EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
NATIONAL HEALTH (PHARMACEUTICAL BENEFITS - EARLY SUPPLY) INSTRUMENT 2005
Purpose and operation
- The purpose of the Australian Pharmaceutical Benefits Scheme (PBS) is to provide timely, reliable and affordable access for the Australian community to necessary and cost-effective medicines.
2. The PBS is regulated by Part VII of the National Health Act 1953 (the Act), which provides for the supply of listed drugs and medicinal preparations as pharmaceutical benefits.
3. This legislative Instrument is made under subsection 84AAA(2) of the Act (the Instrument). Subsections 84AAA(2) and (3) of the Act provide that the Minister may specify, by legislative Instrument, pharmaceutical benefits for the purposes of subsection 84AAA(1) of the Act, and the Instrument may make reference to the circumstances in which the pharmaceutical benefit is supplied or any other circumstances in relation to the pharmaceutical benefit.
4. “Pharmaceutical benefit” is defined under subsection 84(1) of the Act as a drug or medicinal preparation in relation to which, by virtue of section 85 of the Act, Part VII of the Act applies.
5. Pharmaceutical benefits are specified in the Instrument for the purposes of paragraph 84AAA(1)(b) of the Act.
6. Subsection 84AAA(1) of the Act provides that a supply of a pharmaceutical benefit to a person (whether or not that supply is a supply of a kind described in paragraph 84C(4A)(a)) is an early supply of a specified pharmaceutical benefit if:
- the supply is made within 20 days after the day of a previous supply of the same pharmaceutical benefit to the person (whether or not the previous supply is a supply of a kind described in paragraph 84C(4A)(a));
- the pharmaceutical benefit is specified in an Instrument under subsection 84AAA(2); and
- the supply does not result from a prescription originating from a hospital or a day hospital facility.
7. Paragraph 84C(4A)(a) of the Act refers to repatriation pharmaceutical benefits supplied under the scheme established under section 91 of the Veterans’ Entitlements Act 1986 or supplied in accordance with a determination made under paragraph 256(1)(c) of the Military Rehabilitation and Compensation Act 2004.
8. The early supply of a specified pharmaceutical benefit includes a supply of a pharmaceutical benefit specified in the Instrument, as either a pharmaceutical benefit or a repatriation pharmaceutical benefit, within 20 days of a previous supply of the same pharmaceutical benefit, (as either a pharmaceutical benefit or a repatriation pharmaceutical benefit) to the same person. The repatriation pharmaceutical benefits supplied under the Repatriation Pharmaceutical Benefits Scheme (RPBS) which are subject to the provisions for early supply of a specified pharmaceutical benefit are those where the repatriation pharmaceutical benefit is the same as a specified pharmaceutical benefit for supply under the PBS.
9. ‘Hospital’ is defined in subsection 3(1) of the Health Insurance Act 1973 to mean a recognised hospital, a private hospital, or a hospital that is declared by the Minister to be a hospital for the purposes of that definition. ’Day hospital facility’ is defined in subsection 4(1) of the National Health Act 1953.
10. Subsections 84C(4) and 84C(4A) of the Act regulate the supply or repeated supply of pharmaceutical benefits and repatriation pharmaceutical benefits which are be taken into account in totalling amounts charged for the purpose of demonstrating eligibility for a safety net concession card or safety net entitlement card.
11. Subsection 84C(4AA) of the Act provides that the amount charged for an early supply of a specified pharmaceutical benefit must not be taken into account when determining eligibility for a concession card or entitlement card, if the supply is an early supply of a pharmaceutical benefit specified in the Instrument and the supply is not a supply of an out‑patient medication. Out-patient medication is defined in section 84 of the Act to mean a drug or medicinal preparation supplied through the out-patient department of a public hospital.
12. Subsection 87(2) of the Act sets out the amounts to be charged to patients for the supply of pharmaceutical benefits. These provisions form the basis for the patient charges which apply for general benefit prescriptions (currently up to $28.60), concessional benefit prescriptions (currently $4.60), concession card prescriptions (currently $4.60), and entitlement prescriptions (free). The provisions also set the charges for prescriptions which are an early supply of a pharmaceutical benefit. Prescriptions for repatriation pharmaceutical benefits are treated as for concessional benefit prescriptions and entitlement prescriptions.
13. Section 99 of the Act regulates the amount that pharmacists and medical practitioners who are approved under the Act to supply pharmaceutical benefits, are entitled to be paid by the Commonwealth for supplying those benefits. This includes the amount to be paid for prescriptions which are an early supply of a pharmaceutical benefit.
14. The pharmaceutical benefits specified in the Instrument are decided by the Minister for Health who can take into account the advice of the Pharmaceutical Benefits Advisory Committee (PBAC). Section 101 of the Act sets out the functions of the Pharmaceutical Benefits Advisory Committee (PBAC) in relation to making recommendations and providing advice to the Minister regarding the medicines to be declared as pharmaceutical benefits under Part VII of the Act, and any other matter concerning Part VII of the Act referred to the PBAC by the Minister. The PBAC is the independent expert body, established by section 100A of the Act, which makes recommendations to the Minister for Health and Ageing about which drugs and medicinal preparations should be available as pharmaceutical benefits. PBAC members are selected 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 the PBAC, and that would enable them to contribute meaningfully to the deliberations of the PBAC.
15. Subsection 101(3AA) allows the PBAC to make recommendations to the Minister about what should be specified in an Instrument made under 84AAA(2).
16. This Instrument was made on 20 December 2005 and will commence on 1 January 2006. The Instrument will commence at the same time as the commencement of amendments to the Act by the National Health Amendment (Budget Measures – Pharmaceutical Benefits Safety Net) Act 2005 which introduces the new arrangements for early supply of specified pharmaceutical benefits.
17. This Instrument is a legislative Instrument for the purposes of the Legislative Instruments Act 2003.
18. Details of the Instrument are set out in the Attachment.
Consultations
19. Consultation regarding implementation of new arrangements for early supply of specified pharmaceutical benefits occurred with Medicare Australia, the Department of Veterans’ Affairs, the Medical Software Industry Association (MSIA), and peak pharmacy organisations (including the Pharmacy Guild of Australia, the Pharmaceutical Society of Australia, the Australian Association of Consultant Pharmacy, and the Society of Hospital Pharmacists of Australia). The PBAC has provided advice on which pharmaceutical benefits should be specified in the Instrument.
ATTACHMENT
NOTES ON CLAUSES TO THE LEGISLATIVE INSTRUMENT
Clause 1 provides that the name of the Instrument is the National Health (Pharmaceutical Benefits – early supply) Instrument 2005.
Clause 2 provides that the Instrument commences on 1 January 2006.
Clause 3 provides definitions for terms used in the Instrument. I.M. means intramuscular; I.U. means international unit; and I.V. means intravenous.
Clause 4 provides that pharmaceutical benefits specified for the purposes of paragraph 84AAA(1)(b) of the National Health Act 1953 (the Act) are mentioned in Schedule 1.
Schedule 1
Schedule 1 specifies the pharmaceutical benefits for the purposes of paragraph 84AAA(1)(b) of the Act. The pharmaceutical benefits are listed by the pharmaceutical benefit name as declared under subsection 85(2) of the Act, and by form and strength, maximum quantity, and maximum number of repeats as determined under subsection 85(3) of the Act.