.00; or

(e) 4 per cent of the approved price to pharmacists, where the approved price to pharmacists for the quantity or number of units of the ready-prepared pharmaceutical benefit specified as the maximum quantity in the determination under paragraph 85A (2) (a) of the Act as set out in PB 89 of 2007 for that ready-prepared pharmaceutical benefit is more than $450.00 but not more than $1750.00; or

(f) $70.00, where the approved price to pharmacists for the quantity or number of units of the ready-prepared pharmaceutical benefit specified as the maximum quantity in the determination under paragraph 85A (2) (a) of the Act as set out in PB 89 of 2007 for that ready-prepared pharmaceutical benefit is more than $1750.00.

Item 4 –– Paragraph 23 ‑ provides that the amount of the mark-up referred to in the paragraph 23 of the Principal Determination is amended to:

(a) 15 per cent of the basic wholesale price of the ingredient where the basic wholesale price for the agreed purchase quantity of the ingredient is not more than $30.00; or

(b) $4.50, where the basic wholesale price for the agreed purchase quantity of the ingredient is more than $30.00 but not more than $45.00; or

(c) 10 per cent of the basic wholesale price of the ingredient where the basic wholesale price for the agreed purchase quantity of the ingredient is more than $45.00 but not more than $180.00; or

(d) $18.00, where the basic wholesale price for the agreed purchase quantity of the ingredient is more than $180.00 but not more than $450.00; or

(e) 4 per cent of the basic wholesale price of the ingredient where the basic wholesale price for the agreed purchase quantity of the ingredient is more than $450.00 but not more than $1750.00; or

(f) $70.00, where the basic wholesale price for the agreed purchase quantity of the ingredient is more than $1750.00.

Item 5 –– Paragraph Appendix A ‑ provides that the amount of the mark-up referred to in the paragraph 23 of the Principal Determination is amended to: