National Health (Highly specialised drugs program for hospitals) Special Arrangement Amendment Instrument 2012 (No. 8) (No. PB 76 of 2012)

EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

NATIONAL HEALTH (HIGHLY SPECIALISED DRUGS PROGRAM FOR HOSPITALS) SPECIAL ARRANGEMENT AMENDMENT INSTRUMENT 2012 (No. 8)

PB 76 of 2012

Authority

Subsection 100(1) of the National Health Act 1953 (the Act) enables the Minister to make special arrangements for the supply of pharmaceutical benefits. Subsection 100(2) of the Act provides that the Minister may vary or revoke a special arrangement made under subsection 100(1).

Subsection 100(3) of the Act provides that Part VII of the Act, and instruments made for the purposes of Part VII have effect subject to a special arrangement made under subsection 100(1).

Purpose

The purpose of this legislative instrument, made under subsections 100(1) and 100(2) of the the Act, is to amend the National Health (Highly specialised drugs program for hospitals) Special Arrangement 2010 (PB 116 of 2010) (the Special Arrangement), to make changes to the special arrangement relating to the highly specialised drugs program for hospitals.

The pharmaceutical benefits supplied under the Special Arrangement are for the treatment of chronic conditions which, because of their clinical use or other special features, may only be supplied to patients receiving treatment at or from a public or private hospital having access to appropriate specialised facilities.

The amendments made by this Instrument reflect changes to the National Health (Listing of Pharmaceutical Benefits) Instrument 2010, which commence on the same day.

This instrument:

• alters the responsible person for 3 pharmaceutical benefits;
• adds 2 pharmaceutical benefits; and
• adds 1 responsible person.

This instrument also makes changes to reflect amendments to the Act made by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2012 which commence on 1 October 2012.

The principal amendments to the Act which are reflected in this instrument are:

• the removal of the concept of an approved price to pharmacists and its replacement with approved ex-manufacturer price as the base PBS price.  The approved ex-manufacturer price of a brand of a pharmaceutical item is the price agreed or determined under the Act as the appropriate maximum price for the purposes of Part VII of the Act.  The price for each brand of a pharmaceutical item must be agreed or determined by reference to the lowest pack quantity of any brand of the pharmaceutical item.  The Act provides for proportional ex-manufacturer prices for other pack quantities. 

A provision by provision description of this Instrument is contained in the Attachment.

Consultation

The amendments made by this Instrument accord with recommendations made by the Pharmaceutical Benefits Advisory Committee (PBAC). 

An ongoing and formal process of consultation in relation to matters relevant to the Special Arrangement includes the involvement of interested parties through the membership of the PBAC. 

PBAC is an independent expert body established by section 100A of the Act which makes recommendations to the Minister about which drugs and medicinal preparations should be available as pharmaceutical benefits. PBAC members are appointed following nomination by prescribed organisations and associations from consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and specialists, with at least one member selected from each of those interests or professions. Remaining members are persons whom the Minister is satisfied have qualifications and experience in a field relevant to the functions of PBAC, and that would enable them to contribute meaningfully to the deliberations of PBAC. When recommending the listing of a medicine on the Pharmaceutical Benefits Scheme (PBS), PBAC takes into account the medical conditions for which the medicine has been approved for use in Australia, its clinical effectiveness, safety and cost-effectiveness compared with other treatments.

Pharmaceutical companies were consulted throughout the process of changes to the listings on the PBS and for this Instrument. This includes consultation through the PBAC process, and agreement to final listing details.

This Instrument commences on 1 October 2012.

This Instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT

PROVISION BY PROVISION DESCRIPTION OF THE NATIONAL HEALTH (HIGHLY SPECIALISED DRUGS PROGRAM FOR HOSPITALS) SPECIAL ARRANGEMENT AMENDMENT INSTRUMENT 2012 (No. 8)

Section 1 Name of Instrument

This section provides that this Instrument is the National Health (Highly specialised drugs program for hospitals) Special Arrangement Amendment Instrument 2012 (No.8) and that it may also be cited as PB 76 of 2012.

Section 2 Commencement

This section provides that this Instrument commences on 1 October 2012.

Section 3 Amendments to PB 116 of 2010

This section provides that Schedule 1 amends the National Health (Highly specialised drugs program for hospitals) Special Arrangement 2010 (PB 116 of 2010) (the Special Arrangement).             

Schedule 1  Amendments

Item [1] – Section 4, definition of manufacturers’ pack

This item omits the definition of this term, as it is no longer used in the Special Arrangement.  The term is being replaced by the new term pack quantity.

Item [2] – Section 4, Note (4th occurring)

This item inserts a number of new terms in the Note in the section which lists a number of terms which have the same meaning in the Special Arrangement as in the Act.

Item [3] – Paragraph 28(2)(e)

This item makes a minor amendment to the paragraph so it refers to the number of packs supplied.

