EXPLANATORY STATEMENT
National Health Act 1953
National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2026
Purpose and operation
The National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2026 (this instrument) revokes and remakes the National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2016 which sunsets on 1 April 2026.
This instrument supports eligible Aboriginal or Torres Strait Islander people to access affordable medicines listed on the Pharmaceutical Benefits Scheme (PBS) at a reduced cost, where the patient, in the opinion of a registering practitioner would experience setbacks in the prevention or ongoing management of a medical condition without adherence to the course of treatment and is unlikely to adhere to the course of treatment without assistance under this instrument.
This instrument reduces the PBS co-payment charge to a patient to either, the concessional rate (when the general co-payment charge is applicable under normal PBS legislation), or with no co-payment (when the concessional co-payment charge is applicable under normal PBS legislation).
This instrument applies to pharmaceutical benefits listed on the PBS, including medicines supplied under section 100 of the National Health Act 1953, where those medicines are supplied by approved community pharmacists (approved under section 90 of the National Health Act 1953), approved medical practitioners (approved under section 92 of the National Health Act 1953) and approved private or public hospital authorities (approved under section 94 of the National Health Act 1953).
Medicines supplied under section 100 special arrangements are PBS medicines; however, some section 100 medicines are supplied exclusively under separate section 100 special arrangements that establish specific supply, charging and payment rules. Where a medicine is supplied under a section 100 special arrangement, the operation of this instrument depends on the terms of that arrangement. The relevant section 100 special arrangement instrument specifies whether, and the extent to which, the provisions of this instrument apply to supplies made under that arrangement.
The cost of medicines remains a barrier to access for Aboriginal or Torres Strait Islander people, and the purpose of this instrument is to provide more affordable access to medicines on the PBS increasing medication adherence.
This instrument is substantially the same as the National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2016 but where changes were needed, this was undertaken to provide clarity and consistency. The changes include updating or removing obsolete references and refining definitions. The provisions have been rewritten, reordered, and renumbered using modern drafting principles and language.
Further, this instrument makes consequential amendments to the following Section 100 Special Arrangements to ensure the PBS co-payment reduction under this instrument is applied:
- National Health (Botulinum Toxin Program) Special Arrangement 2025;
- National Health (Efficient Funding of Chemotherapy) Special Arrangement 2024;
- National Health (Growth Hormone Program) Special Arrangement 2025;
- National Health (Highly Specialised Drugs Program) Special Arrangement 2021; and
- National Health (IVF Program) Special Arrangement 2025.
Background
The Closing the Gap (CTG) PBS Co-payment Program provides eligible Aboriginal or Torres Strait Islander people with access to PBS medicines at a further reduced cost to the general patient co-payment and concessional patient co-payment.
Registering practitioners can register a patient for the supply of pharmaceutical benefits in accordance with this instrument on the condition that the patient is entitled to receive pharmaceutical benefits, provides consent to the practitioner to receive supplies in accordance with the instrument and the registering practitioner has deemed the patient requires support under this instrument to achieve medication adherence.
Once a patient is registered for the CTG PBS Co-payment Program, the patient is identifiable as receiving support under this instrument to approved PBS suppliers through the supplier’s prescription dispensing software or the Health Professional Online Services (HPOS) system operated by Services Australia.
Section 100 special arrangements
This instrument will make consequential amendments to five Section 100 Special Arrangements. These specialised pharmaceutical benefits are for the treatment of specific conditions to eligible patients, which because of their clinical use and other special features, have restrictions on how they can be prescribed and supplied.
The PBS Botulinum Toxin Program operates under the National Health (Botulinum Toxin Program) Special Arrangement 2025 and helps eligible patients access PBS-subsidised botulinum toxin to assist in the treatment of conditions such as facial spasms, urinary incontinence, chronic migraine, and symptoms associated with cerebral palsy.
The PBS Efficient Funding of Chemotherapy (EFC) Program operates under the National Health (Efficient Funding of Chemotherapy) Special Arrangement 2024 and provides access to chemotherapy medicines used for the treatment of cancer that are administered through infusion or injection at public or private hospitals.
The PBS Growth Hormone Program operates under the National Health (Growth Hormone Program) Special Arrangement 2025 and provides access to PBS subsidised growth hormone medicines to eligible patients to assist in the treatment of specific conditions.
