National Health (Price and Special Patient Contribution) Amendment Determination 2019 (No. 2) (PB 16 of 2019)

Administered by Department of Health, Disability and Ageing

Legislation au F2019L00207 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2019 (No. 2)

PB 16 of 2019

 

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 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 a new brand premium to a smaller pack size of an existing brand.

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 March 2019.

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 2019 (No. 2)

(PB 16 of 2019)

Section 1   Name of Determination

This section provides that the Determination is the National Health (Price and Special Patient Contribution) Amendment Determination 2019 (No. 2) and may also be cited as PB 16 of 2019.

Section 2   Commencement

This section provides that the Determination commences on 1 March 2019.

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 March 2019

Schedule 1 sets out the amendments to the Principal Determination which commence on 1 March 2019.


SUMMARY OF CHANGES

SCHEDULE 1

Brand with a new brand premium

Hypromellose

Eye drops 3 mg per mL, 10 mL

Genteal

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 2019 (No. 2) (PB 16 of 2019)

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 a new brand premium to a smaller pack size of an existing brand.

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.

 

 

 

 

Thea Daniel

 Assistant Secretary

 Pricing and PBS Policy Branch
Technology Assessment and Access Division
Department of Health  

Overview

The National Health (Price and Special Patient Contribution) Amendment Determination 2019 (No. 2) was enacted to amend the National Health (Price and Special Patient Contribution) Determination 2010. This legislative instrument, made under section 85B of the National Health Act 1953, addresses the issue of determining prices for brands of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) where an agreement between the Minister and the responsible person has not been reached. It also outlines the circumstances under which the Commonwealth will pay the special patient contribution arising from these price determinations. The policy objective of this determination is to ensure that patients who require higher priced brands of medications receive them without having to bear the full cost, thereby advancing the right to the highest attainable standard of physical and mental health as recognised in the International Covenant on Economic, Social and Cultural Rights.

Scope and Application

The National Health (Price and Special Patient Contribution) Amendment Determination 2019 (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 primarily pertains to the Minister's authority to determine prices and the circumstances under which the Commonwealth will pay a special patient contribution for pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) when an agreement cannot be reached between the Minister and the responsible person. The amendment introduces a new brand premium for a smaller pack size of an existing brand, specifically for Hypromellose Eye drops 3 mg per mL, 10 mL, Genteal. This determination applies to entities involved in the pricing and supply of pharmaceutical items under the PBS, including manufacturers and suppliers of pharmaceutical products. The geographic scope of this Act is national, as it pertains to the Commonwealth's role in determining prices and contributions across Australia. The Act does not explicitly state exclusions or thresholds but operates within the framework provided by the National Health Act 1953. The application of the Act may be further extended or restricted through subordinate instruments, although this is not detailed in the explanatory statement.

Key Provisions

The National Health (Price and Special Patient Contribution) Amendment Determination 2019 (No. 2) amends the National Health (Price and Special Patient Contribution) Determination 2010. The primary sections affected include sections 2 and 3, which detail the commencement of the amendment and the specific changes to the Principal Determination (sections 85B(2), (3) and (4) of the National Health Act 1953). The amendments add a new brand premium to a smaller pack size of an existing brand, specifically Hypromellose Eye drops 3 mg per mL, 10 mL, Genteal. This amendment is intended to adjust the pricing structure for certain pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). The obligations imposed by this Act require the Minister for Health to determine the appropriate maximum price of a pharmaceutical item if an agreement cannot be reached with the responsible person. This involves determining the Determined Price and the Claimed Price for specific pack quantities of a brand. The Commonwealth price for the pharmaceutical brand is then calculated based on the Determined Price and is used for determining payments to approved pharmacists. Additionally, the Act allows the Minister to determine circumstances under which the Commonwealth will pay a special patient contribution, ensuring that patients have access to necessary medications without undue financial burden. Failure to comply with the provisions of this Act may result in civil or criminal penalties, depending on the nature of the breach. The maximum penalties for such breaches are not explicitly stated in the text, but they would typically be in line with other provisions of the National Health Act 1953, which may include fines and, in severe cases, imprisonment. The specific penalties would be determined based on the severity and intent of the breach. The Act also allows for revocation or variation of the Principal Determination, ensuring that the pricing and contribution mechanisms remain current and effective. The Act is designed to facilitate the progressive realisation of the right to the highest attainable standard of physical and mental health by ensuring that patients have access to affordable medications through the PBS. This is achieved through the determination of appropriate prices and the provision of special patient contributions where necessary. The role of the Pharmaceutical Benefits Advisory Committee (PBAC) ensures that decisions about which medicines are subsidised are evidence-based, further protecting the human rights of patients.

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