National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 1) (PB 2 of 2016)

Administered by Department of Health, Disability and Ageing

Legislation au F2016L00073 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2016 (No. 1)

PB 2 of 2016

 

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.

Variation and revocation

Unless there is an express power to revoke or vary PB 109 of 2010 cited in this Instrument and explanatory statement, subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to revoke or vary PB 109 of 2010.

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.

This instrument (the Amending Determination) amends the Principal Determination by: adding new brand premiums to nine brands of pharmaceutical items in addition to increasing brand premiums to other 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.  Consultation was considered unnecessary (or inappropriate) because this instrument essentially involves a price negotiation between the Minister (or delegate) and the responsible persons.

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

This Determination commences on 1 February 2016.

This Determination 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 2016 (No. 1)

(PB 2 of 2016)

Section 1   Name of Determination

This section provides that the Determination is the National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 1) and may also be cited as PB 2 of 2016.

Section 2   Commencement

This section provides that the Determination commences on 1 February 2016.

Section 3   Amendment of the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010).

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

Schedule 1    Amendments commencing 1 February 2016

Schedule 1 sets out the amendments to the Principal Determination which commence on 1 February 2016.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY OF CHANGES

SCHEDULE 1

Brands with an increased brand premium

Cephalexin

Capsule 250 mg (anhydrous)

Keflex

 

Capsule 500 mg (anhydrous)

Keflex

 

Granules for oral suspension 125 mg per 5 mL, 100 mL

Keflex

 

Granules for oral suspension 250 mg per 5 mL, 100 mL

Keflex

Ipratropium

Nebuliser solution containing ipratropium bromide 250 micrograms (anhydrous) in 1 mL single dose units, 30

Atrovent

 

 

Nebuliser solution containing ipratropium bromide 500 micrograms (anhydrous) in 1 mL single dose units, 30

Atrovent Adult

Lansoprazole

Tablet 15 mg (orally disintegrating)

Zoton FasTabs

 

Tablet 30 mg (orally disintegrating)

Zoton Fas Tabs

Sertraline

Tablet 50 mg (as hydrochloride)

Zoloft

 

Tablet 100 mg (as hydrochloride)

Zoloft

Sumatriptan

Tablet 50 mg (as succinate) (pricing quantity 2)

Imigran

 

Tablet (fast disintegrating) 50 mg (as succinate)

Imigran FDT

 

Brands with a new brand premium

Telmisartan

Tablet 40 mg

Micardis

 

Tablet 80 mg

Micardis

Telmisartan with amlodipine

Tablet 40 mg-5 mg (as besylate)

Twynsta

 

Tablet 40 mg-10 mg (as besylate)

Twynsta

 

Tablet 80 mg-5 mg (as besylate)

Twynsta

 

Tablet 80 mg-10 mg (as besylate)

Twynsta

Telmisartan with hydrochlorothiazide

Tablet 40 mg-12.5 mg

Micardis Plus 40/12.5 mg

 

Tablet 80 mg-12.5 mg

Micardis Plus 80/12.5 mg

 

Tablet 80 mg-25 mg

Micardis Plus 80/25 mg

 


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 2016 (No. 1) (PB 2 of 2016)

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: adding new brand premiums to nine brands of pharmaceutical items in addition to increasing brand premiums to other brands of pharmaceutical items.

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.

 

 

 

Julianne Quaine
First Assistant Secretary (Acting)
Pharmaceutical Benefits Division
Department of Health  

Overview

The National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 1) is a legislative instrument made under section 85B of the National Health Act 1953, which amends the National Health (Price and Special Patient Contribution) Determination 2010. This amendment addresses the issue of determining the appropriate prices for pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) when the Minister and the responsible person cannot reach a price agreement. The objective of this amendment is to ensure that patients who require specific brands of pharmaceutical items receive the necessary medication without incurring excessively high costs. By amending the Principal Determination to include new and increased brand premiums for certain pharmaceutical items, the Commonwealth aims to balance the need for affordable medication with the costs incurred by responsible persons. The National Health Act 1953, enacted by the Australian Parliament, provides the framework for regulating the health sector, including the pricing and subsidy of pharmaceutical items. The problem this amendment addresses is the need for a regulatory mechanism to determine prices when negotiations between the Minister and responsible persons fail, ensuring that patients have access to necessary medications at affordable prices. The policy objective of this amendment is to enable the Minister to determine the appropriate maximum prices for pharmaceutical brands, the claimed prices for pack quantities, and the circumstances under which the Commonwealth will pay the special patient contribution. This ensures that patients can access necessary medications without facing prohibitive costs, thereby supporting the broader goal of ensuring access to affordable healthcare.

Scope and Application

The National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 1) amends the National Health (Price and Special Patient Contribution) Determination 2010. This instrument is made under section 85B of the National Health Act 1953 and applies to the pricing of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) where an agreement on the price between the Minister and the responsible person has not been reached. The Act applies to the responsible persons, who are usually the manufacturers or importers of pharmaceutical items, and the approved pharmacists who dispense these items. The geographic scope of the Act is national, affecting the entire Commonwealth of Australia. The instrument adjusts brand premiums for specific pharmaceutical brands, increasing or introducing premiums for certain medications. This determination is intended to influence the pricing of pharmaceuticals on the PBS and ensure appropriate access for patients. It commences on 1 February 2016, and the amendments outlined in Schedule 1 are effective from the same date. The instrument ensures compatibility with human rights by supporting access to affordable medications, thereby promoting the right to the highest attainable standard of health.

Key Provisions

The main operative sections of the National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 1) (PB 2 of 2016) amend the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010) by adding new brand premiums to nine brands of pharmaceutical items and increasing brand premiums to other brands of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). These amendments are outlined in Schedule 1 of the Amending Determination and include specific brands such as Cephalexin, Ipratropium, Lansoprazole, Sertraline, Sumatriptan, Telmisartan, and Telmisartan with amlodipine or hydrochlorothiazide (sections 3 and Schedule 1). The purpose of these amendments is to adjust the prices of certain pharmaceutical items, which will affect the pricing structure and contribution levels set forth in the Principal Determination. The obligations imposed by the Amending Determination on the parties and entities it governs include ensuring compliance with the new prices and brand premiums specified in Schedule 1. Responsible persons, who are manufacturers or suppliers of pharmaceutical items listed on the PBS, must adhere to these new pricing structures. The Commonwealth, through the Minister for Health, is responsible for determining the appropriate maximum prices for pharmaceutical brands and the circumstances under which the Commonwealth will pay the special patient contribution. Approved pharmacists are also affected as they are entitled to payment from the Commonwealth for dispensing these pharmaceutical items, with adjustments based on the new prices and brand premiums. There are no specific offences, penalties, or civil/criminal consequences outlined in the Amending Determination itself. However, the National Health Act 1953 provides for enforcement mechanisms and penalties for non-compliance with the Act and its subsidiary legislation. Non-compliance with the provisions of the Act or the determinations made under it could potentially lead to civil or administrative penalties, depending on the nature and severity of the breach. The maximum penalties for offences under the Act are set out in the Act itself and could include fines up to a certain amount, depending on the specific offence committed.

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