EXPLANATORY STATEMENT
National Health Act 1953
National Health Legislation Special Arrangement Amendment (Wholesale Mark‑up) Instrument 2026
PB 57 of 2026
Authority
The Instrument is made under sections 85, 85A, 88, 99 and 100 of the National Health Act 1953.
Section 85 of the National Health Act 1953 (the Act) provides that the Minister can define what drug(s) or medicinal preparation(s) constitute a pharmaceutical benefit under the Pharmaceutical Benefits Scheme (PBS) and the circumstances on which a medicine is prescribed, used and/or supplied.
Section 85A of the Act provides that the Minister can determine the form(s) of a pharmaceutical benefit and how it can be prescribed including prescribing limits and other conditions that must be satisfied for that pharmaceutical benefit when prescribed.
Section 88 of the Act provides that the Minister can define the different classes of health professionals who can prescribe PBS subsidised medicines and determine the scope of prescribing by each health professional by a legislative instrument.
Section 99 provides for the Commonwealth payment of approved suppliers of PBS medicines.
Section 100 of the Act enables the Minister to make special arrangements for the supply of pharmaceutical benefits, and 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 National Health Legislation Special Arrangement Amendment (Wholesale Mark-up) Instrument 2026 (the Amendment Instrument) amends the National Health (Highly Specialised Drugs Program) Special Arrangement 2021, the National Health (Growth Hormone Program) Special Arrangement 2025, the National Health (IVF Program) Special Arrangement 2025 and the National Health (Paraplegic and Quadriplegic Program) Special Arrangement 2021 (Principal Instruments), which are made under the National Health Act 1953.
The Amendment Instrument introduces a wholesale mark-up (WMU) on specific section 100 PBS medicines. The Amendment Instrument implements an agreement between the Australian Government and the National Pharmaceutical Services Association Limited (NPSA), the First Pharmaceutical Wholesaler Agreement (1PWA), that commenced on 19 December 2024.
The 1PWA is a five-year agreement between the Commonwealth and the NPSA to apply payments to pharmaceutical wholesalers for holding and supplying pharmaceutical benefits. The 1PWA also provides for the introduction of a new four-tier WMU payment calculation from 1 July 2026 as part of the dispensed price for approved pharmacists supplying specific section 100 PBS medicines.
As agreed by the Australian Government, the Amendment Instrument applies from 1 July 2026 to the dispensed price for specific special arrangement supply of section 100 pharmaceutical benefits when supplied by an approved pharmacist.
The same WMU four-tier structure has also been applied to general schedule PBS medicines under section 85 of the Act separately in the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2020, as agreed under the 1PWA.
For supply by an approved pharmacist under the Growth Hormone Program, Highly Specialised Drugs Program and the IVF Program, the Amendment Instrument includes the WMU as part of the dispensed price by adding the applicable WMU to the approved ex-manufacturer price or the proportional ex‑manufacturer price (as applicable) for each pack quantity to determine the ‘price to pharmacist’, as defined in the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2020. The ‘price to pharmacist’ means the approved ex‑manufacturer price or proportional ex‑manufacturer price for the particular quantity of the specific section 100 PBS medicines, plus the WMU for that medicine, worked out in the table under section 11 of the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2020.
Where relevant, for the specific section 100 PBS medicines covered under this instrument that are dispensed by an approved pharmacist, the dispensed price may include:
the price to pharmacist: the approved ex-manufacturer price or proportional ex-manufacturer price (where applicable), plus applicable WMU for that medicine
the ready-prepared dispensing fee
a mark-up for ready-prepared pharmaceutical benefits
the dangerous drug fee, if applicable.
There are no changes under these programs for approved suppliers, other than for approved pharmacists.
The National Health (Paraplegic and Quadriplegic Program) Special Arrangement 2021 differs from the other Principal Instruments as the existing WMU already applies to the Paraplegic and Quadriplegic Program. The Amendment Instrument ensures that 1 July 2026 the new WMU replaces the existing WMU as it applied to the Paraplegic and Quadriplegic Program.
Consultation
The NPSA, and the Pharmacy Guild of Australia (the Guild), have been extensively consulted on these changes and have agreed that these changes be implemented. The NPSA and the Guild have each signed separate agreements with the Australian Government that these changes be implemented. The NPSA signed the 1PWA setting out the WMU changes being implemented in this Amendment Instrument. On 4 June 2026, the Guild signed an addendum to the Eighth Community Pharmacy Agreement recognising the WMU changes set out in the 1PWA. These agreements are publicly available on the Department of Health, Disability and Ageing website.
