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2008
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL HEALTH AMENDMENT
(PHARMACEUTICAL BENEFITS SCHEME) BILL 2008
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Ageing,
the Honourable Nicola Roxon MP)
NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS
SCHEME) BILL 2008
OUTLINE
The National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2008 (the
Bill) amends Part VII of the National Health Act 1953 (the Act) in relation to certain
aspects of the Pharmaceutical Benefits Scheme (PBS) as follows:
· Schedule 1 amends the Act to expand the criteria for determining that brands of
pharmaceutical items are co-marketed and provides that the Minister may
determine that co-marketed brands cease to be co-marketed;
· Schedule 2 amends the Act to provide for people who are otherwise eligible for
pharmaceutical benefits to access those benefits while working outside Australia
as officers of the Commonwealth, or of a State or Territory (and for their
accompanying spouses and dependent children);
· Schedule 3 amends the Act to allow the same PBS safety net arrangements to
apply for legally married and de facto couples living apart due to illness or
infirmity as applies for legally married and de facto couples living together;
· Schedule 4 amends the Act:
o to make minor changes to two PBS-related definitions; and
o to remove provisions for the gazettal of determinations made in relation to
pharmaceutical benefits that may be prescribed by participating dental
practitioners and authorised optometrists.
Schedule 1 - Amendments relating to co-marketed brands
Schedule 1 of the Bill proposes amendments to the Act to expand the criteria for
determining that brands of pharmaceutical items are co-marketed.
Amendments to the Act in 2007 introduced the concept of co-marketed brands.
However, the criteria for determining co-marketed brands requires amendment so that
it operates as intended. The amendments proposed in Schedule 1 expand the relevant
criteria by providing that co-marketed brands can, in certain circumstances, be
co-marketed brands of more than one pharmaceutical item.
In addition, the amendments provide that the Minister may determine, by legislative
instrument, that co-marketed brands cease to be co-marketed. This is an important
amendment as it allows the Minister to make a determination that a co-marketed
brand as prescribed in the National Health (Pharmaceutical Benefits) Regulations
1960 ceases to be co-marketed and that determination takes precedence over the
Regulations.
Schedule 2 - Supply of pharmaceutical benefits to government officers working
outside Australia
Schedule 2 of the Bill proposes amendments to the Act which will allow people who
are otherwise eligible for pharmaceutical benefits to access those benefits under the
PBS while they are working outside Australia as officers of the Commonwealth, or of
a State or Territory (and also covers their accompanying spouse and dependent
children).
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Part VII of the Act regulates the supply of pharmaceutical benefits, including eligibility
for access to the PBS. Only people who reside in Australia are eligible to receive
pharmaceutical benefits. Arrangements for export of pharmaceutical benefits prescribed
under Part VII of the Act are limited.
The proposed amendments provide that while a person is working outside Australia as a
Commonwealth officer or a State or Territory officer, that person and a spouse and any
dependent children accompanying them outside Australia are taken to reside in Australia.
The amendments also provide that an approved supplier of pharmaceutical benefits can
supply pharmaceutical benefits in respect of these persons when they are outside
Australia. Export restrictions in relation to certain prescription drugs are also amended
to permit access to pharmaceutical benefits under the PBS for these people when they are
outside Australia.
The amendments introduce definitions for Commonwealth officer and State or Territory
officer for the purposes of determining the persons who may be eligible to receive
pharmaceutical benefits when working outside Australia in that capacity.
The proposed changes will confirm that the supply of pharmaceutical benefits under the
repatriation pharmaceutical benefit schemes is permitted for persons, who are otherwise
eligible to receive these benefits, when working outside Australia as Commonwealth,
State or Territory officers.
Schedule 2 commences on the day after the Bill receives the Royal Assent.
Schedule 3 - Amendments relating to couples living apart
Schedule 3 of the Bill proposes amendments to the Act which will allow legally
married or de facto couples living apart permanently due to illness or infirmity to use
the PBS safety net jointly.
