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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS
TRANSPARENCY AND COST RECOVERY) BILL 2021
EXPLANATORY MEMORANDUM
Circulated by authority of the Minister for Health and Aged Care, the Hon Greg Hunt
MP
NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS
TRANSPARENCY AND COST RECOVERY) BILL 2021
OUTLINE
The National Health Amendment (Pharmaceutical Benefits Transparency and Cost
Recovery Bill 2021 (the Bill) permits the publication of information and simplifies
administrative processes associated with the publication of information and cost
recovery arrangements via two separate measures.
The National Health Act 1953 (the Act) makes provision in relation to
pharmaceutical, sickness and hospital benefits, and of medical and dental services.
1. Transparency Amendments
Currently information can only be divulged as permitted by section 135A of the Act.
The Department of Health (the Department) currently publishes information in
relation to the Pharmaceutical Benefits Advisory Committee (PBAC) and on the
Medicine Status Website, by relying on public interest certificates under
paragraph 135A(3)(a) of the Act.
Since 2019, the Department has consulted extensively with the pharmaceutical
industry on the recent transparency reforms developed under the 2017 Strategic
Agreement with Medicines Australia, as part of the broader package of PBS process
improvements. The new standardised redaction criteria and updated financial ranges
for PSDs, were trialled through three separate pilots before being formally
implemented in November 2020. Supporting materials which set out the standardised
redaction criteria and internal review process, have been updated and published.
The most sensitive information which is published by the Department is that included
in public summary documents (PSDs) of PBAC considerations, which often contain
information the applicant (most often a pharmaceutical company) considers to be
sensitive or commercial-in-confidence. The purpose of the PSD is to provide the
public with information pertaining to PBAC recommendations to ensure doctors,
health professionals and patients are aware of the rationale and evidentiary basis for
specific PBAC recommendations. Publication of PSDs is a long standing and well-
accepted practice agreed as part of our obligations under the Australian-United States
Free Trade Agreement. These obligations are based on transparency principles
supporting the release of information regarding the basis of Government decisions for
the subsidy of pharmaceuticals to the Australian community. As a result, proposed
legislative amendments will not incorporate the standardised redaction criteria for
PSDs nor provide for an external appeals mechanism in relation to publication
decisions.
Amendments to the Act will formalise and legislate current process, provide greater
transparency for industry on the publication of information and reduce the
administrative burden on the Department.
2. Cost Recovery Amendments
Section 99YBA of the Act provides that regulations may prescribe fees for service.
Current cost recovery arrangements including fees for services provided in relation to
the PBAC and the Australian Technical Advisory Group on Immunisation are
1
specified in the National Health (Pharmaceuticals and Vaccines - Cost Recovery)
Regulations 2009 (the Regulations).
In line with Australian Government Charging Framework, the Regulations are
updated annually to ensure they reflect the true efficient costs of providing services,
requiring Governor-General Assent and tabling in both houses of Parliament.
In November 2020, the Regulations were amended to include fees associated with the
management of deeds - a rebate management fee charged within the existing Pricing
pathway A, B or C fee and standalone fees for deed variations and deed renewal
requests. Deed-related fees commenced on 1 January 2021.
As required by the Australian Government Charging Framework, consultation on fee
changes is undertaken annually through the Cost Recovery Implementation Statement
process.
Amendments to the Act allow for fees and other cost recovery arrangements to be
included in a disallowable legislative instrument, reducing the administrative burden
on the Department. Amendments will also benefit industry as they provide greater
transparency by allowing for the separation of the fees associated with entry into,
management, variation and renewal of a deed arrangement. Deed related fees could
then be charged at the time these costs are incurred by the Commonwealth.
Amendments in the bill will:
Insert a new subsection into Part VII of the Act to establish the statutory authority
for the publication of PBAC agendas, meeting outcomes, public summary
documents and the information published on the Medicine Status Website. This
includes a regulation making power to allow for subsequent amendments to the
National Health (Pharmaceutical Benefits) Regulations 2017, to define the types
of information published by the Department.
Replace s99YBA of the Act to provide for PBS cost recovery arrangements
including specifying fees for services and costs incurred to be set out in a
disallowable legislative instrument, replacing the existing regulations. This
includes a power to make separate fee categories to recover the costs incurred by
the Commonwealth when entering into and managing deeds at the request of an
applicant.
