2022-2023

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

NATIONAL HEALTH AMENDMENT (EFFECT OF PROSECUTION - APPROVED PHARMACIST CORPORATIONS) BILL 2023

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Health and Aged Care,

the Hon Mark Butler MP)

 

 

NATIONAL HEALTH AMENDMENT (EFFECT OF PROSECUTION - APPROVED PHARMACIST CORPORATIONS) BILL 2023

 

OUTLINE

The Pharmaceutical Benefits Scheme (PBS) provides Australians with timely, reliable and affordable access to necessary and cost-effective medicines. The PBS is governed by Part VII of the National Health Act 1953 (the Act).

Section 90 of the Act provides for the Secretary of the Department of Health and Aged Care (the Department) or their delegate to approve a pharmacist to supply pharmaceutical benefits at particular premises. An approved pharmacist can then, in accordance with the Act and legislative instruments made under the Act, make claims for payment from the Commonwealth in relation to the supply of pharmaceutical benefits. An approval to supply pharmaceutical benefits can be held by a pharmacist as an individual or a body corporate.

Section 133 of the Act deals with the effect of prosecution for an offence relating to the supply of pharmaceutical benefits. Subsection 133(1) of the Act provides for the Secretary of the Department or their delegate to suspend an approved pharmacist’s approval to supply pharmaceutical benefits where the approval is held by a pharmacist who is charged with a PBS related offence. Subsection 133(2) of the Act provides for the Minister for Health and Aged Care (the Minister) or their delegate, to suspend, further suspend or revoke a pharmacist’s approval to supply pharmaceutical benefits where the approval is held by a pharmacist who is convicted of a PBS related offence (or if the charge is proved but does not result in a conviction and the court discharges the person without proceeding to conviction). Currently, section 133 only applies in relation to an approved pharmacist who is an individual. If that same pharmacist who is prosecuted for a PBS related offence operates under a company structure, there is no ability for their approval to be suspended or revoked.  

The National Health Amendment (Effect of Prosecutions - Approved Pharmacist Corporations) Bill 2023 (the Bill) amends section 133 of the Act to ensure that the provision more effectively serves a protective and deterrent purpose by protecting the PBS from abuse following the charging or conviction of an approved pharmacist for a PBS related offence (i.e. an offence arising out of or in connection with the supply of pharmaceutical benefits under Part VII of the Act), regardless of whether the approved pharmacist is an individual or a body corporate .

The amendments in Schedule 1 to the Bill will enable the Secretary or their delegate to suspend an approved pharmacist’s approval to supply pharmaceutical benefits where the approval is held by an approved pharmacist corporation and a director is charged with a PBS related offence.

The amendments will also enable the Minister, or their delegate, to suspend, further suspend or revoke an approved pharmacist’s approval to supply PBS medicines where the approval is held by an approved pharmacist corporation and a director is convicted of a PBS related offence (or if the charge is proved but does not result in a conviction and the court discharges the person without proceeding to conviction).

 

 

Financial Impact Statement

 

There are no financial impacts associated with this Bill.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

NATIONAL HEALTH AMENDMENT (EFFECT OF PROSECUTION - APPROVED PHARMACIST CORPORATIONS) BILL 2023

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The purpose of the National Health Amendment (Effect of Prosecution - Approved Pharmacist Corporations) Bill 2023 (the Bill) is to amend section 133 of the National Health Act 1953 (the Act) to ensure the provision more effectively serves a protective and deterrent purpose by protecting the Pharmaceutical Benefits Scheme (PBS) from the risk of fraudulent claims.

 

This Bill addresses a regulatory inconsistency within the Act to ensure that an approval to supply PBS medicines can be suspended or revoked regardless of whether the approval is held by an individual or under a company structure. It ensures that the Secretary has the power under subsection 133(1) of the Act to suspend an approved pharmacist corporation’s approval to supply pharmaceutical benefits if the director of the approved pharmacist corporation is charged with a PBS related offence (i.e. an offence arising out of or in connection with the supply of pharmaceutical benefits under Part VII of the Act).

