National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 2) (PB 19 of 2016)

Administered by Department of Health, Disability and Ageing

Legislation au F2016L00478 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. 2)

PB 19 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 eleven brands of pharmaceutical items and also increases or maintains brand or therapeutic group 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 April 2016.

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

 

 

 

 

 

 

ATTACHMENT

 

PROVISION BY PROVISION DESCRIPTION OF THE NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2016 (No. 2)

(PB 19 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. 2) and may also be cited as PB 19 of 2016.

Section 2   Commencement

This section provides that the Determination commences on 1 April 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 April 2016

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

SUMMARY OF CHANGES

SCHEDULE 1

Brands with an increased brand premium

Citalopram

Tablet 20 mg (as hydrochloride)

Cipramil

Metformin

Tablet containing metformin hydrochloride 500 mg

Diabex

Tablet (extended release) containing metformin hydrochloride 500  mg

Diabex XR

Tablet containing metformin hydrochloride 850 mg

Diabex 850

Tablet containing metformin hydrochloride 1 g

Diabex 1000

Tablet (extended release) containing metformin hydrochloride 1 g

Diabex XR 1000

Brand with a price change and no change to brand premium

Erythromycin

Capsule 250 mg (containing enteric coated pellets)

Eryc

Brands with new brand premiums

Amitriptyline

Tablet containing amitriptyline hydrochloride 10 mg

Endep 10

Tablet containing amitriptyline hydrochloride 25 mg

Endep 25

Tablet containing amitriptyline hydrochloride 50 mg

Endep 50

Captopril

Tablet 12.5 mg

Zedace

Tablet 25 mg

Zedace

Tablet 50 mg

Zedace

Codeine with Paracetamol

Tablet containing codeine phosphate
30 mg with paracetamol 500 mg

Codapane Forte

Salbutamol

Nebuliser solution 2.5 mg (as sulfate) in 2.5 mL single dose units, 30

Asmol 2.5 uni-dose

Nebuliser solution 5 mg (as sulfate) in 2.5 mL single dose units, 30

Asmol 5 uni-dose

Pressurised inhalation 100 micrograms (as sulfate) per dose, 200 doses
(CFC-free formulation)

Asmol CFC-free

Sumatriptan

Tablet (fast disintegrating) 50 mg (as succinate) (pack quantity 4)

Imigran FDT

Brand with an increased therapeutic group premium

Eprosartan

Tablet 400 mg (as mesylate)

Teveten

 


 

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. 2)
(PB 19 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 eleven brands of pharmaceutical items and also increases or maintains brand or therapeutic group 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.

 

 

 

Penny Shakespeare

First Assistant Secretary
Pharmaceutical Benefits Division
Department of Health  

Overview

The National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 2) amends the National Health (Price and Special Patient Contribution) Determination 2010, made under section 85B of the National Health Act 1953. This Act, enacted in 1953, establishes the framework for the administration of health services in Australia, including the Pharmaceutical Benefits Scheme (PBS). The 2016 amendment aims to address the gap in price determinations for certain pharmaceutical items where the Minister and the responsible person have been unable to reach an agreement. The problem it addresses is ensuring that patients have access to necessary medications at fair prices, particularly for those medications that require special patient contributions. The determination includes adjustments to brand premiums for various pharmaceutical items and increases or maintains brand or therapeutic group premiums for others, facilitating the negotiation of prices for inclusion on the PBS. The policy objective is to ensure that the PBS remains an effective mechanism for providing affordable access to essential medicines, thereby promoting public health and well-being.

Scope and Application

The National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 2) is an amendment made under section 85B of the National Health Act 1953. This Act primarily applies to the pricing and reimbursement of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS), which is administered by the Minister for Health. The Determination amends the National Health (Price and Special Patient Contribution) Determination 2010, adjusting prices and premiums for specific brands of pharmaceutical items. It operates across the Commonwealth of Australia, affecting the prices and contributions related to medications listed on the PBS. The amendment introduces new brand premiums for eleven pharmaceutical brands and adjusts existing premiums for others, thereby influencing the pricing agreements between the Minister and the responsible persons, who are typically pharmaceutical companies. The changes do not require consultation as they primarily involve price negotiations between the Minister and the responsible persons. The Determination commenced on 1 April 2016 and is subject to variation or revocation under the Acts Interpretation Act 1901 unless explicitly stated otherwise.

Key Provisions

The National Health (Price and Special Patient Contribution) Amendment Determination 2016 (No. 2) (PB 19 of 2016) amends the National Health (Price and Special Patient Contribution) Determination 2010 (PB 109 of 2010). This amendment primarily involves changes to the prices and premiums of various pharmaceutical brands listed on the Pharmaceutical Benefits Scheme (PBS). Section 85B of the National Health Act 1953 (the Act) allows the Minister to determine prices and the conditions under which the Commonwealth will pay a special patient contribution for pharmaceutical items. This determination introduces new brand premiums for eleven brands and adjusts the premiums for other brands or therapeutic groups. Entities governed by the Act, particularly those involved in the pricing and supply of pharmaceutical items on the PBS, must adhere to the updated price determinations and premiums as set out in this Amendment Determination. They are required to align their pricing strategies with the new prices and premiums for the relevant brands. Approved pharmacists must also ensure that they are aware of any changes in the special patient contribution and adjust their pricing practices accordingly, especially when the Commonwealth elects to cover the special patient contribution for certain patients. Failure to comply with the updated price determinations and premiums can lead to significant consequences. Although the determination does not explicitly detail the penalties for non-compliance, breaches of the National Health Act 1953 or related regulations could result in civil or criminal penalties. For civil penalties, the Act provides for substantial fines, up to the maximum limits specified under the relevant provisions of the Act. Criminal penalties may include imprisonment, reflecting the seriousness of non-compliance with health legislation designed to ensure equitable and accessible healthcare services. The determination also outlines that the Commonwealth may pay the special patient contribution under certain circumstances, ensuring that patients who require higher-priced brands can access them without bearing the full cost. This is particularly important for patients who find the base-priced brands unsuitable for their needs. The determination ensures that these patients can still receive the necessary medication with financial assistance from the Commonwealth. This mechanism aims to balance the need for cost-effective healthcare with the necessity of providing appropriate treatments to all patients.

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