National Health (Subsection 84C(7)) Amendment Determination 2018 (No.2) (PB 57 of 2018)

Administered by Department of Health, Disability and Ageing

Legislation au F2018L00936 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

Approved by the Department of Health

National Health Act 1953

National Health (Subsection 84C(7)) Amendment Determination 2018 (No.2)

PB 57 of 2018

Authority

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.  Paragraph 84C(8)(d) of the Act provides for the addition of fees or amounts as determined by the Minister in accordance with subsection 84C(9) of the Act which requires the agreement in writing of the Pharmacy Guild of Australia.

This price is determined in the National Health (Subsection 84C(7)) Determination 2010 (the Principal Determination), as being the sum of the Commonwealth price for a pharmaceutical benefit, calculated in accordance with the determination by the Pharmaceutical Benefits Remuneration Tribunal under paragraph 98B(1)(a) of the Act, and an additional amount for paragraph 84C(8)(d).

Purpose

The purpose of this Determination is to amend the additional amount for ready prepared pharmaceutical benefits and for extemporaneously prepared pharmaceutical benefits, with effect from 1 July 2018.

Consultation

Subsection 84C(9) of the Act provides that the Minister must not determine an additional amount unless the Pharmacy Guild of Australia (the Guild) has agreed in writing.

The Guild was has agreed, in writing, to the revised values of the additional amounts for ready prepared and extemporaneously prepared pharmaceutical benefits.

The Determination commences on 1 July 2018.

Regulatory impact assessment

Indexation involving the PBS is considered to be part of the standing exemption dated 26 May 2011 (OBPR reference number 12116) therefore no Regulation Impact Statement is required.

 

Reliance on subsection 33(3) of the Acts Interpretation Act 1901

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.

 

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

 

 

Overview of the instrument

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 of the Act provides for the Safety Net arrangements for the PBS and Repatriation Pharmaceutical Benefits Scheme (RPBS).  The Safety Net reduces the cost of medicines for individuals and families who require a large number of pharmaceutical benefits.

Section 84C of the Act provides that a person is eligible to receive a Safety Net concession card or entitlement card when expenditure on pharmaceutical benefits for the person or the person and their family during an entitlement period reaches a certain amount (the Safety Net amount).  A Safety Net concession card or entitlement card enables access to PBS or RPBS medicines at a reduced rate or free of charge for the remainder of the entitlement period.  An entitlement period for the Safety Net is a calendar year from 1 January to 31 December.

Section 84C also sets out the supplies and amounts which can be taken into account for the purpose of the Safety Net.  Where the Commonwealth price for a medicine is equal to or greater than the maximum amount the patient may be charged (the patient co-payment), the amount for Safety Net purposes is the amount charged as 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 supply cannot be taken into account for Safety Net purposes unless the amount charged does 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 for all or any pharmaceutical benefits or repatriation pharmaceutical benefits (including those referred to in paragraph 84C(4)(e)) is to be ascertained for the purpose of the Safety Net.  Subsection 87C(8) provides that the manner determined under subsection (7) shall accord with the requirements set out in subsection (8).

The price of a pharmaceutical benefit for subsection 84C(7) of the Act is determined in the Principal Determination to be the sum of the Commonwealth price, calculated in accordance with a determination under paragraph 98B(1)(a) of the Act, and an additional amount determined by the Minister for paragraph 84C(8)(d) of the Act (the additional fee).  A different amount applies for ready prepared and extemporaneously prepared pharmaceutical benefits.

The Principal Determination provides that the subsection 84C(7) price for a pharmaceutical benefit must not exceed the patient co-payment amount.  This means that the additional fee can be included, in full or in part, only where the price is up to a maximum of the patient co‑payment.

A component of the Sixth Community Pharmacy Agreement (Sixth Agreement) is that the additional fee is indexed annually by Wage Cost Index 9 (WCI9) on 1 July. The fee for 2015/16 was set as part of the Sixth Agreement negotiations and indexation is applied annually from 1 July 2017.

This Determination indexes the additional fee  for ready prepared pharmaceutical benefits from $1.21 to $1.23 and for extemporaneously prepared pharmaceutical benefits from $1.57 to $1.59, with effect from 1 July 2018.

Statement of Compatibility with Human Rights

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

National Health (Subsection 84C(7)) Amendment Determination 2018 (No. 2)

PB 57 of 2018

 

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

The purpose of this legislative instrument, made under subsection 84C(7) of the National Health Act 1953 (the Act), is to give effect to the execution of the Sixth Pharmacy Community Agreement.  It amends the National Health (Subsection 84C(7)) Determination 2010 to adjust the additional amount (also known as the Safety Net Recording Fee) used in the calculation of the price of pharmaceutical benefits for safety net purposes.  The supply of pharmaceutical benefits by approved pharmacists includes recording patient payments for Safety Net purposes.  The additional amount forms part of the price that can be charged to the patient for a pharmaceutical benefit where the Commonwealth price is less than the patient co‑payment amount.  It is included in full or in part such that the patient payment is not more than the co-payment amount.

The legislative instrument increases the additional amount for ready prepared pharmaceutical benefits from $1.21 to $1.23 and for extemporaneously prepared pharmaceutical benefits from $1.57 to $1.59, with effect from 1 July 2018.

