EXPLANATORY STATEMENT
National Health Act 1953
National Health (Pharmaceutical benefits supplied by private hospitals) Amendment Determination 2012 (No. 1)
PB 83 of 2012
Authority
Subsection 99(4) of the National Health Act 1953 (the Act) provides that an approved hospital authority is entitled to payment from the Commonwealth at such rates and subject to such conditions as the Minister determines, in respect of the supply of pharmaceutical benefits to patients receiving treatment in or at an approved hospital. The National Health (Pharmaceutical benefits supplied by private hospitals) Determination 2010 (the Principal Determination) determines the rates and conditions of payments to private hospitals. Another determination under subsection 99(4) determines the rates and conditions of payments to public hospitals.
Purpose
This Amendment Determination amends the Principal Determination to reflect amendments to the Act made by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2012 which commence on 1 October 2012.
The main amendment to the Act which is reflected in this Determination is 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.
Details of the amendments made by this Determination are set out in the Attachment.
Background
Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.
Subsection 85(1) provides that benefits are to be provided by the Commonwealth in accordance with Part VII in respect of pharmaceutical benefits.
The Principal Determination sets out the rates of payment for the supply of pharmaceutical benefits by a private hospital approved under section 94 of the Act.
Consultation
The changes made by this determination are technical changes which are consequential to amendments being made to other instruments. There is no change to current practice as a result of these amendments and therefore no consultation on this determination was considered necessary.
This Determination commences on 1 October 2012.
This Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
Details of the National Health (Pharmaceutical benefits supplied by private hospitals) Amendment Determination 2012 (No. 1) – PB 83 of 2012
Section 1 Name of Determination
This section provides that the title of the Determination is the National Health (Pharmaceutical benefits supplied by private hospitals) Amendment Determination 2012 (No.1) and that it may also be cited as PB 83 of 2012.
Section 2 Commencement
This section provides for the Determination to commence on 1 October 2012.
Section 3 Amendment of National Health (Pharmaceutical Benefits Supplied By Private Hospitals) Determination 2010
This section provides that Schedule 1 amends the National Health (Pharmaceutical benefits supplied by private hospitals) Determination 2010 made on 21 September 2010.
SCHEDULE 1 – AMENDMENTS
Item [1] – Subsection 5(1)
This item inserts a new definition of the term approved ex-manufacturer price. From 1 October 2012 this will be the base PBS price in the Act and legislative instruments. The Minister will agree an approved ex-manufacturer price for each brand of a pharmaceutical item with the responsible person for the brand, or will determine an approved ex manufacturer price if no agreement can be reached. Commonwealth payments in relation to the supply of pharmaceutical benefits will be based on the approved ex-manufacturer price under the Principal Determination and other legislative instruments from 1 October 2012.
Item [2] – Subsection 5 (1), definition of Approved Pharmacists Determination
This item amends the reference to another legislative instrument to reflect the current practice of identifying legislative instruments by reference to the relevant power exercised in the instrument rather than the title of the instrument.
Item [3] – Subsection 5(1), definition of approved price to pharmacists
This item omits the definition of approved price to pharmacists. The term will no longer be used in the Act from 1 October 2012, or in any legislative instruments. It is being replaced by the approved ex-manufacturer price.
Item [4] – Subsection 5(1), definition of manufacturers’ packs
This item omits the definition of the term manufacturers’ packs as it will no longer be used in the Principal Determination. The item also inserts a definition of the new term pack quantity which replaces manufacturers’ packs in the Principal Instrument.
Pack quantity has the same meaning as in the Act. This is a new term in the Act from 1 October 2012. The Minister will determine pack quantities for each listed brand of a pharmaceutical item. Responsible persons will request the Minister to determine pack quantities for each of their PBS pack sizes. The approved ex-manufacturer price for each brand of a pharmaceutical item will be agreed or determined by reference to the lowest pack quantity for any brand of that pharmaceutical item. All other pack quantities will have proportional ex-manufacturer prices calculated under the Act.
Item [5] – Subsection 5(1)
Item 5 inserts a definition of proportional ex-manufacturer price. The term has the same meaning as in the Act.
Item [6] – Subsection 5(1), definition of storage and handling mark-up
This item, in the definition of storage and handling mark-up, omits “the ex-manufacturer price of the benefit” and replaces it with “the approved ex-manufacturer price or the proportional ex-manufacturer price of the pack quantity of the benefit”.
Item [7] – Subsection 5(2)
This item omits the subsection which defined manufacturers’ pack. That term will no longer being used in the Principal Determination. It is being replaced with the new term pack quantity.
Item [8] – Subsection 11(1)
This item substitutes a new subsection 11(1). The changes between the existing subsection and the new subsection reflect the changes to the Act coming into force on 1 October 2012 and are not intended to affect the Commonwealth price for ready-prepared pharmaceutical benefits. The key changes are the replacement of the approved price to pharmacists with the approved ex-manufacturer price or the proportional ex-manufacturer price, and the use of the new term pack quantity.
Items [9] to [12] – Subsections 12(1) and (2)
These items amend cross-references to subparagraphs of subsection 11 as a consequence of the substitution of a new subsection 11 which has a different format.
Item [13] – Section 14
This item substitutes a new chapeau to section 14. There has been no effect on the operation of the section. The new chapeau uses the new term pack quantity and includes a different cross-reference to a subparagraph of section 11 due the new format of the substituted section 11.
Item [14] – Section 14, Step 1(a)
This item substitutes a new chapeau to Step 1 and a new paragraph (a) to the Step. There has been no change in the operation of the Step; the changes introduce the new terms pack quantity, approved ex-manufacturer price and proportional ex-manufacturer price.
Item [15] – Section 14, Step 2
This item substitutes the new term pack quantity.
Item [16] – Section 15
This item substitutes a new section based on the new term pack quantity. There has been no substantive change in meaning.
Item [17] – Section 16
This item substitutes a new section 16 and a new heading to the section. The changes are to references to another legislative instrument and have been made to reflect the current practice of identifying legislative instruments by reference to the relevant power exercised in the instrument rather than the title of the instrument.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
National Health (Pharmaceutical benefits supplied by private hospitals) Amendment Determination 2012 (No. 1) - PB 83 of 2012
This 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 legislative instrument is to amend the Principal Determination 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 Determination sets out the rates of payment for the supply of pharmaceutical benefits by a private hospital approved under section 94 of the Act.
The changes are technical in nature, being consequential on amendments to the Act. New terminology in the Act (approved ex-manufacturer price, proportional ex-manufacturer price and pack quantity) has been introduced to ensure the Principal Determination continues to have its intended operation in the context of the amended Act.
Human rights implications
This legislative instrument engages Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) 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 Pharmaceutical Benefits Scheme (PBS) is a benefit scheme which assists with advancement of this human right by providing for subsidised access by patients to medicines.
Conclusion
This legislative instrument is compatible with human rights because it advances the protection of human rights.
Tanya Plibersek
Minister for Health