Make consequential amendments to sections 99YB and 99YBB as a result of the
amendments to section 99YBA; and update the wording of s99YBC to remove
provisions in relation to the review of cost recovery fees which occurred in 2011.
Financial Impact Statement
There is no financial impact for the Commonwealth from this Bill.
2
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS
TRANSPARENCY AND COST RECOVERY) BILL 2021
The National Health Amendment (Pharmaceutical Benefits Transparency and Cost
Recovery Bill 2021 (the Bill) 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 Bill
The National Health Amendment (Pharmaceutical Benefits Transparency and Cost
Recovery Bill 2021 (the Bill) permits the publication of information and simplifies
administrative processes associated with the publication of information and cost
recovery arrangements via two separate measures.
The National Health Act 1953 (the Act) makes provision in relation to
pharmaceutical, sickness and hospital benefits, and of medical and dental services.
1. Transparency Amendments
Currently, information can only be divulged as permitted by section 135A of the Act.
The Department of Health (the Department) currently publishes information in
relation to the Pharmaceutical Benefits Advisory Committee and on the Medicine
Status Website, by relying on public interest certificates under paragraph 135A(3)(a)
of the Act.
Since 2019, the Department has consulted extensively with the pharmaceutical
industry on the recent transparency reforms developed under the 2017 Strategic
Agreement with Medicines Australia, as part of the broader package of PBS process
improvements. In addition, the new standardised redaction criteria and updated
financial ranges for PSDs, were trialled through three separate pilots before being
formally implemented in November 2020. Supporting materials which set out the
standardised redaction criteria and internal review process, have been updated and
published.
Amendments will formalise and legislate current process, support increased
transparency on the publication of information and reduce the administrative burden
on the Department.
2. Cost Recovery Amendments
Section 99YBA of the Act provides that regulations may prescribe fees for service.
Current cost recovery arrangements including fees for service provided in relation to
the PBAC and Australian Technical Advisory Group on Immunisation are specified in
the National Health (Pharmaceuticals and Vaccines - Cost Recovery) Regulations
2009 (the Regulations).
3
In line with Australian Government Charging Framework, the Regulations are
updated annually to ensure they reflect the true efficient costs of providing services,
requiring Governor-General Assent and tabling in both houses of Parliament.
In November 2020, the Regulations were amended to include fees associated with the
management of deeds - a rebate management fee charged within the existing Pricing
pathway A, B or C fee and standalone fees for deed variations and deed renewal
requests. Deed-related fees commenced on 1 January 2021.
As required by the Australian Government Charging Framework, consultation on fee
changes is undertaken annually through the Cost Recovery Implementation Statement
process.
Amendments allow for fees and other cost recovery arrangements to be included in a
disallowable legislative instrument, reducing the administrative burden on the
Department. Amendments will also benefit industry as they provide greater
transparency by allowing for the separation of the fees associated with entry into,
management, variation and renewal of a deed arrangement. Deed related fees could
then be charged at the time these costs are incurred by the Commonwealth.
Specifically, the Bill seeks to amend the National Health Act 1953 (the Act) to:
1. Insert a new subsection into Part VII of the Act to establish the statutory authority
for the publication of Pharmaceutical Benefits Advisory Committee (PBAC)
agendas, meeting outcomes, public summary documents and the information
published on the Medicine Status Website (MSW). This includes a regulation
making power to allow for subsequent amendments to the National Health
(Pharmaceutical Benefits) Regulations 2017, to define the types of information
published by the Department.
2. Replace s99YBA of the Act to provide for PBS cost recovery arrangements
including specifying fees for services and costs incurred to be set out in a
disallowable legislative instrument, replacing the existing regulations. This
includes a power to make separate fee categories to recover the costs incurred by
the Commonwealth when entering into and managing deeds at the request of an
applicant.
3. Make consequential amendments to sections 99YB and 99YBB as a result of the
amendments to section 99YBA, and update the wording of s99YBC to remove
provisions in relation to the review of cost recovery fees which occurred in 2011.
