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Friday, 20 March 1987
Page: 1050


Senator GARETH EVANS (Minister for Resources and Energy)(9.05) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

The Bill before the Senate contains a number of amendments to the National Health Act which affect the pharmaceutical benefits scheme's net and special patient contribution arrangements.

In addition, the Bill includes a provision which will give the Secretary of the Department of Health the authority to make arrangements for advance payments to pharmacists if for any reason it it not possible to meet the accepted period of thirty days for the payment of pharmacists' claims.

Honourable senators will recall the significant changes which were made to the pharmaceutical benefits scheme on 1 November 1986. The most important aspect of these changes was the introduction of the safety net for those most in need who have to purchase large numbers of prescription drugs. These changes ensured that no individual or family would have to pay for more than 25 PBS prescription items in any one year.

Already 10,500 entitlement cards have been issued which provide free pharmaceutical benefits for more than 25,000 Australians.

The introduction of the new PBS arrangements have been widely accepted by the public and pharmacists alike and with the exception of criticisms from a few opposition members, are widely recognised as both cost-efficient and directing resources to those most in need.

During the introduction of the new scheme, one or two minor problems have been identified and the Bill now before the Senate proposes a number of amendments, mainly of a machinery nature, to address these issues.

The current arrangements only allow a prescription to be counted towards the safety net if the maximum quantity of the drug is prescribed by the doctor and dispensed by the pharmacist. In two cases these arrangements have been found to be unsatisfactory. Both of these are dealt with in clause 4 of the Bill.

In the first case, the amendment enables a prescription to be counted towards the safety net threshold when the maximum quantity of the drug changes between the time the prescription is written and when the drug is dispensed.

Honourable senators will appreciate that this will occur relatively infrequently but it is a necessary provision to protect those people who, for example, have a number of repeat prescriptions for a particular drug which has its maximum quantity increased on recommendation of the pharmaceutical benefits advisory committee before all those repeats are filled.

The second case is to allow prescriptions for less than the maximum quantities of dangerous or addictive drugs to also be counted towards the safety net threshold. I am sure all senators will agree that this is a sensible amendment which is in keeping with the spirit of the government's present drug initiatives. As a result of this amendment patients will not be disadvantaged where, in particular cases, doctors feel it necessary or appropriate to prescribe a smaller quantity of a dangerous or addictive drug.

The minister will be empowered to determine the items to which this provision applies and the minister for health will be seeking advice from the appropriate professional bodies as to which drugs should be included on the list.

Clause 5 of the Bill removes the requirement for pharmacists and others who issue entitlement cards, to retain the supporting documentation for 12 months. In its place is a requirement that the documentation be sent to the secretary of the Department of Health within one month of issuing the card. This provision will clearly benefit pharmacists as they will no longer have to retain supporting documentation for extended periods and it will of course substantially improve the capacity of the department to audit the issue of entitlement cards in a more timely fashion.

At the present time the payment of $3.75 to pharmacists and others who issue entitlement cards on behalf of the Commonwealth is a charge against the administrative vote of the Department of Health. As this is a cost directly attributable to the pharmaceutical benefits scheme it is considered more appropriate that this cost is allocated under Part VII of the National Health Act.

Clause 6 affects this change and also includes the requirement for the Minister to seek agreement with the Pharmacy Guild of Australia in the determination of the level of the fee.

Clause 8 of the Bill is a technical amendment relating to the special patient contributions arrangements under the pharmaceutical benefits scheme. There are at present three drugs subject to the special patient contribution provisions which allow for the payment of an additional charge by the patient when the drug's manufacturer disputes the price determined by the Pharmaceutical Pricing Bureau.

Under the present arrangements, if prescriptions for any quantity in excess of a maximum were authorised, either the Commonwealth would be required to reimburse the pharmacist at the manufacturer's selling price for all quantities in excess of a maximum or the pharmacist would have to absorb the additional special patient contributions.

This clause provides a formula for the calculation of a pro-rata special patient contribution to overcome these problems.

Clause 11 provides for the insertion of a new section 99AB into the National Health Act to provide the secretary of the Department of Health with the authority to make advance payments to approved pharmacists, approved medical practitioners and approved hospital authorities.

In reimbursing pharmacists for claims lodged under the National Health Scheme, payment can only be made in accordance with section 99 of the Act which requires payments to be calculated on the price of drugs in force at the date that they were dispensed. The only way of correctly determining the relevant drug price is to process all prescriptions fully.

During the past two years a number of factors, including repetition strain injury, has resulted in some difficulties processing pharmaceutical claims within the period of thirty days. To minimise the financial impact of these delays in processing claims the department made advance payments based on statistical calculation of the value of a pharmacist's claim. Claims paid in this manner were to be subject to full processing when resources became available in order to determine the correct entitlement due.

In examining the methods the department had available to it to reprocess claims paid by the advance payment method, legal advice was sought from the Attorney-General's department. That advice indicated that the department had no power under section 99 of the National Health Act to make such payments and accordingly the system of advance payments ceased immediately. The Auditor-General was immediately advised and he will comment on this aspect of the department's administration in his March report to the Parliament.

In addition to the changes to the pharmaceutical benefits scheme, the Bill contains a minor amendment to alter the definition of `basic private table'.

Under the current definition, gap benefits are only payable in respect of services which are performed while a person is an in-patient of a hospital. This clearly disadvantages those people who have pathology specimens taken while they are in-patients but not analysed until after they are discharged. Clause 4 of the Bill overcomes this anomaly by making these pathology tests eligible for inclusion in the calculation of gap benefits.

I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.