National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2009L02523 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2009 No. 195

 

National Health Act 1953

National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1)

 

 

Section 140 of the National Health Act 1953 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act, and, in particular, includes prescribing the fees and allowances payable to members of a committee established under the Act, other than members who are officers of the Public Service of the Commonwealth or of a State.

 

The purpose of the Regulations is to amend the National Health (Pharmaceutical Benefits) Regulations 1960 (the Principal Regulations) by prescribing ‘reduction days’ for the purposes of subsection 99ADH(2) of the Act and setting the fees and allowances payable to the chair and members of the Drug Utilisation Sub-Committee (DUSC) and the Economics Sub-Committee (ESC), established under section 101A of the Act.

 

The amendment prescribing ‘reduction days’ is required for the purpose of issue of a notice under paragraph 99ADH(1)(d) of the Act, which provides that the Minister may give a notice related to reductions in prices for brands of pharmaceutical items listed under Part VII of the Act and subsidised by the Commonwealth.  The notice is required to state a day, which subsection 99ADH(2) provides must be a prescribed day.  The Regulations prescribe the relevant days.

 

This amendment relates to changes made to the Act and the Principal Regulations in 2007 which provided for new pricing arrangements under Part VII of the Act to enable the Commonwealth Government to capture the benefits of competition where subsidised drugs have multiple brands.  The amendment to the Principal Regulations does not represent a change to the fundamentals of the pricing arrangements introduced through the 2007 reforms.

 

The Regulations also provide that the fees and allowances payable to the chair and members of DUSC and ESC are the amounts that are payable to the chair and members of professional committees under Schedule B to the Remuneration Tribunal Determination 2008/07: Remuneration and Allowances for Holders of Part-Time Public Office.

 

DUSC and ESC are sub-committees of the Pharmaceutical Benefits Advisory Committee (PBAC), which is established under section 100A of the Act.  The primary role of PBAC is to make recommendations and give advice to the Minister for Health and Ageing (the Minister) in relation to drugs and medicinal preparations seeking to be subsidised under the Pharmaceutical Benefits Scheme (PBS), and about drugs already listed on the PBS.

 

Section 101A of the Act provides that PBAC may establish sub-committees to assist it in performing its functions. DUSC and ESC are established in accordance with section 101A of the Act.  These sub-committees undertake evaluation and analysis work to support PBAC’s deliberations.  Subsection 101A(4) provides that sub-committees established under that section (i.e. DUSC and ESC) are ‘committees’ for the purposes of section 140.

 

Details of the Regulations are set out in the Attachment.

 

Consultation has been undertaken with the Remuneration Tribunal, who felt that DUSC and ESC should be paid in accordance with regulations made under section 140 of the Act.  Consultation with DUSC and ESC was not considered necessary given that there is no substantive change of the members' entitlements.

 

No external consultation was undertaken in relation to prescribing the reduction days, however the pharmaceutical industry, through Medicines Australia and the Generic Medicines Industry Association, were consulted as part of the consultation process for the 2007 reforms, which included the price disclosure arrangements.  As this is a minor amendment and is required to give effect to existing policy, it was not considered necessary to undertake additional consultation.

 

The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

 

The Regulations commence on 31 July 2009.

 

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.


ATTACHMENT

 

Details of NATIONAL HEALTH (PHARMACEUTICAL BENEFITS) AMENDMENT REGULATIONS 2009 (NO. 1)

 

Regulation 1 – Name of Regulations

This regulation provides that the title of the Regulations is the National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1).

 

Regulation 2 – Commencement

This regulation provides for the Regulations to commence on 31 July 2009. 

 

Regulation 3 – Amendment of National Health (Pharmaceutical Benefits) Regulations 1960

This regulation provides that the National Health (Pharmaceutical Benefits) Regulations 1960 (the Principal Regulations) are amended as set out in Schedule 1.

 

Schedule 1 – Amendments

Item 1

This item prescribes 1 April or 1 August in any year as ‘reduction days’ for the purposes of subsection 99ADH(2) of the National Health Act 1953 (the Act).  After the days are prescribed, one of those reduction days may be stated in any notice sent by the Minister under paragraph 99ADH(1)(d) to ensure that price reductions for certain pharmaceuticals under the price disclosure provisions in Division 3B of Part VII of the Act operate as intended.

 

Item 2

This item inserts definitions of ‘Drug Utilisation Sub-Committee’ and ‘Economics Sub-Committee’ for Part VII of the Principal Regulations.

 

Item 3

This item provides that the fees and allowances payable to the chair and members of DUSC and ESC are the amounts that are payable to the chair and members of professional committees under Schedule B to the Remuneration Tribunal Determination 2008/07: Remuneration and Allowances for Holders of Part-Time Public Office (as amended).  This includes provision for the relevant travel tier allowance at the rate set out in Remuneration Tribunal Determination 2004/03: Official Travel by Office Holders (as amended).

