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Tuesday, 30 August 1994
Page: 592


Senator PATTERSON (5.01 p.m.) —Normally Senator John Herron would be taking the Human Services and Health Legislation Amendment Bill (No. 2) through the Senate on behalf of the coalition. It is appropriate to put on the public record that he is not here to do that because he is using his medical skills in Rwanda to assist the people in that area. It is a great credit to this Senate that we have someone who has those skills and is able to use them in this way. I am very proud, especially as a senator from this side of the house, that Senator Herron has seen fit to offer his services in that way.

  The Human Services and Health Legislation Amendment Bill (No. 2) 1994 makes amendments to a number of acts within the human services and health portfolio. It proposes amendments to the Health Insurance Act 1973, the Health Legislation Amendment Act 1986, the Hearing Services Act 1991, the National Health Act 1953 and the National Health Amendment Act (No. 2) 1993. The amendments are largely of a minor procedural nature and are aimed at rectifying a number of drafting anomalies which have arisen. I have often stated in this chamber that we spend a considerable amount of our time here fixing up drafting anomalies and it is something which should not happen as often as it does.

  The coalition will not be opposing the legislation. There are three main parts to the bill. Firstly, it tightens control over pathology services in terms of both supervision and locations. Secondly, it allows a level of Medicare benefits to be set by regulation without reprinting in the schedule of the act. Thirdly, in relation to pharmaceutical benefits, it restricts the eligibility of persons to safety net concession cards for pharmaceutical benefits and provides for brand substitution by pharmacists of drugs or medication prescribed by doctors in certain circumstances.

  The opportunity has been taken also to make a technical amendment to section 4(1AA) of the National Health Act 1953 in relation to the rendering of a pathology service in a hospital or day hospital facility, substituting the term `patient' for`in-patient' wherever it occurs. The amendment removes an anomaly that exists currently in the act. The pathology amendments correct anomalies and they clarify the supervision definition for the rendering of pathology services. They restate the original intention of the pathology licensed centre collection scheme and remove the redundant references to temporary pathology collection centres, since these licences ceased to exist on 1 January 1994.

  The bill deals with the supervision of pathology services. The Health Insurance Act 1973 provides the legislative basis for the payment and administration of Medicare benefits in relation to medical and hospital services. These proposed amendments seek to tighten control over pathology services by defining the meaning of supervision. Medicare benefits are payable only if the services are performed or given on behalf of an approved pathology practitioner. The proposed amendments dictate that a pathology service will not attract the Medicare benefit unless the pathologist has arranged proper supervision of that service.

  Proposed section 3AA(3) states that proper supervision has been arranged if the approved pathology practitioner ensures that a properly qualified person supervisors the rendering of the service and has personal responsibility for the proper rendering of that service. The purpose of proposed section 3AA is to enable the minister to provide for the definition of adequate supervision of pathology services rendered by or on behalf of an approved pathology practitioner. The question of whether proper supervision is provided is to be decided in accordance with the written principles which will be determined by the minister. According to the explanatory memorandum:

The intention is that these principles will be modelled upon National Pathology Accreditation Advisory Council standards and applied using currently accepted practice for the approving of premises as accredited pathology laboratories. New subsection 3AA(5) provides for the determination of the principles to be a disallowable instrument.

  Another area covered by this bill is the location of pathology centres. The second area of tightened control is in relation, as I said, to the location of collection centres for approved pathology authorities. The bill replaces the existing section 23DNB with a new section 23DNB which incorporates and adds to the old section. Again, the explanatory memorandum notes:

. . . to allow the Minister to act to alleviate hardship caused by the commercial decisions of pathology practices in locating their collection centres.

Proposed section 23DNB(3) provides that the minister must determine in writing the principles with which she must comply in performing her duties under that section. The bill provides that these principles must include a formula or other method for allocating entitlements, the circumstances and method for varying an allocation, and the number and location of collection centres that can be operated under the entitlement.

  There is a great deal of concern in Australia about the access of people in rural and isolated areas to a fair and equitable health system. When this bill was debated in the House of Representatives, the coalition sought an undertaking from the government that the minister would act to alleviate the hardship caused by the commercial decisions of pathology practices in locating their collection centres. Dr Theophanous, the Parliamentary Secretary to the Minister for Human Services and Health, has given an undertaking that the principles will address the need for collection centres in rural and isolated Australia to allow fair access by people living in remote areas and that the government will develop the determination in consultation with the profession. I reiterate the call from the Senate that Dr Theophanous and Dr Carmen Lawrence ensure that these issues are addressed and that people in rural and isolated areas are not disadvantaged by any of these changes.

  Currently, I understand the proposal is that provision should be made for the use of the allocation in operating licences on a one for three basis in rural and remote statistical local areas, as defined by `rural other' and `remote other' in the January 1994 Department of Human Services and Health publication entitled Rural/remote areas classification. The coalition accepts the government assurances on this matter, but it is also aware that, as a disallowable instrument, the minister's determination is subject to tabling and disallowance so the parliament will have an opportunity to examine the matter in detail at that later stage.

  The second main thrust of the bill concerns the table of fees. The level of Medicare benefit which is payable for a particular service is calculated on the basis of a lengthy table of fees. The purpose of the amendments to section 3(1), sections 4 and 4A and schedules 1 and 1A of the Health Insurance Act 1973—the act—is to avoid the need to reprint the lengthy schedules in reprints of the act, as the content of the schedules is printed regularly in the form of regulations under the act which annually provide for the making of, or amend, the general medical services table and the pathology services table.