In April and May 2026, pharmaceutical wholesalers, PBS claiming software providers and medicine manufacturers were consulted on the effect of the changes and provided test data for the purposes of preparing their systems for the 1 July 2026 changes.
A publicly available fact sheet was published on the Department of Health, Disability and Ageing’s website in May 2026 explaining the changes.
Commencement
This Amendment Instrument commences on 1 July 2026.
General
This Amendment Instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Details of this Amendment Instrument are set out in Attachment A.
This Amendment 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.
Attachment A
Details of the National Health Legislation Special Arrangement Amendment (Wholesale Mark up) Instrument 2026
Section 1 Name
This section provides that the name of the instrument is the National Health Legislation Special Arrangement Amendment (Wholesale Mark‑up) Instrument 2026, which may also be cited as PB 57 of 2026.
Section 2 Commencement
This section provides that the instrument commences on 1 July 2026.
Section 3 Authority
This section provides that the instrument is made under sections 85, 85A, 88, 99 and 100 of the National Health Act 1953.
Section 4 Schedules
This section provides that each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms.
Schedule 1 Amendments
National Health (Growth Hormone Program) Special Arrangement 2025
Items 1 to 3 – Section 6 (Definitions of Approved Pharmacists Commonwealth Price Determination, price to pharmacists, ready‑prepared dispensing fee)
Items 1 to 3 insert definitions for Approved Pharmacists Commonwealth Price Determination and price to pharmacists into section 6, and the definition of ready-prepared dispensing fee has been updated to replace the reference to Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2020 with the new definition of Approved Pharmacists Commonwealth Price Determination in item 1.
Item 4 – Section 21
Item 4 makes a minor change to improve the wording in section 21 and the link with section 22 by removing “mentioned in section 22” and substituting with “applicable under section 22”. This amendment does not change the effect of section 21.
Items 5 to 7 – Subparagraphs 21(1)(a)(i), 21(1)(c)(i) and 21(2)(b)(i)
Items 5 to 7 amend the calculations for the dispensed price for a special arrangement supply of a growth hormone pharmaceutical benefit by an approved pharmacist. These items insert the WMU for a pack quantity as worked out in the table in section 11 of the Approved Pharmacists Commonwealth Price Determination on the basis of the approved ex-manufacturer price (AEMP) or proportional ex manufacturer price (PEMP) (as applicable) for each pack quantity supplied.
The WMU is added to the AEMP or PEMP (if applicable) within each relevant subparagraph, equivalent to the ‘price to pharmacist’, to calculate the dispensed price of a special arrangement supply of a growth hormone pharmaceutical benefit by an approved pharmacist.
For a supply other than from an approved pharmacist for which section 21 applies, the dispensed price does not include the WMU component. For approved suppliers that are not approved pharmacists, for which section 21 applies, the dispensed price calculation has not changed.
Item 8 – Section 22
This item replaces the existing mark-up applicable under section 22, and used as part of the calculation for the dispensed price under section 21.
For approved suppliers that are not approved pharmacists, there is no change to the method in which the section 22 mark-up is applied (subsections (1) and (2)). The AEMP and PEMP is used as the basis for determining the mark-up.
For an approved pharmacist supply of a ready-prepared pharmaceutical benefit, the section 22 mark-up applicable is determined by the sum of the AEMP or PEMP (as applicable) and the applicable WMU as worked out using the table in section 11 of the Approved Pharmacists Commonwealth Price Determination - price to pharmacists (PTP) means the AEMP or PEMP for the particular quantity, plus the WMU. The relevant item in the table that applies to a supply by an approved pharmacist is determined by the PTP for the maximum quantity.
National Health (Highly Specialised Drugs Program) Special Arrangement 2021
Item 9 – Section 6 (Definition of price to pharmacists)
Item 9 inserts a definition of price to pharmacists into section 6 using the same definition in the Approved Pharmacists Commonwealth Price Determination.
