EXPLANATORY STATEMENT
National Health Act 1953
National Health (Price and Special Patient Contribution)
Amendment Determination 2012 (No. 1)
PB 2 of 2012
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.
Purpose
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. PB 109 of 2010 is amended by the deletion of a brand of a pharmaceutical item to which a special patient contribution applies.
Changes to PB 109 of 2010 made by this instrument
This instrument amends PB 109 of 2010 by removing the brand Pepcidine M from the pharmaceutical item Famotidine in the form tablet 20 mg.
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.
Statement of Compatibility
This Determination 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.
General
The instrument commences on 1 March 2012.
This instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003
Overview
The National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 1) was enacted to amend the National Health Act 1953 by adjusting the determinations under the Act related to the price of pharmaceutical items and the special patient contribution. This instrument was introduced by the Parliament of Australia to address the issue of pricing disagreements between the Minister and responsible persons regarding the sale of pharmaceutical items to approved pharmacists, particularly for brands where no agreement could be reached. The primary policy objective is to ensure the availability of affordable medication under the Pharmaceutical Benefits Scheme (PBS) by providing a mechanism for the Minister to determine the maximum price when an agreement cannot be reached.
The Amendment Determination specifically removes the brand Pepcidine M from the pharmaceutical item Famotidine in the form tablet 20 mg from the list of items subject to a special patient contribution. This change aims to streamline the pricing process for certain pharmaceutical items on the PBS, potentially reducing the financial burden on patients by eliminating the need for a special patient contribution for this particular brand. The instrument is compatible with the human rights and freedoms as outlined in the international instruments listed in the Human Rights (Parliamentary Scrutiny) Act 2011. It commenced on 1 March 2012, and is considered a legislative instrument under the Legislative Instruments Act 2003.
Scope and Application
The National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 1) applies to the Minister for Health and Ageing and responsible persons in the pharmaceutical industry, specifically those involved in the sale of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). The Determination provides for the establishment of maximum prices for pharmaceutical brands where an agreement cannot be reached between the Minister and the responsible persons, as stipulated in the National Health Act 1953. The Determined Price is the maximum price approved for sales to pharmacists, forming the basis for the Commonwealth price for the brand, while the Claimed Price is the price proposed by the responsible person. The special patient contribution, which is the difference between the Commonwealth price and the responsible person's proposed price, may be charged to patients by approved pharmacists, or alternatively paid by the Commonwealth under certain conditions. The Amendment Determination removes the pharmaceutical item Famotidine in the form of a tablet 20 mg from the list of items subject to a special patient contribution. This instrument operates nationally and is subject to the legislative framework provided by the Legislative Instruments Act 2003, commencing on 1 March 2012.
Key Provisions
The National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 1) amends the National Health (Price and Special Patient Contribution) Determination 2010 (No. 1) by removing the brand Pepcidine M from the pharmaceutical item Famotidine in the form tablet 20 mg. This amendment affects the price determinations and special patient contributions related to the specified pharmaceutical item. Section 85AD of the National Health Act 1953 allows the Minister and the responsible person to agree on an appropriate maximum price for a brand of pharmaceutical item sold to approved pharmacists. If an agreement cannot be reached, section 85B(2) of the Act permits the Minister to determine the 'Determined Price', which becomes the approved price for pharmacists. The 'Claimed Price', which is the price claimed by the responsible person, is also determined under section 85B(3). The 'Determined Price' is used to calculate the Commonwealth price for the brand, and approved pharmacists are entitled to payment from the Commonwealth equal to the Commonwealth price less the applicable patient co-payment. The difference between the Commonwealth price and the responsible person’s claimed price constitutes the special patient contribution, which can be charged to the patient by the pharmacist in addition to the patient co-payment.
The Amendment Determination imposes specific obligations on the parties involved. The Minister is tasked with determining the appropriate maximum price when an agreement cannot be reached with the responsible person. This price determination process is governed by sections 85B(2) and 85B(3) of the Act. The responsible person must engage in price negotiations with the Minister and provide relevant information to facilitate the price determination process. Approved pharmacists are obligated to charge patients the applicable special patient contribution in addition to any co-payment, as outlined in subsection 85B(4) and subsection 87(2A) of the Act. These obligations ensure that the pricing and payment processes for pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS) are transparent and regulated.
The Act and the Amendment Determination also outline consequences for non-compliance. Although specific offences and penalties are not detailed in the explanatory statement, breaches of the National Health Act 1953 and its associated determinations could lead to various civil or criminal penalties. These may include fines, imprisonment, or other sanctions as prescribed by law. The exact penalties depend on the nature and severity of the breach, and may be subject to interpretation by relevant authorities. Compliance with the Act is crucial for all parties involved to avoid potential legal repercussions. The Amendment Determination ensures that the pricing mechanisms remain effective and fair for both the Commonwealth and the patients.