Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
National Health Amendment (Pharmaceutical Benefits) Bill 2014



Download PDFDownload PDF

ISSN 1328-8091

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest.

BILLS DIGEST NO. 7, 2014-15 14 JULY 2014

National Health Amendment (Pharmaceutical Benefits) Bill 2014 Leah Ferris Social Policy Section

Contents

Purpose of the Bill ............................................................... 3

Background ......................................................................... 3

Operation of the Pharmaceutical Benefits Scheme ................ 3

History of the PBS .................................................................. 3

Listing items on the PBS ........................................................ 4

PBS co-payment .................................................................... 4

PBS Safety Net ....................................................................... 4

Changes to the co-payment and the Safety Net ..................... 5

Past changes .......................................................................... 5

National Commission of Audit ............................................... 5

2014-15 Budget .................................................................... 5

Committee consideration .................................................... 5

Community Affairs Legislation Committee .............................. 5

Senate Standing Committee for the Scrutiny of Bills .............. 5

Parliamentary Joint Committee on Human Rights .................. 5

Policy position of non-government parties/independents ..... 6

The Labor Party ..................................................................... 6

Position of major interest groups ......................................... 6

Pharmacy Guild of Australia .................................................. 6

Medicines Australia ............................................................... 6

Consumers Health Forum ...................................................... 6

Public Health Association Australia ....................................... 6

Financial implications .......................................................... 7

Key issues ........................................................................... 7

Impact on consumers .............................................................. 7

Date introduced: 18 June 2014

House: House of Representatives

Portfolio: Health

Commencement: Sections 1-3 commence on Royal Assent. Schedules 1-5 commence on 1 January each year from 2015-2019, respectively.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_ Legislation

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 2

New listings ............................................................................. 8

Alternate measures ................................................................. 8

Main Provisions ................................................................... 8

Increasing the co-payment amounts..................................... 8

Increasing the Safety Net amounts ....................................... 8

Concluding comments ......................................................... 9

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 3

Purpose of the Bill The purpose of the National Health Amendment (Pharmaceutical Benefits) Bill 2014 (the Bill) is to amend the National Health Act 1953 (the Act)1 to increase the co-payment and Safety Net amounts for items listed under either the Pharmaceutical Benefits Scheme Schedule (PBS Schedule) or the Repatriation Schedule of Pharmaceutical Benefits (RPBS).

In particular the Bill will:

• increase the co-payment for general patients by $5.00 (to $42.70) and the co-payment for concessional card holders by $0.80 (to $6.90) 2 and

• increase the safety net for general patients by ten per cent each year for four years and the safety net for concessional patients by two prescriptions each year for four years.3

Background Operation of the Pharmaceutical Benefits Scheme

History of the PBS Since 1948, the Pharmaceutical Benefits Scheme (PBS) has aimed to provide Australians with affordable access to medicines.4 Under the PBS, the Government subsidises the cost of some medicines. These medicines are listed on the PBS Schedule, which is managed by the Department of Health and administered by the Department of Human Services.5

The PBS forms part of the Government’s National Medicines Policy,6 which was developed to ‘meet medication and related service needs, so that both optimal health outcomes and economic objectives are achieved’.7 The central objectives of the National Medicines Policy are:

• timely access to the medicines that Australians need, at a cost individuals and the community can afford

• medicines that meet appropriate standards of quality, safety and efficacy

• quality use of medicines and

• maintaining a responsible and viable medicines industry.8

In 2012-13, around 197 million PBS-subsidised prescriptions were dispensed at a cost of over $8.8 billion,9 representing nearly 17 per cent of the Health and Ageing portfolio budget of $52.2 billion.10 Although the Government manages the price of each medicine on the PBS, the total cost of the PBS remains uncapped. Over the ten years to 2004-05, the cost of the PBS grew by nearly 13 per cent each year.11

Recent data released by the Organisation for Economic Co-operation and Development (the OECD) shows that while Australia is below average in terms of pharmaceutical spending as a percentage of health expenditure, its spending per capita was higher than the OECD average.12

1. National Health Act 1953, accessed 30 June 2014. 2. These co-payments amounts include the estimated Consumer Price Index increase that will occur 1 January 2015 and therefore may be subject to change: Department of Health, '2014 Budget information on the Pharmaceutical Benefits Scheme', Pharmaceutical Benefits Scheme (PBS) website, accessed 14 July 2014.