The PBS Highly Specialised Drugs (HSD) Program operates under the National Health (Highly Specialised Drugs Program) Special Arrangement 2021 and provides access to specialised medicines for the treatment of chronic conditions which, because of their clinical use and other special feature, have restrictions on where these can be prescribed and supplied.
The PBS In-Vitro Fertilisation (IVF) Program operates under the National Health (IVF Program) Special Arrangement 2025 and provides access to medicines for use in in-vitro fertilisation.
Authority
The National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2026 is made under section 100 of the National Health Act 1953.
Subsection 100(1) empowers the making of special arrangements to ensure adequate supply of pharmaceutical benefits.
Section 100(2) provides that the Minister may vary or revoke a special arrangement made under subsection 100(1).
Subsection 100(3) provides that Part VII of the Act and instruments made for its purposes have effect subject to a special arrangement made under subsection 100(1).
Reliance on subsection 33(3) of the Acts Interpretation Act 1901
Subsection 33(3) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
Commencement
This instrument commences on 1 April 2026.
Consultation
Key stakeholders participated in consultations regarding the remaking of this instrument.
Key stakeholders, within the Department of Health, Disability and Ageing (Department) were consulted to ensure that the current CTG PBS Co-payment Program and subsequent Special Arrangement requirements were working, functional and that no issues had been encountered. There were no issues raised from stakeholders.
The following external stakeholders were also consulted:
- Services Australia as the administrators of the CTG PBS Co-payment Program.
- National Aboriginal Community Controlled Health Organisation (NACCHO) as the national peak body representing Aboriginal Community Controlled Health Organisations (ACCHOs) across Australia.
- Attorney-General’s Department
- National Indigenous Australians Agency
Consultations were conducted by email and virtual meetings.
All stakeholders consulted agreed that the CTG PBS Co-payment Program Special Arrangement remains fit for purpose and should be replaced by an instrument substantially the same in form.
General
This instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Details of this instrument are set out in Attachment A.
This instrument is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.
This instrument incorporates by reference the following disallowable legislative instruments, or provisions of the following disallowable legislative instruments:
- National Health (Botulinum Toxin Program) Special Arrangement 2025;
- National Health (Efficient Funding of Chemotherapy) Special Arrangement 2024;
- National Health (Growth Hormone Program) Special Arrangement 2025;
- National Health (Highly Specialised Drugs Program) Special Arrangement 2021; and
- National Health (IVF Program) Special Arrangement 2025.
These instruments or relevant provisions of the instruments are applied, adopted or incorporated as in force from time to time and the instruments can be accessed free of charge on the Federal Register of Legislation www.legislation.gov.au.
ATTACHMENT A
Details of the National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2026
Part 1 – Preliminary
Division 1 – General
Section 1 – Name
This section provides that the name of the instrument is the National Health (Closing the Gap – PBS Co‑payment Program) Special Arrangement 2026. The instrument may also be cited as PB 25] of 2026.
Section 2 – Commencement
This section provides that the instrument commences on 1 April 2026.
Section 3 – Authority
This section provides that the instrument is made under section 100 of the National Health Act 1953.
Section 4 – Simplified outline
This section provides a simplified outline of the instrument. The outline has been included to assist readers to understand the substantive provisions of the instrument rather than to replace the provisions.
Section 5 – Definitions
This section defines key terms used in the instrument, including CTG registered patient, CTG supplier and special arrangement supply, and adopts definitions from the National Health Act 1953 and Regulations where appropriate.
Section 6 – Definition of a CTG special arrangement supply
This section explains the conditions that must be met for a patient to be supplied a pharmaceutical benefit under this instrument. A pharmaceutical benefit counts as a special arrangement supply only when the patient is registered under this instrument, the supplier is an approved CTG supplier, and for pharmaceutical benefits supplied under a medication chart prescription – the patient must be receiving funded aged-care services in an approved residential care home.
Section 7 – Pharmaceutical benefits covered by this instrument
This section provides that the instrument applies to pharmaceutical benefits generally available for supply under Part VII of the National Health Act 1953, other than prescriber bag supplies, and notes the interaction with other section 100 special arrangements.