  Prior to these proposed amendments, the relevant tables were in the schedules to the act. Schedule 1 related to general medical services and schedule 1A related to pathology services. The bill omits the provisions requiring the tables to appear in the schedules to the act. Instead, the bill provides that the level of Medicare benefits will be set by regulation alone.

  The third main thrust of this bill is in the area of pharmaceutical benefits. It makes two changes to the legislation governing the pharmaceutical benefits scheme. The first gives effect to the decision announced in the 1994-95 budget to restrict the issue of safety net concession cards to persons eligible for Medicare benefits.

  The proposed amendments relate to the National Health Act 1953, which establishes the pharmaceutical benefits scheme and ensures that pharmaceuticals are provided to the general public at a maximum of $16 per item. Where an individual or family spends more on pharmaceuticals than the safety net figure of $400 a year, any further prescriptions are provided at a reduced rate.

  It ought to be noted here that this was not widely publicised. A member of my family was quite surprised when she got to the $300 limit and thought that she was now going to get her pharmaceutical benefits at the reduced rate only to find that the limit was going to be $400. So the government is very good at singing its praises about the good news but it is not so keen to actually notify people about something that is of concern to them but which the government would rather them not know quite so much detail about.

  The scheme also provides safety net concession cards for some patients, including pensioners, the unemployed, low income families, veterans, and war widows and their dependants. Eligible recipients pay $2.60 per prescription until their annual expenditure reaches $135.20. After this safety net level has been reached, pharmaceuticals are provided at no cost to the cardholder.

  The bill proposes an amendment to ensure that the safety net concession cards will be available only to people who are eligible to receive Medicare benefits. Such eligibility to receive Medicare benefits is generally extended to Australian residents and certain members of diplomatic missions. The restriction of the safety net concession card to Australian residents is estimated to result in a savings of $0.4 million in 1994-95 and $1 million in subsequent years.

  The Pharmacy Guild of Australia has expressed concern at the lack of reimbursement for the extra workload imposed on pharmacists by this bill. The guild argues that under the new legislation, as an additional step, pharmacists will be required to sight the Medicare card, to transcribe the Medicare number and to forward details to the HIC for eligibility. The Pharmacy Guild is concerned that pharmacists will also have to explain to patients why concession cards have been denied and try to recover from patients the difference between the concession and the non-concession prescription cost. Alternatively, the pharmacists will have to charge non-concession prices and then refund the difference when cards are validated. Dr Theophanous in his second reading speech stated:

It is not up to pharmacists to police Medicare details. When patients go to have a prescription filled out, it is their duty to declare whether they have validity under the Medicare arrangements, as they do now when applying for a safety net card. I do not think it is going to lead to a significant increase in the work done by pharmacists.

Time will tell, but the pharmacists have said one thing and the government has said another.

  The second change to the legislation governing the pharmaceutical benefits scheme permits brand substitution by pharmacists, subject to conditions agreed to by the Australian health ministers conference. The main proposal is to amend the National Health Act 1953 so as to allow pharmacists to supply a substituted drug or medication that is marketed under a different name from the drug or medication specified in the prescription written by the doctor.

  The aim of the proposed amendment is to allow the pharmacist to substitute a generic product for a branded one, which will mean that in many instances it will be cheaper for the patient. This can occur only when the patent for the branded product has run out and generics are being manufactured. When a branded product is prescribed, the patient is required to pay a premium for the product, which on average is between 50c and $1. There can be a definite preference by individuals for a product with which they are familiar.

  The substitution will be allowed only in the following circumstances: firstly, if the prescription does not indicate that only the specified branded drug or medication is to be supplied; secondly, if a schedule of pharmaceutical benefits issued by the department states that the two drugs or medications are equivalent; thirdly, if a ministerial determination allowing the substituted generic drug or medication to be marketed under a particular brand name is in force; and, fourthly, if the supply of the substituted brand is not prohibited under state or territory law. This change has resulted from an agreement between state and Commonwealth health ministers concerning rules under which pharmacists dispense medication.

  The proposed changes have been supported by the Pharmacy Guild of Australia. The Pharmaceutical Society of Australia has stated that the bill's proposals do not appear likely to have any significant impact on the pharmacy profession.

  However, the Australian Pharmaceutical Manufacturers Association has expressed concern about two issues in the legislation. The first concern is with the term `equivalent'. One of the conditions required to be met before substitution can occur is that:

the Schedule of Pharmaceutical Benefits issued by the Department states that the specific benefit and the substitute benefit are equivalent.

The current practice is for the department to identify products where brands have demonstrated bio-equivalence to the satisfaction of the TGA, the Therapeutic Goods Administration, through the addition of an appropriate identifier in the pharmaceutical benefits schedule. The Australian Pharmaceutical Manufacturers Association has argued that the use of `equivalence' has a much broader meaning than `bio-equivalence'.

  The second concern of the Australian Pharmaceutical Manufacturers Association is related to co-marketed products. There are a number of instances where the same pharmaceutical product is marketed as two or more separate and distinct brands with separate marketing and PBS listing approvals, co-marketed by competing pharmaceutical companies. The Australian Pharmaceutical Manufacturers Association is concerned that the legislation as currently drafted could allow pharmacists to substitute one brand of such products for another, even though consumer premiums under the minimum pricing policy, which the amendments are intended to allow consumers to avoid if they so choose, are not charged in such cases.

  Despite these concerns the coalition does not oppose the bill but notes the need to monitor the operation of the new provisions to ensure that the sorts of concerns expressed by the Australian Pharmaceutical Manufacturers Association are not forthcoming and that pharmacists are not given an additional load, as they claim. Indeed, we will be watching that closely and discussing it with those professions to ensure that this does not happen and that the system works as intended.