EXPLANATORY STATEMENT

National Health Act 1953

National Health (Price and Special Patient Contribution)

Amendment Determination 2012 (No. 2)

PB 14 of 2012

Authority

This legislative instrument, made under section 85B of the National Health Act 1953 (the Act) amends the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010) (the Principal Determination).

The Principal Determination 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.

Purpose

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.

This instrument (the Amending Determination) amends the Principal Determination by: adding five brand premiums, increasing five brand premiums, decreasing three brand premiums, and changing the determined and claimed price with no change to the brand premium for four listed brands.

The Amending Determination also removes one listed brand, which ceases to have a therapeutic group premium. That amendment commences immediately after the application on 1 April 2012 of section 99ADH of the Act (price disclosure reduction) to a listed brand with the listed drug Nifedipine.

Consultation

The Amending 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. 

A provision by provision description of the Amending Determination is contained in Attachment 1.

The Amending Determination commences on 1 April 2012, except for Schedule 2 which commences immediately after the application of section 99ADH of the Act to a listed brand. 

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

ATTACHMENT 1

PROVISION BY PROVISION DESCRIPTION OF THE NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2012 (No.2)

Section 1   Name of Instrument

This section provides that this Amending Determination is the National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 2) and may also be cited as PB 14 of 2012.

Section 2   Commencement

This section provides that the Amendment Determination commences on                    1 April 2012, except for Schedule 2 which commences immediately after the applicaton of section 99ADH of the Act to a listed brand. 

Section 3   Amendment of PB 109 of 2010

This section provides that Schedules 1 and 2 of the Amending Determination amend the determination under section 85B of the Act, the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010).

Schedule 1    Amendments commencing 1 April 2012

Schedule 1 sets out the amendments to the Principal Determination which commence on 1 April 2012 (Attachment 2).

Schedule 2    Nifedipine amendments

Schedule 2 sets out the amendments to the Principal Determination which relate to a brand of pharmaceutical item with the listed drug Nifedipine (Attachment 2).

ATTACHMENT 2

SUMMARY OF CHANGES

Brand with an increased brand premium

Brands with a new brand premium

 Brands with a price change and an increased brand premium

Brands with a price change and a decreased brand premium

Brands with a price change and no change to brand premium

Brand where a therapeutic group premium no longer exists