 

Overview

The National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1) were enacted to address specific gaps identified in the existing regulatory framework under the National Health Act 1953. The National Health Act was established to ensure the provision of health services and the regulation of pharmaceuticals in Australia, and these regulations were introduced to refine certain aspects of the pharmaceutical pricing and committee remuneration processes. The regulations were made by the Governor-General under the authority granted by section 140 of the National Health Act, and aim to ensure that the provisions of the Act are effectively implemented. The primary objective of these amendments is to prescribe 'reduction days' for the implementation of pharmaceutical price reductions and to set appropriate fees and allowances for the Drug Utilisation Sub-Committee and the Economics Sub-Committee. These amendments ensure the smooth operation of the Pharmaceutical Benefits Scheme by providing clarity on the timing of price reductions and aligning the remuneration of committee members with established public office standards.

Scope and Application

The National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1) pertain to the National Health Act 1953 and its regulations, particularly the National Health (Pharmaceutical Benefits) Regulations 1960, by introducing specific amendments to facilitate the implementation of certain policies under the Act. These regulations apply to the Pharmaceutical Benefits Advisory Committee (PBAC) and its sub-committees, namely the Drug Utilisation Sub-Committee (DUSC) and the Economics Sub-Committee (ESC), which are tasked with evaluating and analysing drugs for potential subsidy under the Pharmaceutical Benefits Scheme (PBS). The amendment also encompasses the prescription of 'reduction days' as stipulated in subsection 99ADH(2) of the Act, which is necessary for issuing notices related to reductions in pharmaceutical prices. These regulations are applicable nationwide and are part of the Commonwealth's legislative framework, ensuring consistency and uniformity in the implementation of pharmaceutical policies across Australia. The regulations specify that the fees and allowances for the chair and members of the DUSC and ESC are aligned with those payable to the chair and members of professional committees, as determined by the Remuneration Tribunal. This ensures that these committee members receive appropriate compensation for their services in line with the tribunal's determinations. The amendments are designed to support the ongoing operations of the PBAC and its sub-committees, facilitating the evaluation and analysis required for the effective administration of the PBS. The regulations do not introduce new substantive changes to the existing pricing arrangements, instead, they provide the necessary framework for the existing policy to operate as intended. The commencement of these regulations on 31 July 2009 marked the formal enforcement of these provisions, ensuring that the amendments are applied uniformly across the country.

Key Provisions

The main operative sections of the National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1) prescribe specific dates as "reduction days" (Regulation 3, Schedule 1, Item 1) for the purposes of subsection 99ADH(2) of the National Health Act 1953 (the Act). These reduction days are necessary for the issue of a notice under paragraph 99ADH(1)(d) of the Act, which relates to reductions in prices for brands of pharmaceutical items listed under Part VII of the Act and subsidised by the Commonwealth. Furthermore, the Regulations set out the fees and allowances payable to the chair and members of the Drug Utilisation Sub-Committee (DUSC) and the Economics Sub-Committee (ESC) (Regulation 3, Schedule 1, Item 3), established under section 101A of the Act. These sub-committees assist the Pharmaceutical Benefits Advisory Committee (PBAC) in making recommendations and giving advice to the Minister for Health and Ageing in relation to drugs and medicinal preparations seeking to be subsidised under the Pharmaceutical Benefits Scheme (PBS), and about drugs already listed on the PBS. The Regulations impose certain obligations on the parties and entities they govern. For example, the Minister for Health and Ageing must state a "reduction day" when issuing a notice under paragraph 99ADH(1)(d) of the Act (subsection 99ADH(2)). Additionally, the fees and allowances payable to the chair and members of DUSC and ESC are prescribed by the Regulations and must be paid in accordance with the Remuneration Tribunal Determination 2008/07: Remuneration and Allowances for Holders of Part-Time Public Office (as amended) (Regulation 3, Schedule 1, Item 3). The Regulations also provide that the relevant travel tier allowance for the members of DUSC and ESC is set out in the Remuneration Tribunal Determination 2004/03: Official Travel by Office Holders (as amended). The Regulations do not explicitly state any offences, penalties, or consequences for breach. However, failure to comply with the requirements of the Regulations, such as not stating a "reduction day" when issuing a notice under paragraph 99ADH(1)(d) of the Act or not paying the prescribed fees and allowances to the chair and members of DUSC and ESC, may result in legal consequences under the National Health Act 1953. The Act itself may contain provisions for offences, penalties, or consequences for non-compliance with its requirements, but these are not detailed within the scope of the Regulations.

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