3. Explanatory Memorandum, National Health Amendment (Pharmaceutical Benefits) Bill 2014, p. 1, accessed 20 June 2014. 4. Department of Health, ‘About the PBS’, PBS website, accessed 30 June 2014. 5. Ibid.

6. Department of Health, ‘National medicines policy’, Department of Health website, accessed 30 June 2014. 7. Department of Health, ‘About the PBS’, op. cit. 8. Department of Health and Ageing, The impact of PBS reform: report to Parliament on the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007, Canberra, 2010, p. 1, accessed 30 June 2014.

9. Department of Health and Ageing, Annual report 2012-2013, pp. 62 and 71, accessed 30 June 2014. 10. Ibid., p. 277. 11. Department of Health, ‘About the PBS: managing the cost of the scheme’, PBS website, accessed 30 June 2014. 12. M Lam, 'Med spend below OECD and falling', Pharma in Focus, 4 July 2014, accessed 9 July 2014 (can only be accessed via subscription).

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 4

Listing items on the PBS The rationale for the PBS Schedule is to ensure the health of all Australians is maintained in a way that is cost effective. The process for listing is as follows:

An application to have an item listed on the PBS can be made for any medicine for any use for which it is registered on the Australian Register of Therapeutic Goods at the time of listing.

The Pharmaceutical Benefits Advisory Committee (PBAC) is an independent statutory committee that meets three times a year to assess applications for listing on the PBS based on the clinical benefit and cost-effectiveness compared with other treatments or products for the same condition or use. It is assisted by the PBAC secretariat and teams of expert drug evaluators.

The PBAC may reject an application or make recommendations regarding a medicine’s uses and any conditions or restrictions on those uses and the Minister of Health can only approve the subsidy of a medicine in line with that independent recommendation.

The Minister (or delegate) considers pricing matters following PBAC meetings. A ceiling price or price range for an item that has been approved by the PBAC following negotiation may be recommended by the Minister (or delegate).

The decision to subsidise an item is considered by Cabinet if the net cost to the PBS is greater than $20 million per year, and then determined by the Minister for Health. The Government also exercises a number of controls to manage the overall cost of the scheme. 13

PBS co-payment Once an item is listed on the PBS, the Government sets a wholesale price for the drug. When a consumer purchases the drug at a pharmacy, they are required to pay a co-payment (up to $36.90 for most PBS medicines or $6.00 by those persons who have a concession card).14 If the cost of the medicine is higher than the co-payment, the Government pays the remainder. The co-payment is intended to act as a contribution to the overall cost of the PBS. The amount of the co-payment is adjusted on 1 January each year in line with the Consumer Price Index (CPI).15 On 1 January 2014, the general patient co-payment amount increased from $36.10 to $36.90 and the concessional co-payment amount increased from $5.90 to $6.00.16

PBS Safety Net The PBS Safety Net is aimed at protecting patients who require large quantities of medicines by reducing the cost of their medicines once they reach a threshold. Under the scheme, individuals or family units can apply to receive a Safety Net Entitlement Card or Safety Net Concession Card. The threshold applies to a family unit ‘regardless of whether the unit consists of an individual, a couple or a family with dependent children’.17

On 1 January 2014, the Safety Net thresholds changed from $354.00 to $360.00 (for concession card holders) and from $1,390.60 to $1,421.20 (for all other patients).18 As with the co-payment, the threshold increases in line with the CPI. Upon reaching the threshold, concession card holders no longer have to pay for PBS prescriptions for the remainder of that calendar year, while general card holders only have to pay the concessional co-payment rate for the remainder of that calendar year. It remains the responsibility of consumers to keep a record of their PBS medicine costs on a Prescription Record Form in order to qualify for the safety net.19

13. Further information on the listing of medicines is set out on the PBS website: Department of Health, ‘The listing steps’, Pharmaceutical Benefits Scheme website, accessed 30 June 2014. 14. Department of Health, ‘About the PBS’ op. cit. 15. Ibid. 16. Department of Health, ‘2014 PBS co-payment and safety net amounts’, Pharmaceutical Benefits Scheme website, accessed 30 June 2014. 17. Department of Health, ‘About the PBS’ op. cit. 18. Department of Health, ‘2014 PBS co-payment and safety net amounts’, op. cit. 19. Department of Human Services (DHS), ‘Pricing of PBS medicine’, Medicare website, accessed 30 June 2014.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 5

Changes to the co-payment and the Safety Net

Past changes This is not the first time that the PBS co-payments or the safety net have been increased, with the latest changes occurring during the Howard Government. From 1 January 2005, patient co-payments increased by 21 per cent.20 In the 2005-06 Budget, the Government announced that both general and concessional safety nets would increase annually from 1 January 2006 to 1 January 2009.21 Despite having criticised the increases while in Opposition, this increase was retained under the Rudd Government.