 

Human rights implications

This legislative instrument engages Article 2, 7 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR). The legislative instrument assists with the provision favourable conditions of work to ensure remuneration for workers with fair wages. In addition it also assists in 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 Pharmaceutical Benefits Scheme (PBS) is a benefit scheme which assists with providing subsidised access for people to medicines. This is a positive step towards attaining the highest standard of health for all Australians. Efficient operational arrangements for PBS support effective administration of the scheme.

Conclusion

The legislative instrument is compatible with human rights because it advances the protection of human rights.

Julianne Quaine

Assistant Secretary

Pharmacy Branch

Technology Assessment and Access Division

Department of Health

Overview

The National Health (Subsection 84C(7)) Amendment Determination 2018 (No. 2) amends the additional amount for ready prepared pharmaceutical benefits and for extemporaneously prepared pharmaceutical benefits, effective from 1 July 2018. This legislative instrument, enacted under subsection 84C(7) of the National Health Act 1953, aims to give effect to the Sixth Community Pharmacy Agreement by adjusting the additional fees used in the calculation of the price of pharmaceutical benefits for safety net purposes. This adjustment ensures that the additional fee, which forms part of the price charged to patients for pharmaceutical benefits where the Commonwealth price is less than the patient co-payment amount, is accurately indexed. The amendment from $1.21 to $1.23 for ready prepared pharmaceutical benefits and from $1.57 to $1.59 for extemporaneously prepared pharmaceutical benefits ensures that the price does not exceed the patient co-payment amount. This legislative instrument aligns with human rights by supporting the provision of favourable conditions of work and ensuring fair remuneration for workers, as well as contributing to the highest attainable standard of physical and mental health for all Australians. The determination was made by the Australian Government and is compatible with the human rights recognised in international instruments, such as the International Covenant on Economic, Social and Cultural Rights, by advancing the protection of human rights. The legislative instrument is seen as a positive step towards the progressive realisation of the right to the highest attainable standard of health, ensuring efficient operational arrangements for the Pharmaceutical Benefits Scheme (PBS) and effective administration of the scheme. The determination was agreed upon in writing by the Pharmacy Guild of Australia, as required by the Act, and has no regulatory impact assessment due to the standing exemption for indexation involving the PBS.

Scope and Application

The National Health (Subsection 84C(7)) Amendment Determination 2018 (No. 2) amends the National Health (Subsection 84C(7)) Determination 2010, affecting the price determination of pharmaceutical benefits for the purposes of the Safety Net under the National Health Act 1953. This legislative instrument applies to approved pharmacists supplying pharmaceutical benefits in Australia as part of the Pharmaceutical Benefits Scheme (PBS). The changes pertain to the additional amount, known as the Safety Net Recording Fee, which is factored into the price of pharmaceutical benefits where the Commonwealth price is less than the patient co-payment amount. This fee is adjusted annually to ensure it does not exceed the co-payment amount, which in this case, for ready prepared pharmaceutical benefits, increases from $1.21 to $1.23 and for extemporaneously prepared pharmaceutical benefits from $1.57 to $1.59, effective from 1 July 2018. This adjustment is in line with the indexation requirements set out in the Sixth Community Pharmacy Agreement. The changes are made in consultation with the Pharmacy Guild of Australia, as required by subsection 84C(9) of the Act, and do not require a Regulation Impact Statement as they pertain to the standing exemption for PBS indexation. The Determination is a legislative instrument under the Legislation Act 2003 and is compatible with human rights as it supports the provision of favourable conditions of work and the highest attainable standard of health.

Key Provisions

The National Health (Subsection 84C(7)) Amendment Determination 2018 (No. 2) amends the National Health (Subsection 84C(7)) Determination 2010. This amendment adjusts the additional fees, also known as the Safety Net Recording Fee, used in the calculation of the price of pharmaceutical benefits for safety net purposes. Specifically, the additional fee for ready prepared pharmaceutical benefits is increased from $1.21 to $1.23 and for extemporaneously prepared pharmaceutical benefits from $1.57 to $1.59, effective from 1 July 2018 (subsection 84C(7)). This adjustment ensures that the additional fee is indexed annually by the Wage Cost Index 9 (WCI9) on 1 July, as stipulated in the Sixth Community Pharmacy Agreement. Under this Amendment Determination, the obligations of parties governed by the National Health Act 1953 (the Act) include the requirement that the Minister must not determine an additional amount unless the Pharmacy Guild of Australia has agreed in writing to the revised values (subsection 84C(9)). The Guild has agreed, in writing, to the revised values of the additional amounts for both ready prepared and extemporaneously prepared pharmaceutical benefits. This agreement ensures that the amendment aligns with the provisions outlined in the Sixth Community Pharmacy Agreement and maintains a collaborative approach between the Commonwealth and the Guild. In terms of legal consequences, there are no specific offences, penalties, or civil/criminal consequences outlined in the Amendment Determination itself. However, any failure to adhere to the terms of the Agreement or the provisions of the Act could potentially result in legal action. The primary focus of the Determination is to ensure that the additional fees are adjusted appropriately and in accordance with the agreed-upon indexation process. The Determination is a legislative instrument under the Legislation Act 2003 and operates within the framework established by the National Health Act 1953 and the Sixth Community Pharmacy Agreement.

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Area of Law
Health Law
Instrument
Legislative Instrument
Concepts
Commencement Provisions
Regulatory Standards
Compliance Obligations
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Pharmaceutical Benefits Scheme

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