 

The Bill also ensures that the Minister has the power under subsection 133(2) of the Act to suspend, further suspend or revoke an approved pharmacist corporation’s approval to supply pharmaceutical benefits if the director of the approved pharmacist corporation is convicted of a PBS related offence (or if the charge is proved but does not result in a conviction and the court discharges the person without proceeding to conviction) .

 

Human rights implications

This Bill is compatible with Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Right to Health

Article 12 of the ICESCR promotes the right of all individuals to enjoy the highest attainable standard of physical and mental health. This includes the right to a system of health protection which provides equal opportunity for people to enjoy the highest attainable level of health.

The Bill assists with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health by supporting the integrity of the PBS.

 

The Bill provides a mechanism to strengthen the powers to prevent an approved pharmacist who has been charged with or convicted of a PBS-related offence from continuing to have access to PBS payments and perpetrating further fraud in their capacity as a director of an approved pharmacist corporation. This ensures that pharmaceutical benefits are being supplied and claimed in accordance with the overall purpose and intent of the scheme. Inappropriate PBS practice and fraud increases Commonwealth expenditure on health services and products. By supporting the integrity of the PBS, this means that the PBS remains sustainable and continues to be accessed and enjoyed by the community.

 

Conclusion

This Bill is compatible with human rights as it does not raise any human rights issues. The amendments made by this Bill will have a beneficial impact on human rights though ensuring continued affordability of medicines.

 

The Hon Mark Butler MP, Minister for Health and Aged Care

NATIONAL HEALTH AMENDMENT (EFFECT OF PROSECUTION - APPROVED PHARMACIST CORPORATIONS) BILL 2023

 

Clause 1 - Short Title

Clause 1 provides for the short title of the Act to be the National Health Amendment (Effect of Prosecution - Approved Pharmacist Corporations) Act 2023 .

 

Clause 2 - Commencement

Clause 2 provides that the National Health Amendment (Effect of Prosecution - Approved Pharmacist Corporations) Bill 2023 will commence the day after the Act receives Royal Assent.

 

Clause 3 - Schedule(s)

Clause 3 provides that legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule has effect according to its terms.

 

 

SCHEDULE 1 — AMENDMENTS

 

National Health Act 1953 (the Act)

 

Items 1 to 4

Items 1 to 4 make minor, technical amendments to section 133 of the Act by inserting new headings for existing subsections 133(1), 133(2), 133(5) and 133(6). These new headings describe the relevant subject matter addressed in each subsection.

 

Item 5

Item 5 inserts new subsection 133(6A) after subsection 133(6).

 

New paragraph 133(6A)(a) provides that if a person, being a director of an approved pharmacist corporation , is charged before a court with an offence referred to in subsection 133(1), the approved pharmacist corporation is also regarded to have been charged with the offence referred to in subsection 133(1).

 

The term ‘ approved pharmacist corporation’ is newly defined in section 133(7) and discussed in item 6 below.

 

The reference in new subsection 133(6A) to ‘an offence referred to in subsection (1)’ of section 133 is a reference to an offence that arises out of or is connected with the supply of pharmaceutical benefits under the Pharmaceutical Benefits Scheme (PBS) under Part VII of the Act. The offence can be an offence against the Act, another law of the Commonwealth, a law of a State, a law of an internal Territory, a law of Norfolk Island, a law of the Territory of Cocos (Keeling) Islands or a law of the Territory of Christmas Island. An offence of this kind is referred as a ‘PBS related offence’.

 

New paragraph 133(6A)(a)

New paragraph 133(6A)(a) ensures the Secretary can exercise the discretionary power in subsection 133(1) to suspend an approved pharmacist’s approval to supply pharmaceutical benefits under section 90 of the Act where an approved pharmacist corporation holds the approval and its director/s is charged with a PBS related offence. In these circumstances, the approved pharmacist corporation will also be treated as having been charged with the offence. The approved pharmacist corporation will not be able to rely upon the fact that it is a separate legal entity from its director/s to avoid suspension action under subsection 133(1) of the Act.