National Commission of Audit Both the increase in co-payments and the increase to the safety net were discussed by the National Commission of Audit (the Commission) in its report into Government expenditure.22 While the Commission recommended that the co-payment for general patients be increased by $5.00, it did not recommend any changes to the concessional co-payment.23 Its view on the safety net was also different, with general patients to pay $11.00 as opposed to $6.00 once they hit the threshold and concession card holders to co-contribute $2.00 to the cost of their medicines once the threshold had been met.24

2014-15 Budget The proposed measures were announced by the Government in the 2014-15 Federal Budget.25

Committee consideration Community Affairs Legislation Committee On 19 June 2014, the Selection of Bills Committee referred the provisions of the Bill to the Community Affairs Legislation Committee (Community Affairs Committee) for inquiry and report by 26 August 2014.26

Senate Standing Committee for the Scrutiny of Bills The Senate Standing Committee for the Scrutiny of Bills had no comment to make with respect to this Bill.27

Parliamentary Joint Committee on Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible and that it advances the protection of human rights ‘by providing Australians with subsidised access to medicines’.28

The Parliamentary Joint Committee on Human Rights, in its evaluation of the Bill, noted ‘the effect of the Bill will be to increase the cost of medications for all consumers, including those reliant on social security payments’ and that the proposed measures represent ‘a limitation on the right to health and/or a retrogressive measure which is not explicitly addressed in the statement of compatibility for the Bill’.29 The Committee commented that 'it would expect the statement of compatibility to provide an economic assessment of the impact of the Bill on

20. Department of Health, ‘History of PBS copayments and safety net thresholds’, PBS website, accessed 30 June 2014. 21. L Buckmaster, National Health Amendment (Budget Measures—Pharmaceutical Benefits Safety Net) Bill 2005, Bills digest, 56, 2005-06, Parliamentary Library, Canberra, 2005, p. 4, accessed 30 June 2014. 22. National Commission of Audit (NCOA), Towards responsible government: phase one, report, NCOA, February 2014, pp. 109-113, accessed

29 June 2014. 23. Ibid., p. 113. 24. Ibid. 25. Australian Government, Budget measures: budget paper no. 2: 2014-15, 2014, p. 140, accessed 30 June 2014. For further information see:

L Ferris, ‘Pharmaceutical Benefits Scheme’, Budget review 2014-15, Research paper series, 2013-14, Parliamentary Library, Canberra, 2014, p. 85, accessed 9 July 2014. 26. Selection of Bills Committee, Report No. 7 of 2014, Senate, Canberra, 19 June 2014, accessed 29 June 2014. For further information about the inquiry, see: Senate Standing Committee on Community Affairs, Inquiry into the National Health Amendment (Pharmaceutical Benefits) Bill

2014, The Senate, Canberra, June 2014, accessed 10 July 2014. 27. Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 7 of 2014, Senate, Canberra, 25 June 2014, p. 34, accessed 30 June 2014. 28. Explanatory Memorandum, National Health Amendment (Pharmaceutical Benefits) Bill 2014, op. cit., p. 2. 29. Parliamentary Joint Committee on Human Rights, Eighth report of the 44th Parliament, Canberra, June 2014, p. 24, accessed 29 June 2014.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 6

individuals and their capacity to bear the additional upfront payments for medicines'.30 It has requested that the Minister advise further as to the purpose of the proposed measures and whether they can be considered reasonable.31

Policy position of non-government parties/independents The Labor Party The Labor Party has announced that it will not support the Bill.32 Catherine King, the Shadow Minister for Health, has argued that these changes will lead to patients not filling their prescriptions and that any savings achieved should go ‘straight back into healthcare funding’ as opposed to the Medical Research Future Fund.33 She has also stated that the proposed price increases are ‘part of a concerted attack on universal healthcare in Australia’.34

