National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 6) (No. PB 58 of 2011)

Administered by Department of Health, Disability and Ageing

Legislation au F2011L01763 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

National Health Act 1953

National Health (Price and Special Patient Contribution)

Amendment Determination 2011 (No. 6)

PB 58 of 2011

 

Purpose

The purpose of this legislative instrument, made under section 85B of the National Health Act 1953 (the Act) is to amend the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010) to make changes to both the brands of pharmaceutical item that have a determined price and a claimed price and to the amount of the claimed price for certain brands of pharmaceutical items.

PB 109 of 2010 provides for price determinations in relation to brands of pharmaceutical items for which the Minister and the responsible person have not been able to make a price agreement. It also provides for the circumstances in which the Commonwealth will pay the special patient contribution resulting from these price determinations.

Authority

The Act provides for the Minister and the responsible person to agree a price that is taken to be the appropriate maximum price for sales of a brand of a pharmaceutical item to approved pharmacists (section 85AD). Section 85B of the Act applies if the Minister and the responsible person have been unable to reach an agreement.

Subsection 85B(2) provides that the Minister may determine an amount that is taken to be the appropriate maximum price for sales of a brand of a pharmaceutical item to approved pharmacists. This is termed the ‘Determined Price’.

Subsection 85B(3) provides that the Minister may determine an amount that is taken to be the price claimed by the responsible person as the appropriate maximum price for sales of the brand of the pharmaceutical item to approved pharmacists. This is termed the ‘Claimed Price’.

The Determined Price is the approved price to pharmacists (subsection 98B(3) of the Act) and is used as the basis for working out the Commonwealth price for the brand of the pharmaceutical item (subsection 98B(2) of the Act). Approved pharmacists are entitled to payment from the Commonwealth equal to the Commonwealth price less the applicable patient co-payment (section 99 of the Act).

The difference between the responsible person’s Commonwealth price (i.e., the price that would be the Commonwealth price if the responsible person’s claimed price had become the approved price to pharmacists) and the Commonwealth price for the brand is defined in subsection 85B(4) of the Act as the special patient contribution.  An approved pharmacist may charge a patient an amount equal to the special patient contribution, in addition to any applicable patient co-payment (subsection 87(2A) of the Act).

Subsection 85B(5) of the Act provides that the Minister may determine the circumstances in which the Commonwealth, rather than the patient, is to pay the special patient contribution for a brand of a pharmaceutical item.

 

Changes to PB 109 of 2010 made by this instrument

This instrument amends PB 109 of 2010  by:

  • amending Section 7 to change ‘Medicare Australia CEO’ to ‘Chief Executive Medicare’ as a consequence of the commencement of the Human Services Legislation Amendment Act 2011;
  • changing the amount of the claimed price for 3 brands of pharmaceutical items;
  • inserting 1 brand of a pharmaceutical item; and
  • omitting 3 brands of pharmaceutical items.

Consultation

This determination affects certain responsible persons with medicines listed on the PBS.  Before a pharmaceutical benefit is listed on the PBS, and from time to time thereafter, price negotiations occur between the responsible person and the Minister for the purpose of reaching a price agreement for section 85AD of the Act.  If the Minister and the responsible person cannot agree on a price, further consultation occurs with the responsible person, and thereafter the Minister determines the price that will be the approved price to pharmacists for the brand.  The Minister also determines the corresponding price claimed by the responsible person which is used to calculate the special patient contribution that will apply to the brand. 

General

A provision by provision description of the Determination is contained in the Attachment.

The instrument commences on 1 September 2011. 

This instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT

 

PROVISION BY PROVISION DESCRIPTION OF THE NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION2011 (No.6)

 

Section 1   Name of Instrument

This section provides that this instrument is the National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 6) and may also be cited as PB 58 of 2011.

Section 2   Commencement

This section provides that this instrument commences on 1 September 2011.

Section 3   Amendment of PB 109 of 2010

This section provides that Schedule 1 of the Instrument amends the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010) (“the Principal Instrument”).

Schedule 1   Amendments

Schedule 1 sets out the amendments to the Principal Instrument as follows:

Item 1 amends paragraph 7(1)(c) of the Principal Instrument to change ‘Medicare Australia CEO’ to ‘Chief Executive Medicare’.

Item 2 amends Schedule 1 of the Principal Instrument to change the amount of the claimed price for the brand of pharmaceutical item that has the listed drug ‘Alendronic acid’ and the form ‘Tablet 70 mg (as alendronate sodium)’ from $28.46 to $29.10.

Item 3 amends Schedule 1 of the Principal Instrument to insert a new entry for the brand of pharmaceutical item that has the listed drug ‘Alendronic acid with colecalciferol’, the form ‘Tablet equivalent to 70 mg (as alendronate sodium) with 140 micrograms colecalciferol’, an ‘oral’ manner of administration and the brand ‘Fosamax Plus 70 mg/140 mcg’. The determined price for this brand (for a quantity of 4) is $34.24 and the claimed price is $36.74.

