National Health (Subsection 84C(7)) Amendment Determination 2012 (No. 1) (No. PB 57 of 2012)

Administered by Department of Health, Disability and Ageing

Legislation au F2012L01544 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

National Health (subsection 84C(7)) AMENDMENT

Determination 2012 (No.1)

Summary

Subsection 84C(7) of the National Health Act 1953 (the Act) provides that the Minister may determine the manner in which the price for all or any pharmaceutical benefits and repatriation pharmaceutical benefits is to be ascertained for the purpose of the Safety Net.

This price is determined as being the sum of the Commonwealth price for a pharmaceutical benefit, calculated in accordance with the Commonwealth price (Pharmaceutical benefits supplied by approved pharmacists) Determination 2010 of the Act, and an additional fee as determined by the Minister in accordance with paragraph 84C(8)(d) of the Act.

 

Purpose

The purpose of this amendment (the Amending Determination) is to amend the National Health (Subsection 84C(7)) Determination 2010 (the Principal Determination) made on 20 July 2010, to reflect the annual adjustment to the additional fee (also known as the Safety Net Recording Fee). 

 

Background

Part VII of the Act is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.

Division 1A of Part VII the Act provides for the Safety Net scheme in relation to pharmaceutical benefits.  The Safety Net scheme is designed to provide financial protection for those patients and their families who require a large number of PBS and Repatriation Pharmaceutical Benefits Scheme (RPBS) medicines.

At the patient’s request, a pharmacist records the supply of PBS and RPBS medicines to that person and the cost of the supply.  When a patient reaches a certain spending level on PBS or RPBS medicines (“the Safety Net threshold”), the patient qualifies for a Safety Net Concession or Entitlement Card and will receive PBS or RPBS medicines at a reduced rate or free of charge for the remainder of that entitlement period.  An entitlement period for the Safety Net scheme is a calendar year from 1 January to 31 December.

Section 84C of the Act provides for eligibility to receive a Safety Net Concession or Entitlement Card, when a patient and their family’s expenditure on pharmaceutical benefits during the relevant eligibility period reach the Safety Net threshold. 

Section 84C also sets out the amounts in respect of the supply of pharmaceutical benefits which can be taken into account for the purpose of the Safety Net, where the Commonwealth price for that medicine is equal to or greater than the maximum amount a patient may be charged (“the patient co-payment”).

Where the Commonwealth price for a pharmaceutical benefit is less than the patient co-payment, subsection 84C(4)(e) of the Act provides that the amount to be taken into account for the purpose of the Safety Net will not exceed the sum of the subsection 84C(7) price for the pharmaceutical benefit or repatriation pharmaceutical benefit and any charges (where applicable) for supplying the pharmaceutical benefit outside of normal trading hours and/or by delivery to premises other than the approved pharmacy.

Subsection 84C(7) of the Act provides that the Minister may determine the manner in which the price (as referred to in subsection 84C(4)(e)) for all or any pharmaceutical benefit or repatriation pharmaceutical benefit is to be ascertained for the purpose of the Safety Net.

The subsection 84C(7) price is determined as being the sum of the Commonwealth price for a pharmaceutical benefit, calculated in accordance with a determination made under paragraph 98B(1)(a) of the Act, and an additional fee as determined by the Minister in accordance with paragraph 84C(8)(d) of the Act. 

The determination provides that the 84C(7) price for a pharmaceutical benefit will not exceed the patient co-payment.  In some instances, a pharmacist may not be able to charge the full amount of the additional fee since the amount charged would then exceed the patient co-payment.

On 3 May 2010, the Minister for Health and Ageing and the Pharmacy Guild of Australia signed the Fifth Community Pharmacy Agreement (Fifth Agreement).  Clause 12 of the Fifth Agreement specifies that the additional fee, intended as a payment to the approved pharmacist for recording the supply of a pharmaceutical benefit where its Commonwealth price is less than the patient co-payment, will be retained under the Fifth Agreement.

The additional fee for ready prepared and extemporaneous prepared pharmaceutical benefits is indexed annually.  The additional fee for extemporaneously-prepared benefits is based on the additional fee for ready prepared benefits, and obtained by multiplying the additional fee for ready-prepared benefits by the ratio of the extemporaneously-prepared and ready-prepared dispensing fees.  

On 25 July 2011, the National Health (Subsection 84C(7)) Amendment Determination 2011 (No. 1) (No. PB 56 of 2011) amended the Principal Determination to reflect the annual adjustment to the additional fee for ready-prepared pharmaceutical benefits as of 1 August 2011 from $1.07 to $1.09 and for extemporaneously-prepared pharmaceutical benefits (including an admixed ready-prepared pharmaceutical benefit) from $1.41 to $1.44. 