Items 10 to 12 – Subparagraphs 32(1)(a)(i), 32(1)(c)(i) and 32(2)(b)(i)
Items 10 to 12 amend the calculations for the dispensed price for a special arrangement supply of an HSD pharmaceutical benefit by an approved pharmacist. These items insert the WMU for a pack quantity as worked out in the table in section 11 of the Approved Pharmacists Commonwealth Price Determination on the basis of the approved ex-manufacturer price (AEMP) or proportional ex manufacturer price (PEMP) (as applicable) for each pack quantity supplied.
The WMU is added to the AEMP or PEMP (if applicable) within each relevant subparagraph, equivalent to the ‘price to pharmacist’, to calculate the dispensed price of a special arrangement supply of an HSD pharmaceutical benefit by an approved pharmacist.
For a supply other than from an approved pharmacist for which section 32 applies, the dispensed price does not include the WMU component. For approved suppliers that are not approved pharmacists, for which section 32 applies, the dispensed price calculation has not changed.
Item 13 – Section 33
This item replaces the existing mark-up applicable under section 33, and used as part of the calculation for the dispensed price under section 32.
For approved suppliers that are not approved pharmacists, there is no change to the method in which the section 33 mark-up is applied (subsections (1) and (2)). The AEMP and PEMP is used as the basis for determining the mark-up.
For an approved pharmacist supply of a ready-prepared pharmaceutical benefit, the section 33 mark-up applicable is determined by the sum of the AEMP or PEMP (as applicable) and the applicable WMU as worked out using the table in section 11 of the Approved Pharmacists Commonwealth Price Determination - price to pharmacists (PTP) means the AEMP or PEMP for the particular quantity, plus the WMU. The relevant item in the table that applies to a supply by an approved pharmacist is determined by the PTP for the maximum quantity.
National Health (IVF Program) Special Arrangement 2025
Items 14 to 17 – Section 6 (Definitions of Approved Pharmacists Commonwealth Price Determination, maximum quantity, price to pharmacists, ready‑prepared dispensing fee)
Items 14 to 17 insert definitions for Approved Pharmacists Commonwealth Price Determination and price to pharmacists into section 6. The definition of maximum quantity has been updated to reflect the substituted section 13 in item 22 of the Amendment Instrument, which moves the meaning of maximum quantity from subsection 13(2) to subsection 13(5). The definition of ready-prepared dispensing fee has been updated to replace the reference to Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2020 to the new definition of Approved Pharmacists Commonwealth Price Determination in this Amendment Instrument.
Item 18 – Section 12
Item 18 makes a minor change to improve the wording in section 12 and the link with section 13 by removing “mentioned in section 13” and substituting with “applicable under section 13”. This amendment does not change the effect of section 12.
Items 19 to 21 – Subparagraphs 12(1)(a)(i), 12(1)(c)(i) and 12(2)(b)(i)
Items 19 to 21 amend the calculations for the dispensed price for a special arrangement supply of an IVF pharmaceutical benefit by an approved pharmacist. These items insert the WMU for a pack quantity as worked out in the table in section 11 of the Approved Pharmacists Commonwealth Price Determination on the basis of the approved ex-manufacturer price (AEMP) or proportional ex manufacturer price (PEMP) (as applicable) for each pack quantity supplied.
The WMU is added to the AEMP or PEMP (if applicable) within each relevant subparagraph, equivalent to the ‘price to pharmacist’, to calculate the dispensed price of a special arrangement supply of an IVF pharmaceutical benefit by an approved pharmacist.
For a supply other than from an approved pharmacist for which section 12 applies, the dispensed price does not include the WMU component. For approved suppliers that are not approved pharmacists, for which section 12 applies, the dispensed price calculation has not changed.
Item 22 – Section 13
This item replaces the existing mark-up applicable under section 13, and used as part of the calculation for the dispensed price under section 12.
For approved suppliers that are not approved pharmacists, there is no change to the method in which the section 13 mark-up is applied (subsections (1) and (2)). The AEMP and PEMP is used as the basis for determining the mark-up.
For an approved pharmacist supply of a ready-prepared pharmaceutical benefit, the section 13 mark-up applicable is determined by the sum of the AEMP or PEMP (as applicable) and the applicable WMU as worked out using the table in section 11 of the Approved Pharmacists Commonwealth Price Determination - price to pharmacists (PTP) means the AEMP or PEMP for the particular quantity, plus the WMU. The relevant item in the table that applies to a supply by an approved pharmacist is determined by the PTP for the maximum quantity.