 

The Secretary’s powers under subsection 133(1) of the Act are discretionary in nature and decisions are made by reference to the circumstances of each individual case. The principles of natural justice are applied in making such decisions. In making decisions under subsection 133(1), the Secretary will consider factors such as the purpose of section 133 of the Act, which is to protect the PBS from fraudulent claims. Other factors that may be considered include the risk of the director re-offending, the risk to the community’s access to pharmaceutical benefits, and any steps taken by the other director/s of the approved pharmacist corporation to prevent further offences being committed.

 

New paragraph 133(6A)(b)

New paragraph 133(6A)(b) provides that if a person, who is a director of an approved pharmacist corporation , is convicted of an offence, or if the charge in relation to the offence is proved but does not result in a conviction and the court discharges the person without proceeding to conviction, the approved pharmacist corporation is also regarded to have been convicted of the offence for the purposes of subsection 133(2) of the Act.

 

New paragraph 133(6A)(b) ensures the Minister can exercise the discretionary power in subsection 133(2) of the Act to suspend, further suspend or revoke an approved pharmacist’s approval to supply pharmaceutical benefits under section 90 of the Act, where an approved pharmacist corporation holds the approval and a director of the approved pharmacist corporation is convicted of a PBS related offence, or if the charge in relation to the offence is proved but does not result in a conviction and the court discharges the person without proceeding to conviction.

 

In these circumstances, the approved pharmacist corporation will also be treated as having been convicted of the offence. The approved pharmacist corporation will not be able to rely upon the fact that it is a separate legal entity from its directors to avoid suspension or revocation action under subsection 133(2) of the Act.

 

The Minister’s powers under subsection 133(2) of the Act are discretionary in nature and decisions are made by reference to the circumstances of each individual case. The principles of natural justice are applied in making such decisions. In making decisions under subsection 133(2), the Minister will consider factors such as the purpose of section 133 of the Act, which is to protect the PBS from fraudulent clams. Other factors that may be considered include the risk of the director re-offending, the risk to the community’s access to pharmaceutical benefits and any steps taken by the other director/s of the approved pharmacist corporation to prevent further fraud being committed.

 

New paragraph 133(6A)(c)

New paragraph 133(6A)(c) provides that if a director of an approved pharmacist corporation ceases to be an ineligible director (as newly defined in subsection 133(7) and discussed in item 6 below), the approved pharmacist corporation will be treated as having been acquitted of the PBS related offence for the purposes of section 133 of the Act, provided that no other director is an ineligible director at that time. This provision ensures that no action can be taken against an approved pharmacist corporation under subsection 133(1) or subsection 133(2) of the Act if the director has been acquitted of a PBS related offence or has had the charge against them withdrawn or disposed of.

 

Item 5 also makes a minor, technical amendment to section 133 of the Act by inserting the heading ‘Definitions’ above existing subsection 133(7).

 

Item 6

Item 6 amends subsection 133(7) of the Act to insert two new definitions for an ‘approved pharmacist corporation’ and an ‘ineligible director’. These definitions are inserted for the purposes of defining key terms used in new subsection 133(6A) (refer to item 5).

 

The term ‘approved pharmacist corporation’ is defined to mean an approved pharmacist that is a body corporate.

 

The term ‘ineligible director’ is defined to mean a director of an approved pharmacist corporation that has been charged with an offence referred to in subsection 133(1) (i.e. a PBS related offence) and has not been acquitted of the offence (and the charge has not been withdrawn or otherwise disposed of).

 

Item 7

Item 7 is an application provision which states that new subsection 133(6A) of the Act applies on and or after the commencement of this item in relation to a person who is or was a director of an approved pharmacist corporation .

 

The application provision goes on to clarify that the new subsection 133(6A) applies regardless of whether the person is :

(a)        charged before a court with having committed the offence referred to in subsection 133(1); or

(b)        convicted of the offence; or

(c)        discharged conditionally;

before, on or after the commencement of this item.