EXPLANATORY STATEMENT
National Health Act 1953
National Health (Price and Special Patient Contribution)
Amendment Determination 2011 (No. 7)
PB 75 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 items 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 (ie, 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:
- omitting one pharmaceutical item as a result of the deletion of the brand of that pharmaceutical item to which a special patient contribution applies.
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 November 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 DETERMINATION 2011 (No. 7)
Section 1 Name of Instrument
This section provides that this instrument is the National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 7) and may also be cited as PB 75 of 2011.
Section 2 Commencement
This section provides that this instrument commences on 1 November 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 Determination PB 109 of 2010 as follows:
Item 1 amends Schedule 1 of the Principal Instrument to remove the entry for the listed drug ‘Dothiepin’.
Overview
The National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 7) was introduced to amend the National Health (Price and Special Patient Contribution) Determination 2010, specifically addressing the pricing and special patient contributions for certain pharmaceutical brands. Enacted under section 85B of the National Health Act 1953, this legislative instrument was created in response to instances where the Minister and the responsible person could not agree on a price for pharmaceutical items. The primary objective of this determination is to adjust the brands of pharmaceutical items that have a determined price and the amount of the claimed price for certain brands, thereby ensuring fair and agreed pricing structures are maintained within the National Health framework. This amendment ensures that the pricing mechanisms are effectively managed, facilitating appropriate payments and contributions as defined within the Act.
Scope and Application
The National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 7) amends the National Health (Price and Special Patient Contribution) Determination 2010, addressing the pricing and special patient contributions for specific pharmaceutical items. This instrument applies to brands of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) for which the Minister for Health and the responsible person, typically the manufacturer or sponsor of the pharmaceutical, are unable to reach an agreement on the appropriate price. Under the National Health Act 1953, the Minister has the authority to determine the price that is taken to be the appropriate maximum price for sales of a brand of a pharmaceutical item to approved pharmacists, known as the Determined Price, and the price claimed by the responsible person, known as the Claimed Price. The instrument specifically omits the pharmaceutical item Dothiepin due to the deletion of the brand to which a special patient contribution applies. The amendment reflects changes in the pharmaceutical landscape and ensures that the pricing mechanisms remain aligned with the legislative intent. This instrument commenced on 1 November 2011 and is subject to the provisions of the Legislative Instruments Act 2003.
Key Provisions
The main operative sections of the National Health (Price and Special Patient Contribution) Amendment Determination 2011 (No. 7) focus on the amendment of the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010) (section 3). This amendment primarily involves the removal of a pharmaceutical item, specifically the brand of the drug 'Dothiepin', from the list of items subject to a determined price and a claimed price (Schedule 1, Item 1). The purpose of this amendment is to adjust the brands of pharmaceutical items that have a determined price and the claimed price for certain brands, in line with the provisions of the National Health Act 1953 (the Act).
Under the Act, the Minister and the responsible person are required to negotiate a price for pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) (section 85AD). If an agreement cannot be reached, the Minister has the authority to determine the appropriate maximum price for sales of a brand of a pharmaceutical item to approved pharmacists, known as the 'Determined Price' (section 85B(2)). The Minister may also determine the 'Claimed Price', which is the price claimed by the responsible person (section 85B(3)). The Determined Price is used as the basis for calculating the Commonwealth price for the pharmaceutical item, while the Claimed Price is used to determine the special patient contribution (subsection 85B(4)). The special patient contribution is the difference between the Commonwealth price based on the Claimed Price and the Commonwealth price based on the Determined Price.
Responsible persons and the Minister are required to engage in price negotiations for pharmaceutical items listed on the PBS. If negotiations fail, further consultation is required before the Minister determines the final price. This process ensures that the prices set for pharmaceutical items are fair and reasonable. 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). Additionally, the Minister has the authority to determine the circumstances under which the Commonwealth, rather than the patient, will pay the special patient contribution (subsection 85B(5)).
Breach of the obligations and requirements under this Act can result in civil or criminal penalties. While specific penalties are not detailed in the Explanatory Statement, general provisions of the National Health Act 1953 outline the consequences for non-compliance. This may include fines and other legal actions. The severity of penalties would depend on the nature and extent of the breach, as well as any additional legislative provisions that may apply.