Item [4] – Section 37

This item substitutes a new section 37.  The section provides for the dispensed price of HSD pharmaceutical benefits supplied by public hospitals.  The new section provides for the same level of remuneration as the previous section.  The changes are changes in terminology and reflect the changes to the Act that commence on 1 October 2012.  The new section uses the new expressions pack quantity and approved ex-manufacturer price or proportional ex-manufacturer price in place of the previous expressions manufacturers’ pack and ex-manufacturer price.

Item [5] – Section 38

This item substitutes a new section 38.   The section sets out the method for working out the amount payable for a quantity less than a pack quantity.  The new section provides for the same level of remuneration as the previous section.  The changes are changes in terminology and reflect the changes to the Act that commence on 1 October 2012.  The new section uses the new expressions pack quantity and approved ex-manufacturer price or proportional ex-manufacturer price in place of the previous expressions manufacturers’ pack and ex-manufacturer price.

Item [6] – Paragraph 39(1)(a)

This item amends the paragraph by replacing the expression manufacturers’ pack with the new expression pack quantity.  It also clarifies the paragraph by making it clear that the method for working out the dispensed price applies to multiples of pack quantities and not just one pack quantity.

Item [7] – Subparagraph 39(1)(a)(i)

This item amends the subparagraph to substitute the new expressions approved ex-manufacturer price or proportional ex-manufacturer price and pack quantity.

Item [8] – Paragraph 39(1)(b)

This item amends the paragraph to substitute the new term pack quantity.

Item [9] – Paragraph 39(1)(c)

This item amends the paragraph by substituting a new chapeau and new subparagraphs (i) and (ii).   The new expressions approved ex-manufacturer price or proportional ex-manufacturer price and pack quantity have been used in the substituted provisions.  It has also been made clear that paragraph (c) sets out the method for working out the dispensed price where the quantity ordered and supplied is greater than a multiple of a pack quantity, and not just greater than a single pack quantity.

Item [10] – Paragraph 39 (2)(b)

This item removes the reference to the pharmaceutical benefit, stavudine as a powder for oral solution 1 mg per mL, 200mL, as it is no longer listed on the PBS.

Item [11] – Section 40

This item substitutes a new section 40.  The new section uses the new expressions pack quantity and approved ex-manufacturer price or proportional ex-manufacturer price in place of the previous expressions manufacturers’ pack and ex-manufacturer price.  It also differs from the existing section in that it provides for a mark-up based on the price for the maximum quantity of the pharmaceutical benefit, rather than the price for the particular pack quantity.  The new section reflects the way mark-ups are calculated in practice.  The determination made under paragraph 98B(1)(a) of the Act, which sets out the method for working out Commonwealth payments to approved pharmacists for the supply of pharmaceutical benefits, also provides for mark-ups based on the price for the maximum quantity rather than the actual quantity supplied.   The maximum quantity is the maximum for prescribing purposes determined under paragraph 85A(2)(a) of the Act.

Item [12] – Section 41

This item substitutes a new section 41.  The section sets out the method for working out the amount payable for a quantity less than a pack quantity.  The new section provides for the same level of remuneration as the previous section.  The changes are changes in terminology and reflect the changes to the Act that commence on 1 October 2012.  The new section uses the new expressions pack quantity and approved ex-manufacturer price or proportional ex-manufacturer price in place of the previous expressions manufacturers’ pack and ex-manufacturer price.

Item [13] – Section 43

This item omits section 43 from the Special Arrangement.  The section provided for the situation where the dispensed price of two different brands of the same pharmaceutical item would otherwise be different.  A pharmaceutical item is a drug in a form with a manner of administration.  From 1 October 2012 this situation cannot arise.  The amendments to the Act commencing on 1 October 2012 ensure that the approved ex-manufacturer prices for different brands of the same pharmaceutical item will be the same, and that their proportional ex-manufacturer prices will also be the same for the same pack quantities.  Thus, their dispensed prices under the Special Arrangement will be the same.

Item [14] – Subsection 48(1)

This item amends the references in the subsection to column headings in Schedule 4 to reflect amendments to those headings.

Item [15] – Subsection 48(2)

This item amends the references in the subsection to column headings in Schedule 4 to reflect amendments to those headings.

Items [16] to [19] – Schedule 1

These items amend Schedule 1 to the Special Arrangement in the following respects:

Brands added to this Special Arrangement

Alteration of Responsible Persons in this Special Arrangement

Addition of Responsible Person Codes to this Special Arrangement

Item [20] – Schedule 4

This item substitutes a new Schedule 4 into the Special Arrangement.  The last three columns of the Schedule have been changed to reflect amendments to the Act commencing on 1 October 2012.  The Act now provides for approved ex-manufacturer prices and proportional ex-manufacturer prices for pack quantities.  The approved ex-manufacturer price is a price for a particular pack quantity called the pricing quantity; all other pack quantities have proportional ex-manufacturer prices.  Also, claimed prices under the Act are now prices at the ex-manufacturer level rather than at the price to pharmacist level.  These changes do not affect the overall level of additional patient contributions provided for in section 48 of the Special Arrangement.