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National Health Amendment (Pharmaceutical and Other Benefits—Cost Recovery) Bill 2009

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2008

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL AND OTHER BENEFITS - COST RECOVERY) BILL 2008

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Ageing,

the Honourable Nicola Roxon MP)



 

 



NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL AND OTHER BENEFITS - COST RECOVERY) BILL 2008

 

OUTLINE

 

The purpose of the Bill is to amend the National Health Act 1953 (the Act) to enable regulations to be made with respect to services provided by the Commonwealth associated with the exercise of powers by the Minister for the Pharmaceutical Benefits Scheme (PBS) (under Part VII of the Act) and the National Immunisation Program (NIP) (under section 9B of the Act).

 

While the Bill provides for a commencement date of 1 July 2008, the cost recovery regime cannot commence until the subordinate regulations are made by the Governor-General.  The commencement date for the charging of fees will be contained in the regulations which are subject to parliamentary scrutiny and disallowance. 

 

The Bill provides that the regulations may include prescription of fees payable in relation to those services provided by the Commonwealth such as the making of declarations, determinations, agreements and arrangements.

 

Services provided by the Commonwealth in relation to the exercise of those powers by the Minister include the performance of functions by the Pharmaceutical Benefits Advisory Committee (PBAC) and its subcommittees, the Pharmaceutical Benefits Pricing Authority, and related services performed by Departmental officers, contractors and sub-contractors.  

 

The regulations will provide for recovery of relevant fees from persons (including pharmaceutical companies) who make an application or submission for services associated with new, and changes to existing, listings on the PBS or with vaccines designated under section 9B of the Act.

 

The regulations will set out the fees that are payable for the relevant services provided by the Commonwealth and designate the time and manner of payment, and consequences for failure to pay the fee.  The Bill empowers the Minister to refuse to exercise powers under section 9B or Part VII of the Act until a fee is paid.

 

FINANCIAL IMPACT STATEMENT

 

Revenue from fees representing the cost recovery of the relevant services will depend on the number and type of submissions brought to the PBAC for consideration.  Fees are expected to be around $14 million per year in the first full financial year of operations. However, revenue estimates cannot be finalised until a commencement date is determined.  

 



NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL AND OTHER BENEFITS - COST RECOVERY) BILL 2008

 

NOTES ON CLAUSES

 

Clause 1: Short title

This clause is a formal provision specifying the short title of the Bill.

 

Clause 2: Commencement

Sections 1 to 3 will commence on the day on which the Bill receives Royal Assent.  Schedule 1 will commence on 1 July 2008.  Submissions received by PBAC following the making of regulations under the amended Act will be subject to the prescribed cost recovery arrangement.   

 

Clause 3: Schedule

This clause provides that each Act specified in a Schedule to the Bill is amended as specified, and any other item has effect according to its terms.

 

Schedule 1 - Cost recovery

Schedule 1 contains the amendment to the Act which gives effect to the proposed cost recovery arrangements. 

 

Item 1

This item inserts a new Division 4C after Division 4B of Part VII.  It comprises three Subdivisions - A, B and C.

 

DIVISION 4C - COST RECOVERY

 

Subdivision A - Preliminary

 

Section 99YB: What this Division is about

This section explains that:

  • Division 4C enables the charging of fees for certain services provided by the Commonwealth.  The fees may only be charged where the service provided by the Commonwealth relates to the exercise of certain powers by the Minister under the Act; 
  • Subdivision B provides for the making of regulations to prescribe fees payable for those services and some other matters relating to payment of the fees, including some consequences of failure to pay the fees.  It is intended that the fees be recovered from persons (including pharmaceutical companies) who make an application or submissions for services associated with new, and changes to existing, listings on the PBS or with vaccines designated under section 9B of the Act; and 
  • Subdivision C provides further powers to the Minister if fees are not paid.  

 

Subdivision B - Payment of fees etc. for certain services

 

Section 99YBA: Payment of fees etc. for certain services

Subsection 99YBA(1) enables the making of regulations concerning the provision of services by the Commonwealth in relation to the exercise of powers by the Minister under section 9B or Part VII of the Act.  

The powers that may be exercised by the Minister under Part VII of the Act (which provides for the PBS include making various declarations, determinations, agreements and arrangements in relation to drugs and medicinal preparations and special pharmaceutical products).  The powers that may be exercised by the Minister under section 9B of the Act include determining that a specified vaccine is a “designated vaccine”, and that it may be provided in specified circumstances (including for the NIP).

 

Services provided by the Commonwealth in relation to the exercise of those powers by the Minister include performance by the PBAC, and its subcommittees, of its functions under the Act.  Those functions include making recommendations and giving advice associated with new, and changes to existing, listings on the PBS and with vaccines designated on the NIP.

 

Other relevant services provided by the Commonwealth include evaluation and pricing activities by the Pharmaceutical Benefits Pricing Authority, departmental officers and contractors associated with pharmaceutical benefits and special pharmaceutical products and the designation of vaccines.

 

Subsection 99YBA(2) makes provision for regulations about some specific matters without limiting the generality of the regulation-making power provided in subsection 99YBA(1).  It states that the regulations may make provision for the making of applications for the relevant services provided by the Commonwealth, the prescribing of fees for those services, time and manner of payment of the prescribed fees, penalties for late payment, fee waivers and exemptions, refusal of services until fees are paid, and review of decisions made under the regulations.  

 

Subsection 99YBA(3) provides that a prescribed fee must not be such as to amount to taxation.

 

Subsections 99YBA(4) and (5) provide that a prescribed fee is payable to, and may be recovered as a debt due to, the Commonwealth.

 

Subdivision C - Consequences if fees not paid

 

Section 99YBB: Minister may refuse to exercise certain powers if prescribed fees not paid

This section provides that the Minister may refuse to exercise certain powers under section 9B or Part VII if fees are not paid.  If a person has not paid a fee prescribed under paragraph 99YBA(2)(b), the Minister may refuse to exercise a power in relation to any service that is referred to in subsection 99YBA(1) that the person has applied for.  The provision makes it clear that existing powers of the Minister under section 9B or Part VII of the Act are not affected by the operation of this new section.

 

Subsection 99YBB(2) confirms for the assistance of readers that any refusal to exercise a power referred to in subsection 99YBB(1) is not a legislative instrument.