EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical benefits supplied by public hospitals) Amendment Determination 2012 (No.1)
PB 84 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 Act 1953 - Determination under subsection 99(4) (the Principal Determination) determines the rates and conditions of payments to public hospitals. Another determination under subsection 99(4) determines the rates and conditions of payments to private hospitals.
Purpose
This 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.
In addition, mark-ups used in calculating the dispensed price of a pharmaceutical benefit have been changed from a proportion to a percentage.
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 public hospital authority approved under section 94 of the Act.
Consultation
This Determination makes technical changes which are consequential to amendments to the Act and other instruments, and makes minor changes to mark-up formulas. For this reason, no consultation on this determination was undertaken.
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 public hospitals) Amendment Determination 2012 (No. 1)
Section 1 - Name of Determination
This section provides that the name of the determination is the National Health (Pharmaceutical benefits supplied by public hospitals) Amendment Determination 2012 (No. 1) and that it may also be cited as PB 84 of 2012.
Section 2 - Commencement
This section provides that the determination commences on 1 October 2012.
Section 3 - Amendment of National Health Act 1953 – Determination under subsection 99(4)
This section provides that Schedule 1 amends the National Health Act 1953 – Determination under subsection 99(4).
SCHEDULE 1 – AMENDMENTS
Item [1] - Paragraph 3
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] - Paragraph 3
The item inserts a definition of the new term pack quantity.
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 [3] - Paragraph 3, definition of "price ex-manufacturer"
This item omits the definition of price ex-manufacturer. This term is being replaced with the new terms approved ex-manufacturer price and proportional ex-manufacturer price.
It also inserts a definition of proportional ex-manufacturer price. The term has the same meaning as in the Act.
Item [4] - Paragraph 8
This item omits the paragraph of the Principal Determination which defined manufacturers’ packs. That term is no longer needed as it is being replaced with the new term pack quantity.
Items [5] and [6] - Paragraphs 9 and 11
These items substitute a new paragraph 9 and a new paragraph 11. The new paragraphs use the new terms approved ex-manufacturer price, proportional ex-manufacturer price and pack quantity. The mark-up has also been changed from a proportion to a percentage.
Item [7] - Paragraph 13A
This item omits the paragraph which excluded the listed pharmaceutical benefits from certain mark-ups. The mark-ups applying to other pharmaceutical benefits now apply to these pharmaceutical benefits also.
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 public hospitals) Amendment Determination (No. 1) 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 public hospital authority approved under section 94 of the Act.
The changes are technical in nature, being consequential on amendments to the Act, and a minor change in the way mark-ups are calculated. 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