Item 4 amends Schedule 1 of the Principal Instrument to remove the entry for the listed drug ‘Bromocriptine’.

Item 5 amends Schedule 1 of the Principal Instrument to remove the entry for the listed drug ‘Doxycycline’ in the form ‘Tablet 100 mg (as hydrochloride)’.

Item 6 amends Schedule 1 of the Principal Instrument to change the amount of the claimed price for the brand of pharmaceutical item that has the listed drug ‘Mirtazapine’ and the form ‘Tablet 30 mg’ from $19.84 to $20.32.

Item 7 amends Schedule 1 of the Principal Instrument to change the amount of the claimed price for the brand of pharmaceutical item that has the listed drug ‘Mirtazapine’ and the form ‘Tablet 45 mg’ from $31.57’ to $32.12.

 

 

Overview

The National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 6) was enacted to amend the National Health (Price and Special Patient Contribution) Determination 2010, addressing discrepancies in the pricing of certain pharmaceutical brands and the special patient contribution for those items. The legislation was enacted by the Minister for Health under section 85B of the National Health Act 1953, which empowers the Minister to determine the appropriate maximum price for pharmaceutical items when an agreement cannot be reached with the responsible person. The primary policy objective of this determination is to ensure that the Commonwealth pays the appropriate amount for special patient contributions, reflecting changes in claimed prices by pharmaceutical companies and the incorporation of new items. This determination updates the previously established price determinations to reflect changes in claimed prices for certain pharmaceutical brands, introduces a new pharmaceutical item, and removes others from the list. By adjusting the claimed prices and updating the list of pharmaceutical items, the legislation aims to maintain fair and accurate pricing in the pharmaceutical sector, ensuring that the Commonwealth's contributions remain consistent with the market values claimed by the responsible parties. The determination also incorporates necessary administrative updates, such as renaming 'Medicare Australia CEO' to 'Chief Executive Medicare', in line with the Human Services Legislation Amendment Act 2011.

Scope and Application

The National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 6) amends the National Health (Price and Special Patient Contribution) Determination 2010 to alter the price determinations for certain pharmaceutical brands, particularly in relation to the claimed prices and the inclusion or exclusion of specific brands. This instrument applies to pharmaceutical brands listed on the Pharmaceutical Benefits Scheme (PBS), affecting both the responsible persons who manufacture these pharmaceutical items and the patients who purchase them. The amendment includes updates to the claimed prices for specific brands and introduces a new brand into the determination while omitting others. The changes come into effect on 1 September 2011. The determination is made under the authority of the National Health Act 1953, specifically section 85B, and applies nationally across Australia as it pertains to the Commonwealth's pricing and special patient contribution policies for pharmaceutical items. There are no stated exclusions or thresholds in the determination itself, though the overarching Act may contain provisions that exclude certain categories of items or entities from its application. The Act allows for further specification and extension of its application through subordinate instruments, such as this determination.

Key Provisions

The primary operative sections of the National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 6) involve amendments to the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010). This instrument, under section 85B of the National Health Act 1953, adjusts the prices of certain pharmaceutical items by modifying their claimed prices and determining new prices where no agreement between the Minister and the responsible person has been reached (section 1, 2, 3). Specifically, it updates the claimed prices for certain drugs and introduces new entries for others, while also omitting some brands from the list (Schedule 1, Item 2, 3, 4, 5, 6, 7). Furthermore, it includes a nomenclature change from 'Medicare Australia CEO' to 'Chief Executive Medicare' (Schedule 1, Item 1). The Act imposes obligations on the parties involved, particularly the Minister and the responsible persons, to engage in price negotiations to reach an agreement on the appropriate maximum price for pharmaceutical items (section 85AD). Where an agreement cannot be reached, the Minister has the authority to determine the appropriate maximum price, termed the 'Determined Price', and the claimed price by the responsible person (section 85B(2), 85B(3)). Additionally, the Act requires the Minister to determine the circumstances under which the Commonwealth will pay the special patient contribution (section 85B(5)). The determinations must be in line with the legislative provisions and must reflect accurate and updated pricing information for the listed pharmaceutical items (Schedule 1). Failure to comply with the provisions of this instrument can result in significant consequences. Although the document does not explicitly state penalties, breaches of the Act or the determinations could potentially lead to legal action under the National Health Act 1953 or other relevant legislation. Such breaches might include the imposition of fines, corrective actions, or further regulatory oversight to ensure compliance with the established price determinations and obligations. The exact penalties would depend on the nature and severity of the breach, as outlined in other sections of the National Health Act 1953 and applicable regulations.

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