Select Legislative Instrument 2009 No. 195

National Health Act 1953

National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1)

Section 140 of the National Health Act 1953 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which by the Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act, and, in particular, includes prescribing the fees and allowances payable to members of a committee established under the Act, other than members who are officers of the Public Service of the Commonwealth or of a State.

The purpose of the Regulations is to amend the National Health (Pharmaceutical Benefits) Regulations 1960 (the Principal Regulations) by prescribing ‘reduction days’ for the purposes of subsection 99ADH(2) of the Act and setting the fees and allowances payable to the chair and members of the Drug Utilisation Sub-Committee (DUSC) and the Economics Sub-Committee (ESC), established under section 101A of the Act.

The amendment prescribing ‘reduction days’ is required for the purpose of issue of a notice under paragraph 99ADH(1)(d) of the Act, which provides that the Minister may give a notice related to reductions in prices for brands of pharmaceutical items listed under Part VII of the Act and subsidised by the Commonwealth. The notice is required to state a day, which subsection 99ADH(2) provides must be a prescribed day. The Regulations prescribe the relevant days.

This amendment relates to changes made to the Act and the Principal Regulations in 2007 which provided for new pricing arrangements under Part VII of the Act to enable the Commonwealth Government to capture the benefits of competition where subsidised drugs have multiple brands. The amendment to the Principal Regulations does not represent a change to the fundamentals of the pricing arrangements introduced through the 2007 reforms.

The Regulations also provide that the fees and allowances payable to the chair and members of DUSC and ESC are the amounts that are payable to the chair and members of professional committees under Schedule B to the Remuneration Tribunal Determination 2008/07: Remuneration and Allowances for Holders of Part-Time Public Office.

DUSC and ESC are sub-committees of the Pharmaceutical Benefits Advisory Committee (PBAC), which is established under section 100A of the Act. The primary role of PBAC is to make recommendations and give advice to the Minister for Health and Ageing (the Minister) in relation to drugs and medicinal preparations seeking to be subsidised under the Pharmaceutical Benefits Scheme (PBS), and about drugs already listed on the PBS.

Section 101A of the Act provides that PBAC may establish sub-committees to assist it in performing its functions. DUSC and ESC are established in accordance with section 101A of the Act. These sub-committees undertake evaluation and analysis work to support PBAC’s deliberations. Subsection 101A(4) provides that sub-committees established under that section (i.e. DUSC and ESC) are ‘committees’ for the purposes of section 140.

Details of the Regulations are set out in the Attachment.

Consultation has been undertaken with the Remuneration Tribunal, who felt that DUSC and ESC should be paid in accordance with regulations made under section 140 of the Act. Consultation with DUSC and ESC was not considered necessary given that there is no substantive change of the members' entitlements.

No external consultation was undertaken in relation to prescribing the reduction days, however the pharmaceutical industry, through Medicines Australia and the Generic Medicines Industry Association, were consulted as part of the consultation process for the 2007 reforms, which included the price disclosure arrangements. As this is a minor amendment and is required to give effect to existing policy, it was not considered necessary to undertake additional consultation.

The Act specifies no conditions that need to be met before the power to make the Regulations may be exercised.

The Regulations commence on 31 July 2009.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

ATTACHMENT

Details of NATIONAL HEALTH (PHARMACEUTICAL BENEFITS) AMENDMENT REGULATIONS 2009 (NO. 1)

Regulation 1 – Name of Regulations

This regulation provides that the title of the Regulations is the National Health (Pharmaceutical Benefits) Amendment Regulations 2009 (No. 1).

Regulation 2 – Commencement

This regulation provides for the Regulations to commence on 31 July 2009.

Regulation 3 – Amendment of National Health (Pharmaceutical Benefits) Regulations 1960

This regulation provides that the National Health (Pharmaceutical Benefits) Regulations 1960 (the Principal Regulations) are amended as set out in Schedule 1.

Schedule 1 – Amendments

Item 1

This item prescribes 1 April or 1 August in any year as ‘reduction days’ for the purposes of subsection 99ADH(2) of the National Health Act 1953 (the Act). After the days are prescribed, one of those reduction days may be stated in any notice sent by the Minister under paragraph 99ADH(1)(d) to ensure that price reductions for certain pharmaceuticals under the price disclosure provisions in Division 3B of Part VII of the Act operate as intended.

Item 2

This item inserts definitions of ‘Drug Utilisation Sub-Committee’ and ‘Economics Sub-Committee’ for Part VII of the Principal Regulations.

Item 3

This item provides that the fees and allowances payable to the chair and members of DUSC and ESC are the amounts that are payable to the chair and members of professional committees under Schedule B to the Remuneration Tribunal Determination 2008/07: Remuneration and Allowances for Holders of Part-Time Public Office (as amended). This includes provision for the relevant travel tier allowance at the rate set out in Remuneration Tribunal Determination 2004/03: Official Travel by Office Holders (as amended).