EXPLANATORY STATEMENT
Issued by Authority of the Minister for Health and Ageing
National Health Act 1953
National Health (Australian Community Pharmacy Authority Rules) Amendment Determination 2009 (No. 1)
Section 90 of the National Health Act 1953 (“the Act”) provides for the Secretary to approve a pharmacist to supply pharmaceutical benefits at particular premises.
Subsection 90(3A) of the Act requires applications to establish a new pharmacy or relocate an existing pharmacy to be referred to the Australian Community Pharmacy Authority (“the Authority”). The Authority is the body, established under section 99J of the Act, which considers applications and makes recommendations to the Secretary as to whether or not a pharmacist should be approved in respect of particular premises.
In making recommendations in relation to applications, the Authority must comply with the rules determined by the Minister under subsection 99L(1) of the Act (“the Pharmacy Location Rules”). In accordance with the Legislative Instruments Act 2003, this legislative instrument is subject to disallowance.
Section 99L of the Act is located in Division 4B of Part VII of the Act. The operation of that Division will cease on 30 June 2010 and accordingly, the Pharmacy Location Rules will cease to have effect after that date.
The Pharmacy Location Rules describe the circumstances in which the Authority must recommend that a pharmacist be approved under section 90 of the Act in respect of particular premises. The Authority must not recommend approval if the relevant criteria in the Pharmacy Location Rules are not met.
The National Health (Australian Community Pharmacy Authority Rules) Amendment Determination 2009 (No. 1) (this Determination):
a) defines full-time prescribing medical practitioner;
b) amends the requirement for pharmacies going into large medical centres;
c) updates the PhARIA year reference;
d) reflects amendments to the primary legislation;
e) clarifies the requirement for pharmacies relocating within the same rural town;
f) requires a pharmacy that is recommended for approval be considered an approved pharmacy when considering subsequent applications;
g) addresses an unintended consequence of the Administrative Appeals Tribunal (AAT) interpretation of ‘genuine barrier’;
h) amends the requirement for an additional pharmacy in an urban or rural locality;
i) amends the requirement for a new urban pharmacy; and
j) clarifies the use of the proposed premises for the purposes of a pharmacy under the applicable State or Territory laws relating to land development.
This Determination amends the Pharmacy Location Rules determined by the National Health (Australian Community Pharmacy Authority Rules) Determination 2006, as amended by the National Health (Australian Community Pharmacy Authority Rules) Amendment Determination 2007 (No. 1).
This Determination comes into effect on 1 March 2009 and will apply to applications for approval considered by the Authority, made after that date. Details of this Determination are set out in the Attachment.
Consultation
The Department of Health and Ageing has consulted on the proposed changes with Medicare Australia, which administers the Pharmaceutical Benefits Scheme program on behalf of the Department and the Pharmacy Guild of Australia, the body that represents the interests of community pharmacy proprietors. Both Medicare Australia and the Pharmacy Guild of Australia support the proposed changes.
ATTACHMENT
Details of the National Health (Australian Community Pharmacy Authority Rules) Amendment Determination 2009 (No. 1)
- Name of Determination
Subsection 1(1) provides that this Determination is called the National Health (Australian Community Pharmacy Authority Rules) Amendment Determination 2009 (No. 1).
Subsection 1(2) provides that this Determination may also be referred to as Determination No. PB 14 of 2009.
2. Commencement
Section 2 provides that this Determination commences on 17 March 2009.
3. Amendment of National Health (Australian Community Pharmacy Authority Rules) Determination 2006
Section 3 provides that Schedule 1 of this Determination amends the National Health (Australian Community Pharmacy Authority Rules) Determination 2006.
4. Application
Section 4 provides that this Determination applies to applications considered by the Authority, made on or after 17 March 2009.
Schedule 1
Amendments to Part 1, subsection 6(1)
Paragraph 1 removes the definition of “approved premises” and moves it to a new section 6A due to its critical importance in relation to assessing applications.
Paragraph 2 inserts a definition of “full-time” which, for prescribing medical practitioners means practising for at least 38 hours each week. Items 107, 112 and 113 refer to “full-time” medical practitioners however, the term “full-time” has proven subjective and resulted in appeals by applicants through the Administrative Appeals Tribunal/Federal Court. This definition makes clear the term “full-time”.
Time spent seeing medical centre patients at their own home or hospital is included when calculating the hours that a medical practitioner practises at the medical centre. Time spent practising at other medical centres, working at a hospital (rostered duties), attending nursing homes and undertaking administration work for the medical centre, such as staff rosters, is not counted towards the time spent practising at the medical centre.