Division 2 – CTG registered patients
Section 8 – Registration of eligible patients
This section provides the conditions that a patient must meet to be registered for the CTG PBS Co-payment Program. A patient must be entitled to receive pharmaceutical benefits, identifies as an Aboriginal or Torres Strait Islander person, provides consent to the registering practitioner to receive pharmaceutical benefits under this instrument, and in the opinion of the registering practitioner, the patient would experience setbacks in the prevention or ongoing management of a medical condition if the patient did not adhere to a course of treatment involving pharmaceutical benefits, and is unlikely to adhere to the course of treatment without assistance under this instrument. A registering practitioner must be a PBS prescriber or an individual registered in the Aboriginal and Torres Strait Islander health practice profession or has been allocated an identification number by the Chief Executive Medicare. Further, this section sets out how registration can be made once the conditions are satisfied.
The decision to register a patient for the CTG PBS Co-payment Program is a clinical decision made by registering practitioners in the course of providing care. The registering practitioner assesses clinical need and treatment adherence risk, and this judgement cannot be substituted by an administrative review body.
The registration decision does not remove entitlement to PBS medicines; it simply enables a reduced co‑payment where a practitioner considers additional support is clinically appropriate. A patient is eligible to seek registration from another registered practitioner, and practitioners are subject to oversight under the National Registration and Accreditation Scheme (the Australian Health Practitioner Regulation Agency).
Part 2 – Supply of pharmaceutical benefits under this instrument
Section 9 – General modifications
This section combines sections 6 and 10A of the National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2016 to preserve intent but remove repetition.
The section provides that special arrangement supplies under this instrument are not eligible for increased discounting. Increased discounting under Part VII of the National Health Act 1953 permits pharmacies to reduce the patient charge below the general PBS co‑payment as this instrument provides a reduced or nil PBS co‑payment it does not permit increased discounting of pharmaceutical benefit supplies to a patient registered under this instrument.
Further, this section provides that co‑payment supplies are to be treated as a normal PBS supply in accordance with Part VII of the National Health Act 1953 under this instrument. For pharmaceutical benefits supplied not under this instrument, no PBS claim is made if the dispensed price of a medicine is below the patient PBS co‑payment. This modification ensures patients under this instrument receive the reduced or nil PBS co-payment charge and that suppliers use the mandated PBS claiming pathway irrespective of the dispensed price.
Section 10 – Copayment reduction etc.
This section modifies the application of section 87 of the National Health Act 1953 for special arrangement supplies under the CTG PBS Co-payment Program. It sets nil
co-payment for concessional beneficiaries and a concessional charge for general patients and includes rules for special patient contributions and delivery charges. For special patient contribution rules, there are medicine brands that have an extra charge called a special patient contribution, under this instrument, a patient can be charged where the Commonwealth will not reimburse the special patient contribution amount. This is also applicable to private hospitals except in instances where it is an early supply to certain concessional patients. For delivery charges, this provides clear instruction that a delivery fee can be charged for medicines supplied under this instrument where the PBS regulations under section 87(4) permit it.
Section 11 – Value for safety net purposes
This section modifies section 17A of the National Health (Pharmaceutical Benefits) Regulations 2017 applies to supplies under this instrument. Section 17A sets the value that counts towards a patient’s PBS Safety Net - usually the PBS co‑payment payable by the patient or, for certain supplies, the attributed amount determined under subsection 84C(7) of the Act.
This section provides that for supplies under this instrument, the Safety Net is aligned with the charging rules established under section 10. This is that concessional patients have no
co-payment, and general patients are charged the concessional co‑payment charge, and some under co‑payment supplies are treated as Part VII supplies. For supplies under this instrument, the Safety Net counts the concessional co‑payment where the patients
co-payment charge is reduced to nil, the reduced general co-payment if that would otherwise have applied, or $42.50 if the full general co-payment would have applied. This ensures patients under this instrument accumulate towards the Safety Net at the correct rate, and under co‑payment and price‑attributed items are handled consistently with the modified co‑payment arrangements established by section 10.