Human rights implications
This Bill engages the following rights:
The right to health care
The Bill engages Article 2 and Article 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 Pharmaceutical Benefits Scheme (PBS) assists with the promotion of this human
right by providing subsidised access to medicines and vaccines for Australians. In
addition, providing information on the PBS listing process and allowing the
4
Commonwealth to recover its costs associated with PBS listing and improving the
transparency and efficiency of processes, aids in creating a viable and well-
functioning PBS. This in turn assists Australians to more easily access necessary
medicines which, in turn, promotes the various rights to health in the Conventions.
The amendment in relation to the replacement of regulations with rules relates only to
machinery of government. Importantly, the rules will remain disallowable by
Parliament, meaning that there is no loss of transparency related to this amendment
and no interaction with human rights.
The amendment in relation to defining that the Commonwealth may charge for the
costs incurred in entering into a deed at the request of an applicant will ensure that the
Commonwealth is recovering the cost of performing its duties as requested directly
from that applicant, thus assisting the Commonwealth to continue providing
subsidised access to medicines and vaccines for Australian citizens. This upholds the
right of Australian citizens to enjoy the highest attainable standard of physical and
mental health.
The right to privacy and reputation
The Bill engages Article 17 of the International Covenant on Civil and Political
Rights (ICCPR) which prohibits unlawful or arbitrary interferences with a person's
privacy, family, home and correspondence. It also prohibits unlawful attacks on a
person's reputation. It provides that persons have the right to the protection of the law
against such interference or attacks.
Currently, information can only be divulged as permitted by section 135A of the
National Health Act 1953 (the Act).
The Department currently publishes information in relation to the Pharmaceutical
Benefits Advisory Committee and on the MSW, by relying on public interest
certificates under paragraph 135A(3)(a) of the Act. The most sensitive information
which is published by the Department is that included in public summary documents
(PSDs) of PBAC considerations, which often contains information the applicant (most
often a pharmaceutical company) considers to be sensitive or commercial in
confidence.
The amendment to provide the Department with the authority to publish information
in relation to the PBAC may limit Article 17 given it relates to the publication of
personal information. However, the purpose of the PSD is to provide the public with
information pertaining to PBAC recommendations to ensure doctors, health
professionals and patients are aware of the rationale and evidentiary basis for specific
PBAC recommendations.
Procedure guidance material published on the internet currently sets out the
standardised redaction criteria and provides for an internal review process. In
addition, publication of PSDs is a long standing and well-accepted practice agreed as
part of our obligations under the Australian-United States Free Trade Agreement.
These obligations are based on transparency principles supporting the release of
information regarding the basis of Government decisions for the subsidy of
pharmaceuticals to the Australian community. As a result, proposed legislative
5
amendments will not incorporate standardised redaction criteria for PSDs nor provide
for an external appeals mechanism in relation to publication decisions.
Conclusion
The Bill is compatible with human rights because it promotes the protection of human
rights and to the extent that it may limit human rights, those limitations are
reasonable, necessary and proportionate.
The Hon Greg Hunt MP, Minister for Health and Aged Care
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NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS
TRANSPARENCY AND COST RECOVERY) BILL 2021
NOTES ON CLAUSES
Clause 1 - Short Title
This clause provides that the Bill once enacted may be cited as the National Health
Amendment (Pharmaceutical Benefits Transparency and Cost Recovery) Act 2021.
Clause 2 - Commencement
Section 1 commences the day after Royal Ascent. Section 2 commences on
proclamation to align with the commencement of the disallowable legislative
instrument which is intended to take effect on 1 January 2022.
Clause 3 - Schedule(s)
This clause provides that each Act that is specified in a Schedule to this Bill is
amended or repealed as set out in the applicable items in the Schedule concerned, and
any other item has effect according to its terms. This is a technical provision which
gives operational effect to the amendments contained in the Schedule.
SCHEDULE 1 - AMENDMENT TO THE NATIONAL HEALTH ACT 1953
Part 1 - Transparency
Item 1 - After section 101A
This item inserts a new subsection into the Act to provide the Department with the
authority to publish information and to provide an application provision to specify
commencement.
Specifically, this items permits publication of Pharmaceutical Benefits Advisory
Committee (PBAC) or its subcommittees meeting agendas, meeting outcomes, public
summary documents and the information published on the Medicine Status Website
(MSW). This information is currently published by the Department using public
interest certificates.