Paragraph 3 amends the definition of “large medical centre” by requiring that the medical centre is open for at least 70 hours each week and that general practice services are provided at the medical centre during those hours. This definition relates to Item 112, paragraph 1, which requires that the proposed premises must be located in a “large medical centre”. The intention of having a pharmacy in a large medical centre is primarily to meet the needs of medical centre patients outside normal business hours, when nearby pharmacies have closed. This amended definition ensures that the medical centre is operating extended hours.
Irrespective of the hours that the medical centre operates or the number of medical practitioners rostered on during those hours, general practice services must be provided at the medical centre for least 70 hours each week. If the medical centre closes for an hour over lunchtime then that hour is not counted towards the time that the medical centre is providing general practice services, as patients are unable to obtain a consultation with a medical practitioner during that hour.
Where more than one medical practitioner’s hours overlap then the total hours that the medical centre is providing general practice services is not the combined hours of the medical practitioners, it is instead the total hours that the centre is providing general practice services.
Paragraph 4 amends the definition of “PhARIA”. PhARIA means the Pharmacy Access/Remoteness Index of Australia prepared by the National Centre for Social Applications of GIS, University of Adelaide.
PhARIA is used to determine the remoteness of a town/suburb and has classification categories from 1 through to 6 (1 meaning urban and 6 very remote).
The 2006/07 PhARIA reference is out of date. This Determination updates the PhARIA reference to 2008/09.
Paragraph 5 amends the definition of “proposed premises” to reflect the amendment made by the National Health Amendment (Pharmaceutical Benefits) Act 2007 which clarified that a pharmacist who is approved under section 90 of the Act (“approved pharmacist”) is required to supply pharmaceutical benefits to persons who are “at” those premises when the supply of the pharmaceutical benefit is made.
Amendments to Part 1, subsection 6(2)
Paragraph 6 clarifies the intention of Item 102 which provides for the relocation of a pharmacy within a rural locality. It makes clear that a pharmacist approved under the new rural pharmacy arrangements (Item 114 of the Pharmacy Location Rules) has the flexibility to relocate within the same rural town. It does not mean that pharmacists can relocate from one rural locality to another rural locality where the existing premises and the proposed premises are in the same PhARIA classification.
Amendments to Part 1, after section 6
Paragraph 7 inserts a new subsection 6A(1) to clarify situations where premises are “approved premises” and 6A(2) to clarify situations when premises are “redundant premises”.
Subsection 6A(1) provides that “approved premises” means premises in respect of which an approval under section 90 of the Act is in force. Approved premises includes premises in respect of which the Authority has recommended a pharmacist be approved, even though the pharmacist may not yet be approved to supply pharmaceutical benefits at those premises.
This means that where more than one application is received in respect of the same area, the first application to be recommended for approval will be considered for approval by the Secretary to the Department of Health and Ageing (or their delegate). The second application will then be considered by the Authority having regard to the first application that was previously recommended for approval, even though the Secretary (or their delegate) may not yet have approved that application. The Authority’s recommendation of the first application would have the effect that the second application is likely to fail to meet the requirements of the Rules. This ensures the sustainability of approved pharmacies by avoiding an oversupply of approved premises in an area that could not sustain both pharmacies if they were approved.
Subsection 6A(2) provides that “redundant premises” means premises in respect of which a pharmacist is approved under section 90 of the Act if:
- the pharmacist has ceased supplying pharmaceutical benefits at those premises; and
- the Secretary of the Department of Health and Ageing (or their delegate) has agreed not to cancel the approval under section 98 of the Act; and
- that approval is the subject of an application which has been recommended for approval by the Authority (the approval is being relocated).
Disregarding “redundant premises” will ensure the community has reasonable access to pharmaceutical benefits if another pharmacist makes an application to open a pharmacy in that area. An approved pharmacist may cease supplying pharmaceutical benefits at their approved premises (“redundant premises”) in preparation to relocate to new premises, with the agreement of the Secretary (or their delegate). If the redundant premises continued to be treated as approved premises it could cause delays in community access to pharmaceutical benefits in that particular area.
Note 1 is included to assist readers to understand that “approved premises” includes any reference to premises in respect of which a pharmacist has been approved by the Minister under subsection 90A(2) of the Act”.
Note 2 is included to assist readers to understand that “approved premises” includes any reference to a person that has been granted permission by the Secretary under subsection 91(1) of the Act.