The PBS operates under Part VII of the Act which regulates the prescribing and
supply of pharmaceutical benefits, the persons eligible to receive those benefits, the
amounts to be charged and the arrangements for safety net entitlements. The PBS
safety net provides that families can combine certain PBS charges toward a joint
safety net tally and, after the threshold is reached, all members of the family benefit
from reduced PBS charges for the balance of that calendar year. The Act defines who
is a member of a person's family for the purposes of determining the persons in
respect of whom patient contributions for PBS medicines may be tallied toward the
same safety net threshold, and the persons who may be included on the same safety
net concession or entitlement card.
Schedule 3 amends Part VII of the Act to extend the definition of family for PBS safety
net purposes by amending the definition of spouse. Under the amendment, members of a
legally married or de facto couple living apart permanently due to illness or infirmity (of
either or both persons) are not taken to be living separately on a permanent basis. This
will result in the members of such couples being members of the same family for safety
net purposes, and being entitled to safety net benefits in the same manner as if they were
living together.
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The amendments also apply in relation to entitlements for safety net cards, and charges
made for, repatriation pharmaceutical benefits.
Schedule 3 commences on the day on which this Bill receives the Royal Assent.
Item 3 provides that the amendments made by this Schedule apply in relation to the
safety net entitlement periods beginning on or after 1 January 2009. The safety net
operates on a calendar year basis.
Schedule 4 - Miscellaneous
Schedule 4 of the Bill proposes minor technical amendments to the Act to change the
definitions of combination item has a drug and pharmaceutical item has a drug.
These amendments were required because of the way the terms are referred to in the
amendments set out in Schedule 1.
Schedule 4 of the Bill also proposes amendments to the Act which remove wording
relating to gazettal of determinations which specify pharmaceutical benefits that may
be prescribed by participating dental practitioners and authorised optometrists. The
amendments provide that these determinations are legislative instruments.
As the legislative instruments made under sections 88(1A) and 88(1C) will be
published on the Federal Register of Legislative Instruments publication in the
Gazette constitutes a redundant administrative step.
The provisions in Schedule 4 apply to determinations made on or after the day on
which the Bill receives the Royal Assent.
FINANCIAL IMPACT STATEMENT
Schedule 1 - Amendments relating to co-marketed brands
Schedule 1 of the Bill has no financial impact.
Schedule 2 - Supply of pharmaceutical benefits to government officers working outside
Australia
The annual cost of Schedule 2 is expected to be around $0.3 million.
Schedule 3 - Amendments relating to couples living apart
The estimated annual cost is approximately $1.1 million. This includes the cost of
issuing additional safety net concession and entitlement cards and the cost to the PBS
and the Repatriation Pharmaceutical Benefits Scheme of subsidies for additional
prescriptions supplied as concession card and entitlement card prescriptions (i.e. at the
safety net patient co-payment rate).
Schedule 4 - Miscellaneous
Schedule 4 of the Bill has no financial impact.
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NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS
SCHEME) BILL 2008
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill, once enacted, may be cited as the National Health
Amendment (Pharmaceutical Benefits Scheme) Act 2008.
Clause 2 - Commencement
Clause 2 provides that sections 1 to 3 commence on the date of Royal Assent.
Schedule 1 (co-marketed brands), Schedule 3 (couples living apart) and Schedule 4
(miscellaneous) commence on the day on which the Bill receives the Royal Assent.
Schedule 2 (supply of pharmaceutical benefits to government officers working outside
Australia) commences on the day after the Bill receives the Royal Assent.
Clause 3 - Schedules
Clause 3 provides that each Act specified in a Schedule to this Bill is amended or
repealed as set out in the applicable items in the relevant Schedule. Any other item in
a Schedule has effect according to its terms. The Bill contains four Schedules which
amend the National Health Act 1953.
SCHEDULE 1 - CO-MARKETED BRANDS
Part 1 - Amendments to the National Health Act 1953
Item 1
Item one amends the meaning of co-marketed brands by providing in paragraph
84AE(2)(b) that brands prescribed in the regulations to be co-marketed brands of the
pharmaceutical item can cease to be co-marketed brands by Ministerial determination.
This means that a legislative instrument made by the Minister under new subsection
84AE(3B) to cease co-marketing for brands of a pharmaceutical item takes
precedence over the regulations that prescribe brands as co-marketed brands of the
pharmaceutical item.