Position of major interest groups Pharmacy Guild of Australia As part of its comments on the recent Federal Budget, the Pharmacy Guild of Australia (the Guild) has criticised the increase in the cost of medicines for consumers and has argued that it will particularly affect the elderly in light of other social security changes.35 The Guild will be tendering a submission to the Community Affairs Committee which will ‘focus on the practical implications of the proposed changes to the PBS co-payments and safety nets’.36

Medicines Australia While Medicines Australia acknowledged that the co-payment increases may lead to adverse health outcomes due to patients not filling their scripts, it generally welcomes these measures as a way of making the PBS more sustainable.37 In particular, Dr Brendan Shaw, Medicines Australia Chief Executive, applauded the Government’s decision to invest any savings in the Medical Research Future Fund.38

Consumers Health Forum The Consumers Health Forum (CHF) has expressed great concern over the growing out-of-pocket costs that Australians pay for health care and strongly opposes the increases to co-payments and the Safety Net.39 The CHF has also argued that an increase in co-payments will lead to a fall in people filling their prescriptions and has quoted American research that states that when co-payments are raised to $40-$50, people are four to five times more likely to not fill prescriptions compared to when there is no co-payment.40

Public Health Association Australia Michael Moore, the CEO of Public Health Association Australia, has stated that the measures are inequitable and will affect society’s most vulnerable members.41 He argues that ‘the people to whom this is most important are the vulnerable, such as Aboriginals and Torres Straight Islanders, people from low socio-economic backgrounds or from non-English speaking backgrounds and the elderly’.42

30. Ibid. 31. Ibid., pp. 24-25. 32. C King, Abbott’s $1.3 billion tax hike on pharmaceuticals, media release, 18 June 2014, accessed 29 June 2014. 33. Ibid. 34. Ibid. 35. M Lam, ‘Industry breathes a sigh of relief’, Pharma in Focus, 14 May 2014; S Parnell, ‘Coalition highlights healthy payments’, The Australian,

16 May 2014, p. 4, accessed 29 June 2014. 36. M Lam, ‘Senate slows down PBS co-pay Bill’, Pharma in Focus, 26 June 2014, accessed 26 June 2014. 37. Medicines Australia, Government recognises value of PBS and vaccines in Federal Budget, media release, 13 May 2014, accessed 29 June 2014. 38. Ibid. 39. Consumers Health Forum of Australia, Analysis of the 2013-14 Federal Budget, May 2013, pp. 2-3, accessed 29 June 2014; M Lam, ‘Senate

slows down PBS co-pay Bill’, op. cit. 40. M Lam, ‘Senate slows down PBS co-pay Bill’, op. cit. 41. Ibid. 42. Ibid.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 7

Financial implications The Explanatory Memorandum to the Bill states that these changes are expected to deliver savings of $1.3 billion over four years.43

Key issues A number of these issues were previously raised in the Parliamentary Library's 2014-15 Budget Review publication.44

Impact on consumers The underlying issue with price increases is the impact it has on consumer’s access to medicines. In 2012-13, consumers contributed $1,495.4 million for PBS medicines.45 Australia’s co-payments are already fairly high and recent statistics show that people are already deferring filling their prescriptions because of the cost, especially in disadvantaged areas.46 In particular, the Australian Institute of Health and Welfare recently reported that in 2011-12, 9.6 per cent of Australians reported delaying or not getting a prescription filled in the previous 12 months due to cost.47

The Minister stated in his second reading speech that ‘the increase in the general co-payment will not affect the cost to consumers for many commonly used medicines’.48 This is due to 34 of the top 50 PBS drugs by volume, such as statins, costing less than the co-payment amount and being paid for by patients without any government contribution.49 Therefore changes to the co-payment will not affect the price consumers currently pay for these medicines. The changes will however lead to over half the drugs listed on the PBS being priced below the co-payment:

Medicines priced at less than the general co-payment already account for more than 40 per cent of PBS listings, and over 70 per cent of general patient PBS prescriptions. By the time the co-payment changes come into effect, more than 55 per cent of listings are expected to be below the general co-payment amount. These listings include medicines used to treat high blood pressure, high cholesterol, type 2 diabetes, gastric ulceration, and skin conditions.