In 2022, the National Health Act 1953 was amended to reduce the PBS general patient charge from $42.50 to $30 (indexed annually) and enable approved pharmacists and medical practitioners to apply an optional discount to certain PBS medicines with a Commonwealth price between the new co-payment of $30 and the current co-payment of $42.50. The National Health (Closing the Gap—PBS Co-payment Program) Special Arrangement Amendment (General Co-payment) Instrument 2022 ensured patients registered under the National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2016 continued to receive the same amount of $42.50 to count towards their PBS Safety Net, rather than the reduced co-payment amount. This policy position will remain in place until the PBS general patient charge exceeds $42.50.
Part 3—Payment for supply of pharmaceutical benefits under this instrument
Section 12 – Payment by Commonwealth
This section sets out how Section 99 of the National Health Act 1953 operates to ensure suppliers are reimbursed for lost co-payment contribution when patients have a reduced or nil co-payment for supplies under this instrument. When a CTG supplier must charge a reduced or nil co-payment under this instrument, the Commonwealth will pay the CTG supplier the difference between the amount charged under this instrument and the full amount they would have otherwise been paid under the Act.
Section 13 – Claim for payment
This section modifies section 99AAA of the National Health Act 1953 for CTG claims. Section 99AAA deals with how claims for payment for the supply of pharmaceutical benefits must be made. Section 13 specifies that claims must be lodged with the Chief Executive Medicare, sets out how claims for under co‑payment supplies are to be made, and indicators for manual claims to identify that the supply is under this instrument.
Part 4 – Transitional arrangements
Division 1 – Transitional provisions in relation to the commencement of this instrument
Sections 14 – Things done under the National Health (Closing the Gap–PBS Co-payment Program) Special Arrangement 2016
This section provides continuity between the National Health (Closing the Gap–PBS
Co-payment Program) Special Arrangement 2016 (repealed instrument) and this instrument. It means things done under the repealed instrument continues to be valid under this instrument, as long as same actioned would be allowed under the new instrument.
Sections 15 – Existing registered patients
This section provides confirmation to patients registered under the repealed instrument are automatically treated as registered under this instrument and do not need to re-enrol for the program ensuring uninterrupted access to the support provided under this instrument.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2026
This Disallowable Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Disallowable Legislative Instrument
The National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2026 (this instrument) replaces the National Health (Closing the Gap – PBS Co-payment Program) Special Arrangement 2016 which sunsets on 1 April 2026.
The cost of medicines remains a barrier to access for Aboriginal or Torres Strait Islander people, and the purpose of this instrument is to provide more affordable access to medicines on the Pharmaceutical Benefits Scheme (PBS), increasing medication adherence.
A registering practitioner will assess whether, in their opinion, the patient would experience setbacks in the prevention or ongoing management of a medical condition if they did not adhere to the course of treatment and is unlikely to adhere to the course of treatment without financial assistance under this instrument.
Once a registering practitioner has registered a patient under this instrument, the cost of medicines listed on the PBS reduces to either, the concessional rate (when the general
co-payment charge is applicable under normal PBS law), or with no co-payment (when the concessional co-payment charge is applicable under normal PBS law).
This instrument applies to all medicines on the PBS, including all Section 100 medicines, supplied by approved community pharmacists (approved under section 90 of the National Health Act 1953), approved medical practitioners (approved under section 92 of the National Health Act 1953) and approved private or public hospitals authorities (approved under section 94 of the National Health Act 1953).
This instrument is substantially the same as the National Health (Closing the Gap – PBS
Co-payment Program) Special Arrangement 2016 but changes were undertaken to provide clarity and consistency.
Human rights implications
This instrument is compatible with human rights because it promotes the right to health and equality under Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). It does not impose any limitations on rights; rather, it positively advances access to essential medicines for Aboriginal or Torres Strait Islander people.
This legislative instrument engages Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).
The instrument removes financial barriers and promotes equitable access to essential medicines for eligible Aboriginal or Torres Strait Islander people through reducing or eliminating co-payments for PBS medicines.
Conclusion
This legislative instrument is compatible with human rights because it promotes the right to health and equality under Articles 2 and 12 of the ICESCR. It does not impose any limitations and instead delivers a positive measure to close the health gap for Aboriginal or Torres Strait Islander people.
Sarah Norris
Assistant Secretary
Community Access Programs Branch
Technology Assessment and Access Division
Department of Health, Disability and Ageing