Items 2 and 3
These items amend subsection 84AE(3) by substituting paragraph 84AE(3)(c) with
three more specific criteria. The amendments provide that co-marketed brands can be
co-marketed brands of more than one pharmaceutical item so long as every
pharmaceutical item that has the same drug as the co-marketed brands of the
co-marketed item has all and only the same brands as the co-marketed brands of the
co-marketed item. All the co-marketed brands must be listed brands of the
co-marketed item. For example if brand Alpha and brand Beta are co-marketed brands
of co-marketed item 1 containing drug X, then, if they meet all other criteria, new
brand Alpha and new brand Beta can be co-marketed brands of new co-marketed item
2 containing drug X. However, if the new brand Alpha of new pharmaceutical item 2
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containing drug X is listed alone, it cannot be a co-marketed brand of the new
pharmaceutical item.
Item 4
Item 4 repeals the Note to subsection 84AE(3). It is no longer required because of the
way that the amendments to subsection 84AE(3) have been drafted.
Item 5
Item 5 inserts into the Act, after subsection 84AE(3), new subsections (3A) and (3B).
Subsection 84AE(3B) is included so that the Minister can make a determination that
prescribed co-marketed brands cease to be co-marketed brands of a pharmaceutical
item. It is necessary for the determination made under subsection 84AE(3B) to have
precedence over the regulations. The prescribed co-marketed brands were
grandfathered into the regulations at the time the co-marketing provisions commenced
on 1 August 2007 because of the difficulty in applying the subsection 84AE(3) criteria
retrospectively. However, when a new brand of pharmaceutical item lists on the PBS
that causes the co-marketed brands of the co-marketed item to meet the subsection
84AE(3B) criteria for ceasing to be a co-marketed brand, it is intended that the
co-marketed brands no longer be treated as single brands of the pharmaceutical item.
If it were necessary to amend the regulations to achieve this, the timelines for
achieving that amendment would impact on the efficient operation of the PBS. Later
amendment of the regulations can also be undertaken.
Subsection 84AE(3A) is included to ensure that the Minister continues, after inclusion
of subsection 84AE(3B), to have the power to vary or revoke a co-marketing
determination made under subsection 84AE(3). These provisions are not intended to
indicate that the Minister has or does not have the power to revoke or vary any other
determination.
The criteria for when the Minister may determine that co-marketed brands cease to be
co-marketed reflect that the co-marketed brands no longer meet the criteria at
s84AE(3)(c) to (e) for determination as a co-marketed brand. One case where
co-marketing might cease would be if brands of a new pharmaceutical item that
contains the same drug as a co-marketed item were listed but the names used for the
new brands of the new pharmaceutical item were not the same as the co-marketed
brands of the co-marketed item. For example, if brand Alpha and brand Beta are
co-marketed brands of co-marketed item 1 containing drug X, and new brand Gamma
and new brand Delta of new pharmaceutical item 2 containing drug X are listed, those
two new brands could not be co-marketed brands. Further, brand Alpha and brand
Beta of pharmaceutical item 1 would no longer meet the criteria for co-marketed
brands. The Minister could make a determination that brand Alpha and brand Beta
cease to be co-marketed brands of co-marketed item 1. Whether this was done under
subsection 84AE(3A) or 84AE(3B) would depend on whether the co-marketed brands
were determined by the Minister under subsection 84AE(3) or prescribed in the
regulations.
Part 2 - Application of amendments
Item 6: Application of amendments
Item 6 makes clear that the amendments made by Items 1-5 will apply prospectively.
That is, the amended arrangements will only apply to determinations under
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subsections 84AE(3), (3A) or (3B) made by the Minister on or after the day the Bill
receives Royal Assent and made in relation to brands that are, at that time, listed
brands, or co-marketed brands, of a pharmaceutical item.