Amendments to Schedule 1, Part 1
Paragraphs 8, 9, 10 and 11 substitute new Items 107, 108, 109 and 112.
The requirements under these new Items no longer provide the “shortest lawful access route” as an alternative distance measurement. The alternative distance measurement was used in circumstances where a “genuine barrier” to access (such as a river, a railway line, freeway) existed between the proposed premises and the nearest approved premises.
In a decision by the Administrative Appeals Tribunal (AAT) Bray v Australian Community Pharmacy Authority 2007/1509, the AAT accepted a broader interpretation of the term “genuine barrier” than what was intended. By applying its plain English meaning, that is, any obstacle such as a wall, tree, fence or building is a “genuine barrier”. The consequence of the AAT’s interpretation was to nullify the straight line distance requirement, potentially leading to a clustering of pharmacies as there will always be urban terrain.
Measuring distance by the shortest lawful access route is very subjective as there are often many alternative routes, some which may be unlawful. Removing the subjective nature of this method of measuring distance by requiring distance measurements to be by straight line simplifies the process.
The other requirements of new Items 107, 108, 109 and 112 are the same as those previously in force.
Paragraphs 8 and 9 clarifies that, in Items 107 and 108 the catchment area for the proposed premises must contain “only 1 approved premises”, rather than “1 approved premises”.
Paragraph 11 clarifies that, in Item 112 there must be at least 8 full-time (or equivalent) medical practitioners practising at the medical centre in each of the 6 months before the date the application is lodged, not an average over the 6 months.
For example, if an application is made on 12 July then there must be the equivalent of at least 8 full-time (or equivalent) medical practitioners practising at the medical centre during the months of January, February, March, April, May and June as well as on 12 July (the date the application is made).
The term “or equivalent” as it relates to full-time medical practitioners has proven subjective and has been the subject of appeals. The meaning of “full-time” has been defined in paragraph 2.
The “equivalent” of full-time means that more than one part-time medical practitioner’s hours can be combined, similarly one medical practitioner’s hours can be considered the equivalent of more than one full-time medical practitioner. For example, if one part-time medical practitioner practises 20 hours each week and another part-time medical practitioner practises 18 hours each week, then they will be considered the equivalent of one full-time medical practitioner (i.e. their combined practice hours equal 38 hours). Similarly, if one medical practitioner practises 57 hours each week then they are considered the equivalent of one and a half full-time medical practitioners.
Amendments to Schedule 1, Part 2
Paragraphs 12 and 13 make substitutions to Items 113 and 114 to clarify that applications to establish a new pharmacy in an urban locality must be made under the “new pharmacy (urban locality)” Item 113 and applications to establish a new pharmacy in a rural locality must be made under the “new pharmacy (rural locality)” Item 114.
Item 113 was intended to be used to establish a new pharmacy in urban areas and Item 114 was intended to be used to establish a new pharmacy in rural areas. A drafting anomaly allowed Item 113 to be used to establish new pharmacies in rural areas. This has caused problems where there was already a pharmacy in the rural area with insufficient population to sustain two pharmacies, as the distance between the two pharmacies only needed to be 1.5 km, rather than 10 km.
PhARIA means the Pharmacy Access/Remoteness Index of Australia prepared by the National Centre for Social Applications of GIS, University of Adelaide.
PhARIA is used to determine the remoteness of a town/suburb and has classification categories from 1 through to 6. Urban areas are those classified as PhARIA 1 and rural areas are those classified as PhARIA 2-6.
Amendments to Schedule 2
Paragraph 14 substitutes a new paragraph (b) in Item 201.
201(b)(i) clarifies that the use of proposed premises for the purpose of a pharmacy must be permissible under the applicable State or Territory laws relating to land development. Council zoning alone is not sufficient if the local planning laws require further approvals be obtained before the use of the proposed premises as a pharmacy is permitted. Further explanation of this requirement is provided at paragraph 15.
201(b)(ii) reflects the terminology in subsection 90(3D)(b) of the Act, that is, the proposed premises must be accessible by members of the public, not just certain classes of the public.
This amendment also supports the purpose of the Pharmaceutical Benefits Scheme, which is to ensure that pharmaceutical benefits are available to the Australian community at large and not restricted to certain members of the public, such as patients of a particular medical centre.
Paragraph 15 inserts a Note after paragraph (d) of Item 201. This Note is included to assist readers to understand the new subparagraph (b)(i) which requires that proposed premises can be used for the operation of a pharmacy under the relevant land development laws. It provides an example of circumstances which would meet the requirement.