National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019

Administered by Department of Health, Disability and Ageing

Legislation au F2019L01530 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Approved by the Minister for Health

National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019

Variation to the National Health (Pharmaceutical Benefits) Regulations 2017

Authority

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.

The National Health (Pharmaceutical Benefits) Regulations 2017 (the Principal Regulations) provide for matters relating to the Pharmaceutical Benefits Scheme.

Subsection 2(1) of the National Health Amendment (Pharmaceutical Benefits) Act 2019 (the Amendment Act) provides that Schedule 2 to the Amendment Act commenced by Proclamation. 

Schedule 2 to the Amendment Act made amendments to the Act relating to the Pharmaceutical Benefits Scheme, providing for the continuing supply of pharmaceutical benefits in the event of the bankruptcy of the pharmacist who is approved under section 90 of the Act to supply pharmaceutical benefits at particular premises (an ‘approved pharmacist’), or where there is an external administrator in relation to the pharmacy.

Subsections 4(1) to (6) of the Acts Interpretation Act 1901, read together, provide that regulations may be made between the passing and commencement of legislation on which they rely for their authority, as long as such regulations do not commence prior to the commencement of that legislation.

The Regulations commence on the commencement of Schedule 2 to the Amendment Act. In effect, the Regulations commence on proclamation of Schedule 2.

Purpose and operation of the Regulations

The purpose of the Regulations is to amend regulation 16 of the Principal Regulations to clarify that if the Secretary grants permission to an applicant to supply pharmaceutical benefits under the new provisions of the Act, the Secretary may allot a number to the approval, consistent with the Secretary’s power to allot a number to an approval granted to a person under section 90 of the Act.

Details of the Regulations are set out in the Attachment.

Consultation

The Department of Health consulted with Australian Restructuring Insolvency and Turnaround Association, the Australian Friendly Societies Pharmacy Association, the Pharmacy Guild of Australia and the Pharmaceutical Society of Australia, in relation to the changes in Schedule 2 to the Amendment Act.

No consultation for the Regulations is considered necessary as the amendments deal with internal administrative processes and are considered machinery in nature.

Regulatory impact assessment

The Office of Best Practice Regulation (OBPR) assessed the changes in Schedule 2 to the Amendment Act and found those changes had no more than a minor regulatory impact, and therefore a regulatory impact statement was not required (OBPR ID 21780).

Statement of compatibility with human rights

The Regulations are 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.

The statement of compatibility set out below has been prepared to meet that requirement.

Overview of the Regulations

The National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019 (the Regulations) amends regulation 16 of the National Health (Pharmaceutical Benefits) Regulations 2017 to implement measures relating to the Pharmaceutical Benefits Scheme (PBS), to support amendments made by the National Health Amendment (Pharmaceutical Benefits) Act 2019 (the Amending Act).

The Amendment Act enables the Secretary to grant permission to a trustee in bankruptcy to manage the supply of pharmaceutical benefits at PBS-approved pharmacy premises following bankruptcy of the approved pharmacist or where there is an external administrator in relation to the pharmacy. The Regulations provide for an administrative number to be allocated to such a permission.

Human rights implications

The Regulations are compatible with Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights by assisting with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. The PBS assists with advancement of this human right by providing subsidised access to medicines for Australians.

Schedule 2 of the Amendment Act ensures continuity of supply of PBS medicines for the community. If a pharmacy was to cease operating due to bankruptcy then the community may no longer have access to the supply of PBS medicines, which could be detrimental in communities without access to other pharmacies, such as in rural areas. The amendments will help to ensure that the community maintains reasonable access to pharmaceutical benefits.

Conclusion

The Regulations are compatible with human rights as it does not raise any human rights issues. The amendments made by the Regulations will have a beneficial impact on human rights through improved access to medicines.


Attachment

DETAILS OF THE NATIONAL HEALTH (PHARMACEUTICAL BENEFITS) AMENDMENT (SUPPLY OF PHARMACEUTICAL BENEFITS FOLLOWING BANKRUPTCY OR EXTERNAL ADMINISTRATION) REGULATIONS 2019

 

Section 1 provides for the Regulations to be referred to as the National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019.

 

Section 2 provides that the Regulations commence on the commencement of Schedule 2 to the National Health Amendment (Pharmaceutical Benefits) Act 2019.  In effect, the Regulations commence on proclamation of Schedule 2.

 

Section 3 provides that the Authority to make the instrument is under section 140 of the National Health Act 1953.

 

Section 4 provides that Schedule 1 amends the National Health (Pharmaceutical Benefits) Regulations 2017 (the Principal Regulations).

