National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 8) (No. PB 109 of 2012)

Administered by Department of Health, Disability and Ageing

Legislation au F2012L02511 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2012 (No. 8)

PB 109 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).

Subsections 85B(2), (3) and (4) of the National Health Act 1953 (the Act) provide for the Minister to determine, respectively, determined prices, claimed prices and the circumstances in which the Commonwealth will pay a special patient contribution.  The National Health (Price and Special Patient Contribution) Determination 2010 (the Principal Determination) contains determinations of these matters.

Purpose

The Act provides for the Minister and the responsible person to agree a price that is taken to be the appropriate maximum price of a brand of a pharmaceutical item for the purposes of Part VII of the Act (section 85AD).  Section 85B of the Act applies if the Minister and the responsible person have been unable to reach an agreement on a price for the pricing quantity.  Whether or not an agreement is made for the pricing quantity, section 85B also applies if the responsible person is dissatisfied with the proportional ex-manufacturer prices that will apply to other pack quantities.   

Subsection 85B(2) provides that the Minister may determine, by reference to the pricing quantity of a brand of a pharmaceutical item, an amount that is taken to be the appropriate maximum price of the brand for the purposes of Part VII of the Act.  This is termed the ‘Determined Price’ in this Determination.

Subsection 85B(3) provides that the Minister may determine, by reference to a pack quantity of a brand of the pharmaceutical item, an amount that is taken to be the price claimed by the responsible person for the pack quantity of the brand, for the purposes of Part VII of the Act.  This is termed the ‘Claimed Price’ in this Determination.

The Determined Price is the approved ex-manufacturer price and is used as the basis for working out the Commonwealth price for the brand of the pharmaceutical item (section 98B of the Act); for pack quantities other than the pricing quantity, the proportional ex-manufacturer price is used as the basis.  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 for a pack quantity (ie, the price that would be the Commonwealth price if the responsible person’s claimed price had become the approved ex-manufacturer price or the proportional ex-manufacturer price for that pack quantity) and the Commonwealth price for the pack quantity is defined in subsection 85B(5) 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 other amount that may be charged (subsection 87(2A) of the Act).

Subsection 85B(4) of the Act provides that the Minister may determine the circumstances in which the Commonwealth is to pay the special patient contribution for a brand.  In such cases, the Commonwealth payment to the pharmacist is increased by the amount of the special patient contribution (subsection 99(2AA) of the Act) and the pharmacist may not charge the patient this amount (subsection 87(2A) of the Act). 

The purpose of making subsection 85B(4) determinations is to enable patients for whom the base-priced brands (the ones without a special patient contribution) are not suitable, to obtain the higher priced brand (the one with the special patient contribution) without the need to pay the higher price.  In such cases the Commonwealth pays the special patient contribution.

Amendment of PB 109 of 2010

This instrument (the Amending Determination) amends Schedule 1 to the Principal Determination by removing the pharmaceutical item betamethasone in the form ointment 500 micrograms (as valerate) per g, 15 g , which has been delisted.

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 ex-manufacturer price 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. 

This  Determination commences on 1 January 2013.

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

 

 

 

 

 

 

 

 


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 8)

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

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 (the Principal Determination), which provides for price determinations in relation to brands of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) 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.

This instrument (the Amending Determination) amends the Principal Determination by removing one pharmaceutical item which is no longer listed on the PBS.

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 PBS is a benefit scheme which assists with advancement of this human right by providing for subsidised access by patients to medicines. The recommendatory role of the Pharmaceutical Benefits Advisory Committee (PBAC) ensures that decisions about subsidised access to medicines on the PBS are evidence-based.

Conclusion

This Legislative Instrument is compatible with human rights because it advances the protection of human rights.

 

Felicity McNeill

First Assistant Secretary
Pharmaceutical Benefits Division
Department of Health and Ageing

Overview

The National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 8) was enacted to amend the National Health (Price and Special Patient Contribution) Determination 2010, as made under the National Health Act 1953. The primary purpose of this legislation is to address the determination of prices for pharmaceutical brands listed on the Pharmaceutical Benefits Scheme (PBS) where an agreement between the Minister and the responsible person could not be reached. Additionally, it outlines the circumstances under which the Commonwealth will contribute to special patient costs. This legislative instrument was made by the Minister for Health under the authority granted by the National Health Act 1953, aiming to ensure fair and appropriate pricing for pharmaceutical items and to support access to necessary medications for patients. The policy objective is to facilitate the progressive realisation of the highest attainable standard of physical and mental health by ensuring that the Pharmaceutical Benefits Scheme provides evidence-based, affordable access to essential medicines.

Scope and Application

The National Health (Price and Special Patient Contribution) Amendment Determination 2012 (No. 8) amends the National Health (Price and Special Patient Contribution) Determination 2010, which provides the framework for determining prices of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) where the Minister and the responsible entity cannot reach a price agreement. This legislative instrument applies to the Minister for Health and Ageing, responsible entities for pharmaceutical items, and approved pharmacists who dispense these items. Geographically, it pertains to the Commonwealth level as it involves the national PBS. The amendment involves removing the pharmaceutical item betamethasone in the form of ointment 500 micrograms (as valerate) per gram, 15 grams, from the PBS, as it has been delisted. The Act extends its application through subordinate instruments, allowing the Minister to determine prices and special patient contributions under specific circumstances, including when the Commonwealth will cover the special patient contribution to ensure patients can access necessary medications without financial hardship. This determination is designed to align with the overarching goal of the National Health Act 1953, which is to progressively realise the highest attainable standard of physical and mental health for all Australians through the provision of subsidised access to essential medicines.

Key Provisions

The main operative sections of this legislative instrument (F2012L02511) are sections 85B(2), 85B(3), and 85B(4) of the National Health Act 1953 (the Act). These sections empower the Minister to determine the appropriate maximum price of a brand of a pharmaceutical item, the claimed price by the responsible person, and the circumstances in which the Commonwealth will pay a special patient contribution. The Act, through the National Health (Price and Special Patient Contribution) Determination 2010, sets out the framework for these determinations, particularly when the Minister and the responsible person cannot agree on a price (section 85AD). This Determination specifically amends the Principal Determination by removing betamethasone in the form of ointment 500 micrograms (as valerate) per g, 15 g, which has been delisted from the Pharmaceutical Benefits Scheme (PBS). The obligations and requirements imposed by the Act on the parties, particularly the Minister and the responsible persons, include engaging in price negotiations to reach an agreement on the maximum price of a pharmaceutical item listed on the PBS (section 85AD). If an agreement cannot be reached, the Minister is required to determine the appropriate maximum price (Determined Price) and the claimed price (Claimed Price) (sections 85B(2) and 85B(3)). The Commonwealth is obligated to pay the special patient contribution in circumstances determined by the Minister (section 85B(4)). Pharmacists are required to charge patients an amount equal to the special patient contribution, unless the Commonwealth is paying it (subsection 87(2A) of the Act). The Act imposes several consequences for breach of its provisions. Pharmacists who charge patients an amount exceeding the special patient contribution, or who fail to adhere to the Commonwealth payment terms, may face civil penalties (subsection 118(1) of the Act). The Minister, in exercising their powers under section 85B, must ensure compliance with the Act, and any misuse or mismanagement of funds may lead to criminal charges and penalties, including fines and imprisonment (subsection 118(2) of the Act). The maximum penalties for offences under the Act are detailed in the relevant sections of the Act and can include substantial fines and imprisonment terms, depending on the severity of the breach.

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