50

The 15 per cent increase in medicines falling under the co-payment equates to around five million scripts.51 While this will generate savings of $1.3 billion over four years, this is fairly insignificant when compared with the total cost of PBS expenditure (in 2012-13 it was $9.0 billion)52 and the impact it will have on patients. Increases to both co-payments and the safety net mean that not only are consumers required to pay a higher cost before the safety net applies; the period for which they are covered by the safety net is significantly shorter or in some cases non-existent. This particularly affects concessional card holders, who account for 78.5 per cent of the Government’s PBS expenditure.53 Recent research released by the University of Sydney Family Medicine Research Centre has stated that the actual cost increases for medicines will be higher for concessional patients, particularly the elderly.54

43. Explanatory Memorandum, National Health Amendment (Pharmaceutical Benefits) Bill 2014, op. cit., p. 1. 44. L Ferris, ‘Pharmaceutical Benefits Scheme’, op. cit., p. 85. 45. Department of Health, Expenditure and prescriptions twelve months to 30 June 2013, Pharmaceutical Policy Branch, 30 June 2013, p. v, accessed 30 June 2014.

46. Australian Bureau of Statistics (ABS), Health services: use and patient experience, cat. no. 4102.0, ABS, Canberra, 2011, accessed 29 June 2014. 47. Australian Institute of Health and Welfare (AIHW), Australia’s health 2014, Australia’s Health Series, 14, AIHW, Canberra, 25 June 2014, p. 365, accessed 29 June 2014. 48. P Dutton, ‘Second reading speech: National Health Amendment (Pharmaceutical Benefits) Bill 2014’, House of Representatives, Debates,

18 June 2014, p. 7, accessed 29 June 2014. 49. PharmaDispatch, Co-pays and listings the focus of Senate Estimates, 2 June 2014, accessed 29 June 2014. 50. P Dutton, ‘Second reading speech: National Health Amendment (Pharmaceutical Benefits) Bill 2014’, op. cit., p. 7. 51. PharmaDispatch, Co-pays and listings the focus of Senate Estimates, op. cit. 52. Department of Health, Expenditure and prescriptions twelve months to 30 June 2013, op. cit. 53. Ibid. 54. C Bayram , H Britt, C Harrison and G Miller, ‘Byte from BEACH: estimated impact of proposed GP, pathology and imaging co-payments for

Medicare services, and the increased PBS threshold’, Family Medicine Research Centre, Sydney School of Public Health, July 2014, p. 9, accessed 9 July 2014.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 8

Not only does a delay or inability to fill scripts significantly impact the health of the individuals themselves, it could be expected to lead to higher healthcare costs due to increased hospitalisations.55 If the cost of medicines continues to increase, some Australians will no longer have timely access to the medicines they need at a cost they can afford to pay—one of the core objectives of the National Medicines Policy.56

New listings In introducing the increased patient contributions, the Minister announced that ‘savings will contribute to the $20 billion capital-protected Medical Research Future Fund’.57 Medicines Australia has shown enthusiastic support for this proposal.58

However, the Government has stated that increased patient contributions will keep the PBS sustainable and allow for new medicines to be listed. It is unclear how this will occur if all savings are to be invested in the Fund.59

Alternate measures The suggestion to increase co-payments and Safety Nets was only one of the recommendations proposed by the Commission of Audit with respect to the PBS. Other recommendations included capping the cost of the PBS to control expenditure, establishing a new independent authority which would take over the role of the Pharmaceutical Benefits Advisory Committee, and opening up the pharmacy sector to competition, including through the deregulation of ownership and location rules.60 While these reforms would have resulted in significant savings to the PBS, it is expected that they would have been strongly opposed by industry stakeholders.

Phillip Clarke, Professor of Public Health at the University of Melbourne, has argued that the Government would have saved significantly more by changes to pricing arrangements, including reducing the cost of generic medicines.61 He states that it will be ‘consumers, particularly those with chronic diseases, rather than the pharmaceutical industry or pharmacists that will feel the pain from these budget measures’.62

Main Provisions The Bill contains five schedules, each commencing at different times. The different commencement dates are to ensure that the increases to the Safety Net amounts are staggered over the four year period 2015—2019.

Increasing the co-payment amounts Item 3 of Schedule 1 of the Bill repeals and replaces subsection 99G(2) of the Act. The effect of new paragraphs 99G(2)(a) and 99G(2)(b) is to increase the co-payment for general patients by $5.00 and the co-payment for concessional card holders by $0.80 beginning on 1 January 2015. These amounts are to apply in addition to the usual annual CPI adjustment which occurs on 1 January each year.