SCHEDULE 2 - SUPPLY OF PHARMACEUTICAL BENEFITS TO
GOVERNMENT OFFICERS WORKING OUTSIDE AUSTRALIA
Amendments to the National Health Act 1953
Items 1 and 2
These items amend subsection 84(1) of the Act to add definitions of Commonwealth
officer and State or Territory officer. The amendments in this Schedule provide
access to pharmaceutical benefits for persons, who are otherwise eligible for those
benefits, when they are working overseas in the capacity defined in these items. The
amendments also cover accompanying spouse and dependent children.
Items 3 and 4
These items insert four new subsections for section 86 of the Act. Subsections 86(2),
(3) and (4) provide that while people are working overseas in their capacity as defined
Commonwealth, State or Territory officers, they and their accompanying spouse and
dependent children meet the Australian residency requirements for eligibility for
pharmaceutical benefits.
New subsection 86(5) inserts definitions for dependent child and spouse for the
purposes of s86. It provides that each term has the same meaning as in section 84B of
the Act. Schedule 3 of this Bill includes amendments to the definition of spouse at
s84B of the Act.
Eligibility for receipt of pharmaceutical benefits refers, in part, to certain definitions
in the Health Insurance Act 1973. Item 4 inserts a Note to indicate that paragraph
86(1)(a) of the Act refers to a person being an eligible person within the meaning of
the Health Insurance Act 1973. Further, it explains that under that Act an Australian
resident is an eligible person, and that a person must reside in Australia to be an
Australian resident. This Note is included for explanatory purposes.
Items 5 and 6
Under the new subsection 86A(2), despite the general prohibition in subsection
86A(1) against supply of pharmaceutical benefits for persons who are not in Australia,
an approved supplier may supply pharmaceutical benefits for an eligible person who
is working outside Australia as a Commonwealth officer, or a State or Territory
officer, or a person who is a spouse or dependent child accompanying such an officer
outside Australia.
New subsection 86A(3) inserts definitions for dependent child and spouse for the
purposes of section 86A. It provides that each term has the same meaning as in
section 84B of the Act. The definition of spouse at s84B of the Act is amended by
Schedule 3 of this Bill.
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Item 7
Item 7 amends paragraph 99ZI(1)(c) to provide that drug like substances that are
prescription drugs may, in addition to the current circumstances, be carried outside
Australia if the prescription drugs are for the personal use of a person referred to in
new paragraphs 86A(2)(a), (b) or (c). The persons referred to in new paragraphs
86A(2)(a), (b) and (c) are persons working outside Australia as a Commonwealth
officer, or a State or Territory officer, or a person who is a spouse or dependent child
accompanying such an officer outside Australia.
Item 8
Item 8 amends paragraph 99ZI(2)(c) to provide that articles containing drug like
substances may, in addition to the current circumstances, be consigned for export
from Australia if the substances to be exported are prescription drugs and are for the
personal use of a person referred to in new paragraphs 86A(2)(a), (b) or (c). The
persons referred to in new paragraphs 86A(2)(a), (b) and (c) are persons working
outside Australia as a Commonwealth officer, or a State or Territory officer, or a
person who is a spouse or dependent child accompanying such an officer outside
Australia.
Items 9 to 12
These items amend subsection 99ZJ(4) of the Act to provide that the mechanisms for
satisfying a Customs officer that prescription drugs are for the personal use of the
exporter, or a person accompanying the exporter, also apply to satisfying the Customs
officer that prescription drugs are for the personal use of the persons referred to in
new paragraphs 86A(2)(a), (b) or (c). The persons referred to in new paragraphs
86A(2)(a), (b) and (c) are persons working outside Australia as a Commonwealth
officer, or a State or Territory officer, or a person who is a spouse or dependent child
accompanying such an officer outside Australia.
This amendment is achieved by referring to all the persons for whom the prescription
drugs may be for personal use as the `applicable person'.
Item 13
This item amends subparagraph 99ZK(2)(b)(iii) to provide that a statement may, in
addition to the circumstances currently provided, be made for a person covered by
paragraph 86A(2)(a), (b) or (c).
This amendment ensures that the statement required in relation to consignment for
export of an article containing drug like substances (where those goods are not
required to be entered for export under the Customs Act 1901) can be made in relation
to export of an article containing drug like substances that are prescription drugs but
for the personal use outside Australia of a person mentioned in new paragraphs
86A(2)(a), (b) or (c). The persons mentioned in new paragraphs 86A(2)(a), (b) and
(c) are persons working outside Australia as a Commonwealth officer, or a State or
Territory officer, or a person who is a spouse or dependent child accompanying such
an officer outside Australia.