 

Schedule 1 – Amendments

 

Item [1]

This item inserts new sub-regulation 16(3) of the Principal Regulations by providing that in circumstances where the Secretary grants permission to an applicant to supply pharmaceutical benefits under subsection 91B(1), (2) or (3) of the Act, the Secretary may allot a number to the approval that, under paragraph 91B(10)(a) of the Act, is treated as having been granted to the person under section 90 of the Act. This is consistent with the Secretary’s power in sub-regulation 16(1) to allot a number to an approval granted under section 90 of the Act.

 

 

Overview

The National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019 were enacted to address the gap in ensuring the continuity of pharmaceutical benefits supply in cases where an approved pharmacist goes bankrupt or when there is an external administrator involved with the pharmacy. This regulation stems from the National Health Amendment (Pharmaceutical Benefits) Act 2019, which was enacted to facilitate the ongoing supply of pharmaceutical benefits even under such circumstances. The regulations were introduced under the authority of section 140 of the National Health Act 1953, empowering the Governor-General to establish regulations necessary for the implementation of the Act. The primary policy objective of these regulations is to maintain the uninterrupted supply of essential medicines to the community, particularly in regions where alternative pharmacy options may be scarce, thus safeguarding public health. These Regulations aim to amend the National Health (Pharmaceutical Benefits) Regulations 2017 by clarifying the administrative process when the Secretary grants permission for the supply of pharmaceutical benefits following a pharmacist's bankruptcy or external administration. By allotting an administrative number to such permissions, the Regulations ensure that the continuity of supply of pharmaceutical benefits is systematically managed. The compatibility of these Regulations with human rights is affirmed, as they support the broader objective of ensuring access to essential health services, thereby contributing to the realisation of the right to the highest attainable standard of physical and mental health.

Scope and Application

The National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019 applies to pharmacists who are approved to supply pharmaceutical benefits under the National Health Act 1953, specifically those who have been granted approval to supply benefits at particular premises. The Regulations cater to situations where an approved pharmacist becomes bankrupt or where there is an external administrator in relation to the pharmacy. They are designed to ensure the continuity of supply of pharmaceutical benefits through the Pharmaceutical Benefits Scheme (PBS) by allowing the Secretary to grant permission to a trustee in bankruptcy or an external administrator to manage the supply of pharmaceutical benefits at approved pharmacy premises. The Regulations apply nationally across Australia, extending the jurisdictional reach of the PBS to address potential disruptions in the supply of essential medicines in the event of the bankruptcy of an approved pharmacist or external administration of a pharmacy. The Regulations do not specify any exclusions or thresholds but are contingent on the provisions of the National Health Amendment (Pharmaceutical Benefits) Act 2019. The application and scope of the Regulations can be further extended or modified through subordinate instruments as necessary.

Key Provisions

The main sections of the National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019 provide for the amendment of the National Health (Pharmaceutical Benefits) Regulations 2017. Specifically, Section 1 identifies the Regulations as the National Health (Pharmaceutical Benefits) Amendment (Supply of Pharmaceutical Benefits Following Bankruptcy or External Administration) Regulations 2019. Section 2 establishes that these Regulations commence on the commencement of Schedule 2 to the National Health Amendment (Pharmaceutical Benefits) Act 2019, effectively on the proclamation of Schedule 2. Section 3 specifies that the authority to make these Regulations is derived from Section 140 of the National Health Act 1953. Section 4 details that Schedule 1 amends the National Health (Pharmaceutical Benefits) Regulations 2017. The Regulations impose specific obligations on the parties involved in the supply of pharmaceutical benefits under the Pharmaceutical Benefits Scheme (PBS). The key obligation is placed on the Secretary to grant permission to an applicant to supply pharmaceutical benefits in circumstances of bankruptcy or external administration, as provided under subsections 91B(1), (2), or (3) of the Act. Once permission is granted, the Secretary must allot a number to the approval, treating it as if it were granted under Section 90 of the Act. This is consistent with the Secretary's power to allot a number to an approval granted under Section 90 of the Act, as outlined in sub-regulation 16(1). There are no specific offences, penalties, or civil/criminal consequences outlined in the Regulations for breaches of the provisions. However, the Regulations are designed to ensure the continuity of supply of PBS medicines, thereby maintaining reasonable access to essential healthcare services, particularly in areas where the cessation of a pharmacy could significantly impact community access to medications. The primary focus of these Regulations is administrative and procedural, ensuring that the necessary approvals and allocations are made in a timely and orderly fashion to avoid disruptions in the supply of pharmaceutical benefits. This ensures compliance with the broader objectives of the Pharmaceutical Benefits Scheme, which is to provide subsidised access to medicines for Australians, thus supporting the realisation of human rights related to health.

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