This Amending Determination revises the additional fee for ready-prepared pharmaceutical benefits as of 1 August 2012 from $1.09 to $1.11 and for extemporaneously-prepared pharmaceutical benefits (including an admixed ready-prepared pharmaceutical benefit) from $1.44 to $1.45.

 

Consultation

Subsection 84C(9) of the Act provides that the Minister may not determine an additional fee without the Pharmacy Guild of Australia’s agreement in writing.

The Pharmacy Guild of Australia was consulted on this matter and agreed, in writing, to the revised values of the additional fees for ready-prepared and extemporaneously-prepared pharmaceutical benefits. 

The Amending Determination commences on 1 August 2012.

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


 

 

 

 

Overview

The National Health Act 1953, as amended by the National Health (Subsection 84C(7)) Amendment Determination 2012 (No. 1), serves to address the need for an annual adjustment to the additional fee for recording the supply of pharmaceutical benefits under the Safety Net scheme. This scheme is designed to provide financial protection for patients and their families who require a large number of medicines covered by the Pharmaceutical Benefits Scheme (PBS) or the Repatriation Pharmaceutical Benefits Scheme (RPBS). The amendment reflects the annual indexation of the additional fee, which is a payment to pharmacists for recording the supply of medicines where the Commonwealth price is less than the patient co-payment. The revised fees, agreed upon by the Pharmacy Guild of Australia, adjust the additional fee for ready-prepared pharmaceutical benefits from $1.09 to $1.11 and for extemporaneously-prepared pharmaceutical benefits from $1.44 to $1.45, effective from 1 August 2012. This adjustment is made in accordance with the Fifth Community Pharmacy Agreement, ensuring the continued functionality and relevance of the Safety Net scheme.

Scope and Application

The National Health (Subsection 84C(7)) Amendment Determination 2012 (No.1) amends the National Health (Subsection 84C(7)) Determination 2010, which is part of the legislative framework underpinning the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS). This legislation applies to pharmacists and patients involved in the supply and receipt of PBS and RPBS medicines, with a particular focus on the Safety Net scheme that provides financial relief for patients who require a large number of these medicines. The amendment adjusts the additional fee, also known as the Safety Net Recording Fee, which pharmacists are permitted to charge for recording the supply of PBS and RPBS medicines where the Commonwealth price is less than the patient co-payment. The fee adjustment reflects the annual indexation of the additional fee for both ready-prepared and extemporaneously-prepared pharmaceutical benefits. The amendment applies nationally across Australia, as it is an instrument under the National Health Act 1953, which is Commonwealth legislation. The amendment does not introduce any new exclusions or exemptions but updates the existing fee structure to ensure it remains current with inflation and other cost factors.

Key Provisions

The main operative sections of the National Health (Subsection 84C(7)) Amendment Determination 2012 (No.1) involve the adjustment of the additional fee for pharmaceutical benefits as part of the Safety Net scheme under the National Health Act 1953. This fee, referred to as the Safety Net Recording Fee, is added to the Commonwealth price to determine the total price for pharmaceutical benefits for Safety Net purposes, as stipulated in subsection 84C(7) of the Act. The amendment reflects the annual adjustment to this fee, bringing the price for ready-prepared pharmaceutical benefits from $1.09 to $1.11, and for extemporaneously-prepared pharmaceutical benefits from $1.44 to $1.45, effective from 1 August 2012. The Act imposes several obligations and requirements on parties involved in the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS). Pharmacists are required to record the supply of PBS and RPBS medicines to patients and the associated costs. When a patient's expenditure on these medicines reaches a specified threshold, known as the Safety Net threshold, they become eligible for a Safety Net Concession or Entitlement Card, which provides them with reduced rates or free access to these medicines for the remainder of the calendar year. The Minister for Health, in consultation with the Pharmacy Guild of Australia, is responsible for determining the manner in which the price for pharmaceutical benefits is ascertained for Safety Net purposes. This includes setting the additional fee that is applied to the Commonwealth price for pharmaceutical benefits where the Commonwealth price is less than the patient co-payment. The Act stipulates that the Minister may not determine the additional fee without the written agreement of the Pharmacy Guild of Australia, as required by subsection 84C(9) of the Act. Any breaches of this requirement or failure to comply with the determined prices for pharmaceutical benefits could potentially lead to civil or administrative penalties. While the specific penalties are not detailed in the explanatory statement, breaches of similar provisions under the National Health Act 1953 may incur fines or other penalties as prescribed by the relevant legislation. The precise penalties would depend on the nature and severity of the breach, as well as any other applicable laws.

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