Item 1 also creates a regulation making power to provide for subsequent amendments
to the National Health (Pharmaceutical Benefits) Regulations 2017. These
amendments will provide greater transparency for industry by defining the content of
the information published in meeting agendas, meeting outcomes, public summary
documents and the information published on the MSW.
Information published in meeting agendas, meeting outcomes, public summary
documents and the information published on the MSW may relate to applications that
have not been recommended by the PBAC, or have been subsequently withdrawn
from the Pharmaceutical Benefits Scheme (PBS) listing process by an applicant.
Amendments formalise and legislate current Departmental process and will not
change the information currently published by the Department in relation to PBAC, its
subcommittees or the PBS listing process.
7
Item 2 - Application provision
This item inserts an application provision into the Act to clarify that the Department
may publish information that was received before commencement to mitigate the
administrative difficulties associated with the timing of lodgement of submissions for
PBAC consideration and publication of information.
Part 2 - Cost recovery
Item 3 - After subsection 85E(3)
This item inserts a new (3A) and note into the Act to clarify that the Minister's ability
to make rules that prescribe fees in relation to costs incurred under subsection
99YBA(2) is not limited by the wording of subsection 85E(3)(a).
Item 4 - Sections 99YB and 99YBA
This item replaces sections 99YB and 99YBA of the Act to provide:
A revised summary to reflect the amendments made to this Division - this is a
consequential amendment.
For the Minister to make rules through a legislative instrument for cost
recovery of:
o Services related to vaccines and pharmaceutical benefits; and
o services and costs incurred for the establishment, administration,
variation and renewal of deeds entered into under subsection
85E(3)(a) of the Act..
In line with Australian Government Charging Framework, the National Health
(Pharmaceuticals and Vaccines - Cost Recovery) Regulations 2009 (the Regulations)
are updated annually to ensure they reflect the true efficient costs of providing
services, requiring Governor-General Assent and tabling in both houses of Parliament.
Replacing the existing regulations with a disallowable legislative instrument will
reduce the administrative burden on the Department to update the regulations
annually. This amendment will also benefit industry as it provides greater
transparency by allowing for the separation of the fees associated with entry into,
management, variation and renewal of a deed arrangement. In addition, deed related
fees could then be charged at the time these costs are incurred by the Commonwealth.
Consultation on fee changes will continue to be undertaken annually through the Cost
Recovery Implementation Statement process.
Item 5 - Paragraph 99YBB(1)(a)
This item amends the wording of this paragraph to reflect the amendments made by
Item 4. This is a consequential amendment.
Item 6 - Subparagraph 99YBB(1)(b)(i)
This item amends the wording of this subparagraph to reflect the amendments made
by Item 4. This is a consequential amendment.
Item 7 - Subparagraph 99YBB(1)(b)(ii)
This item replaces this subparagraph to reflect the amendments made by Item 4. This
is a consequential amendment.
8
Item 8 - Section 99YBC (heading)
This item replaces the heading in the Act to reflect the amendments made by Item 9.
This is a consequential amendment.
Item 9 - Subsections 99YBC(1) to (4)
This item removes these subsections from the Act. Subsections (1) to (4) relate to the
review of cost recovery arrangements which was undertaken by the Department in
November 2011.
Item 10 - Subsection 99YBC(5) (heading)
This item removes this heading from the Act to reflect the amendments made by Item
9. This is a consequential amendment.
Item 11 - Continued application of old law for services applied for before
commencement
This item inserts a new provision into the Act to preserve section 99YBA of the Act
and the Regulations, which will continue to apply in relation to applications received
by the Department before commencement.
Item 12 - Exercise of powers after commencement where fee is payable for
service applied for before commencement
This item inserts new provisions into the Act to clarify that where a fee remains
unpaid for services provided under the Regulations, services may not be provided in
relation to application made under the new rules until that fee is paid.
This item maintains the current process provided for under the legislation which
relates to withholding services where fees are unpaid.
Item 13 - Application of new law in relation to deeds
This item inserts new provisions into the Act to clarify that the amendments made by
Item 4 apply to the establishment, administration, variation and renewal of deeds
whenever the application for that activity was received on or after commencement.
9