EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
PHARMACEUTICALS BENEFITS
AMENDMENT DETERMINATION UNDER SUBSECTION 84C (7) No. 1
Division 1A of Part VII of the National Health Act 1953 provides for the Safety Net scheme in relation to pharmaceutical benefits. The Safety Net scheme is designed to provide financial protection for those patients and their families who require a large number of Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme medicines.
The purpose of the National Health Act 1953 Pharmaceutical Benefits Amendment Determination under subsection 84 (7) No. 1 (Determination) is to amend the National Health Act 1953 Pharmaceutical Benefits Determination under subsection 84C (7) made on 14 June 2006 (the Principal Determination) to reflect the annual adjustment to the additional fee. The additional fee is intended as a payment to the pharmacist for recording the supply of a pharmaceutical benefit where its Commonwealth price is less than the patient co-payment. The Determination provides that the price for a pharmaceutical benefit or repatriation pharmaceutical benefit will not exceed the patient co-payment. In some instances, a pharmacist may not be able to charge the full amount of the additional fee since it would cause the price to exceed the patient co-payment.
The additional fee is indexed annually using the Wage Cost Index 9. On this occasion, the additional fee for a ready-prepared pharmaceutical benefit will increase by two cents to $1.01 and the additional fee for an extemporaneously-prepared pharmaceutical benefit will increase by two cents to $1.40.
Subsection 84C (9) of the National Health Act 1953 provides that the Minister may not determine an additional fee without the agreement, in writing, of the Pharmacy Guild of Australia. The Pharmacy Guild of Australia has been consulted on this matter and has agreed, in writing, to the making of this Determination.
This Determination, which amends the Principal Determination made on 14 June 2006, will commence on 1 August 2007.
Details of the Determination are set out in the Attachment.
This Determination is a legislative instrument for the purpose of the Legislative Instruments Act 2003.
ATTACHMENT
NOTES ON CLAUSES TO THE 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 subsection 84C (7) No.1.
Clause 2 – Commencement
Clause 2 provides that the Determination commences on 1 August 2007.
Clause 3 – Amendment of the Determination under subsection 84C (7)
Clause 3 provides that the Principal Determination is amended as set out in the Schedule.
Schedule – Amendments
Item 1 – omits the word “agreed” from “agreed price” to reflect the amended terminology in the Act, as a consequence of the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007.
Item 2 – Paragraph 4 (b) (i) ‑ provides that the amount of the additional fee for a ready prepared pharmaceutical benefit in paragraph 4 (b) (i) of the Principal Determination is increased by two cents to $1.01.
Item 3 – Paragraph 4 (b) (ii) ‑ provides that the amount of the additional fee for an extemporaneously-prepared pharmaceutical benefit in paragraph 4 (b) (ii) of the Principal Determination is increased by two cents to $1.40.
Item 4 ‑ omits the word “agreed” from “agreed price” to reflect the amended terminology in the Act, as a consequence of the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007.
Overview
The National Health Act 1953, enacted to provide a framework for the administration of the Pharmaceutical Benefits Scheme, includes provisions for the Safety Net scheme, which aims to offer financial protection to patients who require a significant amount of medications covered under the scheme. The National Health Act 1953 Pharmaceutical Benefits Amendment Determination under subsection 84C (7) No. 1, issued in 2007, was made to amend the previous Pharmaceutical Benefits Determination to incorporate the annual adjustment to the additional fee. This fee, meant as a payment to pharmacists for recording the supply of medicines with a Commonwealth price lower than the patient co-payment, is indexed annually using the Wage Cost Index. The amendment, which reflects the agreement of the Pharmacy Guild of Australia, increases the additional fee for ready-prepared pharmaceutical benefits by two cents to $1.01 and for extemporaneously-prepared pharmaceutical benefits by two cents to $1.40. This adjustment ensures that the price of a pharmaceutical benefit or repatriation pharmaceutical benefit does not exceed the patient co-payment, thereby maintaining the integrity of the Safety Net scheme.
Scope and Application
The National Health Act 1953 Pharmaceutical Benefits Amendment Determination under subsection 84C (7) No. 1 pertains to the Safety Net scheme which is intended to provide financial protection for patients and their families who require a significant number of Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme medicines. This Determination specifically addresses the annual adjustment to the additional fee payable to pharmacists for recording the supply of pharmaceutical benefits where the Commonwealth price is less than the patient co-payment. It ensures that the price for these pharmaceutical benefits does not exceed the patient co-payment, and it includes adjustments to the additional fee, which is indexed annually using the Wage Cost Index. The amendment to the additional fee, effective from 1 August 2007, increases the fee for ready-prepared pharmaceuticals by two cents to $1.01 and for extemporaneously-prepared pharmaceuticals by two cents to $1.40. The application of this Determination is national in scope, covering all pharmacists and patients under the Pharmaceutical Benefits Scheme within Australia. It applies to the conduct and transactions involving the supply of pharmaceutical benefits and is subject to the agreement of the Pharmacy Guild of Australia as required by subsection 84C (9) of the National Health Act 1953.
Key Provisions
The National Health Act 1953 Pharmaceutical Benefits Amendment Determination under subsection 84C (7) No. 1 (the Determination) primarily amends the National Health Act 1953 Pharmaceutical Benefits Determination made on 14 June 2006 (the Principal Determination). This amendment reflects the annual adjustment to the additional fee for pharmacists under the Safety Net scheme. This scheme is designed to provide financial protection to patients and their families who require a large number of Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme medicines (section 84C (9)). The additional fee is intended to compensate pharmacists for recording the supply of a pharmaceutical benefit when its Commonwealth price is less than the patient co-payment. The Determination ensures that the price for a pharmaceutical benefit or repatriation pharmaceutical benefit will not exceed the patient co-payment, thereby preventing pharmacists from charging the full amount of the additional fee in certain instances (section 84C (7)).
The Determination imposes obligations on pharmacists participating in the Pharmaceutical Benefits Scheme to accurately record the supply of pharmaceutical benefits, ensuring that the price charged does not exceed the patient co-payment. Additionally, the Minister for Health must not determine an additional fee without the agreement, in writing, of the Pharmacy Guild of Australia (section 84C (9)). This requirement underscores the collaborative nature of the amendment process, ensuring that all relevant parties are consulted and agree to the changes before they are implemented.
In the event of a breach of the provisions outlined in the Determination, there are potential civil and criminal consequences. While the Determination itself does not specify the exact penalties for non-compliance, breaches of the National Health Act 1953 can result in civil penalties under section 127, which can include fines up to $22,000 for individuals and $110,000 for corporations, as well as potential criminal penalties under section 130. These provisions highlight the importance of adhering to the requirements set forth in the Act and the Determination to avoid legal repercussions.