National Health (Paraplegic and Quadriplegic Program) Special Arrangement 2021
Item 23 - Section 4 (Definitions of Approved Pharmacists Commonwealth Price Determination, price to pharmacists)
In this item definitions for Approved Pharmacists Commonwealth Price Determination and price to pharmacists have been inserted into section 4 and have the same meaning as the definitions in the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2020.
Item 24 – Subparagraph 14(2)(a)(i)
Item 24 makes a minor change to improve the wording in subparagraph 14(2)(a)(i) by using a reference to the new definition of Approved Pharmacists Commonwealth Price Determination in item 23 of the Amendment Instrument.
Item 25 – Subsection 14(3)
Subsection 14(3) has been repealed and substituted with a provision that applies the new WMU referenced in the table in section 11 of the Approved Pharmacists Commonwealth Price Determination
The Paraplegic and Quadriplegic Program Special Arrangement differs from the Highly Specialised Drugs Program, Growth Hormone Program and IVF Program, in that it is limited to ‘authorised associations’ to supply pharmaceutical benefits available under the Special Arrangement to ‘eligible persons’. A person is an ‘eligible person’ for the purposes of the Special Arrangement if they:
(a) are an ‘eligible person’ within the meaning of the Health Insurance Act 1973, that is, eligible to receive Medicare benefits; and
(b) have paraplegia or quadriplegia; and
(c) are a member of an ‘authorised association’.
Under section 14 the WMU, as worked out in section 11 of the Approved Pharmacists Commonwealth Price Determination, has previously applied to the payment from the Commonwealth. Item 25 ensures that the new 1 July 2026 WMU as applicable in section 11 of the Approved Pharmacists Commonwealth Price Determination will apply to supply under the Paraplegic and Quadriplegic Program Special Arrangement.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
National Health Legislation Special Arrangement Amendment (Wholesale Mark‑up) Instrument 2026
PB 57 of 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 legislative instrument
The purpose of this Disallowable Legislative Instrument, made under sections 85, 85A, 88, 99 and 100 of the National Health Act 1953 (the Act), is to amend the following four special arrangement instruments: National Health (Highly Specialised Drugs Program) Special Arrangement 2021, National Health (Growth Hormone Program) Special Arrangement 2025, National Health (IVF Program) Special Arrangement 2025 and National Health (Paraplegic and Quadriplegic Program) Special Arrangement 2021, to align the calculation of wholesale mark-up (WMU) fees for specific section 100 PBS medicines with the WMU calculation introduced under the First Pharmaceutical Wholesaler Agreement (1PWA), from 1 July 2026.
The amendments insert and update relevant definitions, distinguish the calculation methodology for approved pharmacists from other approved suppliers, and apply the four-tier WMU framework to affected special arrangement medicines where supplied by approved pharmacists.
The 1PWA is a five-year agreement between the Commonwealth and the National Pharmaceutical Services Association Limited (NPSA) that commenced on 19 December 2024 and is due to expire on 31 December 2029. This agreement establishes the basis of payments to pharmaceutical wholesalers for holding and supplying pharmaceutical benefits and introduces a new four-tier WMU payment calculation to apply from 1 July 2026.
The new WMU changes are being applied to specific section 100 PBS Medicines when they are dispensed in a community pharmacy from 1 July 2026, to ensure access to PBS medicines.
Human rights implications
This Disallowable Legislative Instrument engages Articles 2, 7, 9 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The legislative instrument assists with the provision of favourable conditions of work to ensure remuneration for workers with fair wages. In addition, it also assists in the progressive realisation by all appropriate means of the right of everyone to social security, and the enjoyment of the highest attainable standard of physical and mental health.
This legislative instrument continues to assist in achieving progressively improved access to subsidised medicines by taking appropriate steps to ensure the enjoyment of the highest attainable standard of physical and mental health for all Australians.
The Pharmaceutical Benefits Scheme (PBS) is a benefit scheme which assists with providing access for people to subsidised medicines. This is a positive step towards attaining the highest standard of health for all Australians. Efficient operational arrangements for the PBS support effective administration of the scheme.
The amendments are limited to the additional amounts described above. They do not reduce access to subsidised medicines under the PBS or the protection of human rights to health and social security.
Conclusion
The Disallowable Legislative Instrument is compatible with human rights because it promotes the rights to health and social security.
Sarah Norris
Assistant Secretary
Community Access Programs Branch
Technology Assessment and Access Division
Department of Health, Disability and Ageing