Item 14
This item amends subparagraph 99ZT(b)(ii) to provide that, in addition to the current
arrangements, where an exporter establishes that drug like substances transferred to
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the Medicare Australia Chief Executive Officer under section 99ZJ or 99ZK
following their detention are prescription drugs for the personal use of a person
mentioned in new paragraphs 86A(2)(a), (b) or (c), those substances are not forfeited
to the Commonwealth. The persons mentioned in new paragraphs 86A(2)(a), (b) and
(c) are persons working outside Australia as a Commonwealth officer, or a State or
Territory officer, or a person who is a spouse or dependent child accompanying such
an officer outside Australia.
Item 15
This item amends subsection 103(4AA) to include in the exemptions to the offence
for possession or consignment for export of a quantity of a pharmaceutical benefit or
pharmaceutical item that exceeds the designated quantity, circumstances where the
quantity of the benefit or item was supplied by an approved supplier for treatment of a
person referred to in the new paragraphs 86A(2)(a), (b) and (c). The persons
mentioned in new paragraphs 86A(2)(a), (b) and (c) are persons working outside
Australia as a Commonwealth officer, or a State or Territory officer, or a person who
is a spouse or dependent child accompanying such an officer outside Australia.
SCHEDULE 3 - COUPLES LIVING APART
Amendments to the National Health Act 1953
Item 1
Item 1 amends section 84B to extend the definition of spouse to provide that legally
married people are not taken to be living separately and apart on a permanent basis if
they are permanently living apart only because of the illness or infirmity of either or
both of them. Similarly, the amendment provides that de facto couples are not taken
to have ceased living together if they are living apart only because of the illness or
infirmity of either or both of them. These amendments provide for the same
arrangements for safety net concession and entitlement cards under Part VII
Division 1A to apply to legally married and de facto couples permanently living apart
due to illness or infirmity as would otherwise apply if the couple were living together.
Item 2
This amendment provides that the reference to `family' in paragraph 87(2)(c) is to a
family as defined in s84B. This means that the total amounts counted as having
previously been charged to a family for the purpose of calculating if the family has
reached the general patient safety net in a particular calendar year will include
amounts charged to a `spouse' as defined under the amended definition referred to in
Item 1 immediately above.
The amendment ensures that the charges made for general benefit prescriptions for a
person and a person's partner when they are permanently living apart due to illness or
infirmity can be combined for the purpose of determining whether the general patient
safety net amount has been reached.
Item 3
The PBS safety net operates by calendar year. Item 3 applies the amended definition
of spouse for annual safety net entitlement periods commencing from 1 January of
each year from 2009 onwards.
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SCHEDULE 4 - MISCELLANEOUS
Amendments to the National Health Act 1953
Items 1 to 3
The amendments set out in Schedule 1 mean that technical amendments are required
for the definitions of combination item has a drug and pharmaceutical item has a
drug. The definitions for those terms set out in subsection 84(1) are repealed and new
definitions are substituted. New subsections 84ABA(1) and (2) are referential
definitions for pharmaceutical item has a drug and combination item has a drug,
respectively. This means that the exact words do not need to be used in the Act to
convey their meanings, rather these subsections provide explanations for those terms
using broader language.
Items 4 and 5
These items amend subsections 88(1A) and 88(1C) by removing the requirement for
notice to be published in the Gazette of the determinations specifying pharmaceutical
benefits that may be prescribed by participating dental practitioners and authorised
optometrists, and instead including a statement that the determinations are made by
way of legislative instrument.
This amendment makes clear that the determinations under subsections 88(1A) and
88(1C) of the Act are legislative instruments for the purposes of the Legislation
Instruments Act 2003. Those instruments will therefore be registered on the Federal
Register of Legislative Instruments.
Item 6: Application
Item 6 makes clear that amendments made by Items 4 and 5 of this Schedule apply to
determinations made on or after the day on which this Schedule commences.
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