Item 2 of Schedule 2 of the Bill repeals and replaces paragraphs 99G(2)(a) and (b) with new paragraph 99G(2)(a). This amendment will commence on 1 January 2016. The effect of this amendment is to ensure that the co-payment amounts only increase with the CPI for each subsequent year from 1 January 2016.

Increasing the Safety Net amounts ‘Concessional beneficiary safety net’ is currently defined in section 99F to mean an amount worked out by multiplying the concessional beneficiary charge ($4.60) by 60. Item 1 of Schedule 1 of the Bill amends section 99F of the Act to change the definition to refer to ‘62’, rather than ‘60’. Items 1 of Schedules 2, 3 and 4 amend this definition to read ‘64’, ‘66’ and ‘68’ respectively. The effect is that the number of prescriptions required to reach the safety net will increase by two prescriptions per year:

55. Consumers Health Forum of Australia, Analysis of the 2013-14 Federal Budget, op. cit., pp. 2-3. 56. Department of Health and Ageing (DoHA), National medicines policy: 2000, DoHA, 2000, p. 1, accessed 30 June 2014. 57. P Dutton, ‘Second reading speech: National Health Amendment (Pharmaceutical Benefits) Bill 2014’, op. cit., p. 8. 58. Medicines Australia, Government recognises value of PBS and vaccines in Federal Budget, op. cit. 59. Australian Government, Budget 2014-15: Health, 13 May 2014, p. 11, accessed 29 June 2014. 60. National Commission of Audit, Towards responsible government: phase one, op. cit., p. 113. 61. P Clarke,’ Federal budget 2014: health experts react’, The Conversation, 13 May 2014, accessed 29 June 2014. 62. Ibid.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 9

• on 1 January 2015, from 60 to 62 prescriptions

• on 1 January 2016, from 62 to 64 prescriptions

• on 1 January 2017,from 64 to 66 prescriptions and

• on 1 January 2018, from 66 to 68 prescriptions.

Item 3 of Schedule 1 of the Bill repeals and replaces subsection 99G(2). The effect of new paragraph 99G(2)(c) is to increase the Safety Net for general patients by ten percent. Item 1 of Schedule 5 repeals and replaces subsection 99G(2). The effect is that on January 2019 the ten per cent annual increase in the indexed general patient safety net will cease.

Items 2, 4, 5 and 6 of Schedule 1 are technical consequential amendments, to replace references to ‘indexed’ with ‘substituted’ to ensure that the non-indexation increases to the co-payment and Safety Net amounts are take into account when those amounts are indexed on 1 January each year.

Concluding comments These measures will have a significant impact on patients, particularly those who will also be affected by proposed budgetary changes to social security arrangements and the introduction of a Medicare co-payment. It will be interesting to see the Government’s response to the Human Rights Committee’s request for further information on what impact these changes will have on consumers. It is hard to see how these changes are necessary when the savings achieved are minimal to the overall PBS expenditure and will not be reinvested into improving consumers’ access to medicines.

Warning: All viewers of this digest are advised to visit the disclaimer appearing at the end of this document. The disclaimer sets out the status and purpose of the digest. National Health Amendment (Pharmaceutical Benefits) Bill 2014 10

© Commonwealth of Australia

Creative Commons

With the exception of the Commonwealth Coat of Arms, and to the extent that copyright subsists in a third party, this publication, its logo and front page design are licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia licence.

In essence, you are free to copy and communicate this work in its current form for all non-commercial purposes, as long as you attribute the work to the author and abide by the other licence terms. The work cannot be adapted or modified in any way. Content from this publication should be attributed in the following way: Author(s), Title of publication, Series Name and No, Publisher, Date.

To the extent that copyright subsists in third party quotes it remains with the original owner and permission may be required to reuse the material.

Inquiries regarding the licence and any use of the publication are welcome to webmanager@aph.gov.au.

Disclaimer: Bills Digests are prepared to support the work of the Australian Parliament. They are produced under time and resource constraints and aim to be available in time for debate in the Chambers. The views expressed in Bills Digests do not reflect an official position of the Australian Parliamentary Library, nor do they constitute professional legal opinion. Bills Digests reflect the relevant legislation as introduced and do not canvass subsequent amendments or developments. Other sources should be consulted to determine the official status of the Bill.

Any concerns or complaints should be directed to the Parliamentary Librarian. Parliamentary Library staff are available to discuss the contents of publications with Senators and Members and their staff. To access this service, clients may contact the author or the Library‘s Central Entry Point for referral.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.