Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
National Health Amendment (Pharmaceutical Benefits Transparency and Cost Recovery) Bill 2021

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

 

 

 

 

 

2019-2020-2021

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

SENATE

 

 

 

 

 

 

 

 

 

 

 

NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS TRANSPARENCY AND COST RECOVERY) BILL 2021

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

Circulated by authority of the Minister for Health and Aged Care, the Hon Greg Hunt MP





NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS TRANSPARENCY AND COST RECOVERY) BILL 2021

 

OUTLINE

The National Health Amendment (Pharmaceutical Benefits Transparency and Cost Recovery Bill 2021 (the Bill) permits the publication of information and simplifies administrative processes associated with the publication of information and cost recovery arrangements via two separate measures.

The National Health Act 1953 (the Act) makes provision in relation to pharmaceutical, sickness and hospital benefits, and of medical and dental services.

 

1.       Transparency Amendments

Currently information can only be divulged as permitted by section 135A of the Act.  The Department of Health (the Department) currently publishes information in relation to the Pharmaceutical Benefits Advisory Committee (PBAC) and on the Medicine Status Website, by relying on public interest certificates under paragraph 135A(3)(a) of the Act.

 

Since 2019, the Department has consulted extensively with the pharmaceutical industry on the recent transparency reforms developed under the 2017 Strategic Agreement with Medicines Australia, as part of the broader package of PBS process improvements. The new standardised redaction criteria and updated financial ranges for PSDs, were trialled through three separate pilots before being formally implemented in November 2020. Supporting materials which set out the standardised redaction criteria and internal review process, have been updated and published.

 

The most sensitive information which is published by the Department is that included in public summary documents (PSDs) of PBAC considerations, which often contain information the applicant (most often a pharmaceutical company) considers to be sensitive or commercial-in-confidence. The purpose of the PSD is to provide the public with information pertaining to PBAC recommendations to ensure doctors, health professionals and patients are aware of the rationale and evidentiary basis for specific PBAC recommendations. Publication of PSDs is a long standing and well-accepted practice agreed as part of our obligations under the Australian-United States Free Trade Agreement. These obligations are based on transparency principles supporting the release of information regarding the basis of Government decisions for the subsidy of pharmaceuticals to the Australian community. As a result, proposed legislative amendments will not incorporate the standardised redaction criteria for PSDs nor provide for an external appeals mechanism in relation to publication decisions.

 

Amendments to the Act will formalise and legislate current process, provide greater transparency for industry on the publication of information and reduce the administrative burden on the Department.

 

2.       Cost Recovery Amendments

Section 99YBA of the Act provides that regulations may prescribe fees for service. Current cost recovery arrangements including fees for services provided in relation to the PBAC and the Australian Technical Advisory Group on Immunisation are specified in the National Health (Pharmaceuticals and Vaccines - Cost Recovery) Regulations 2009 (the Regulations).

In line with Australian Government Charging Framework, the Regulations are updated annually to ensure they reflect the true efficient costs of providing services, requiring Governor-General Assent and tabling in both houses of Parliament.

 

In November 2020, the Regulations were amended to include fees associated with the management of deeds - a rebate management fee charged within the existing Pricing pathway A, B or C fee and standalone fees for deed variations and deed renewal requests. Deed-related fees commenced on 1 January 2021.

 

As required by the Australian Government Charging Framework, consultation on fee changes is undertaken annually through the Cost Recovery Implementation Statement process.

 

Amendments to the Act allow for fees and other cost recovery arrangements to be included in a disallowable legislative instrument, reducing the administrative burden on the Department. Amendments will also benefit industry as they provide greater transparency by allowing for the separation of the fees associated with entry into, management, variation and renewal of a deed arrangement. Deed related fees could then be charged at the time these costs are incurred by the Commonwealth.

 

Amendments in the bill will:

·          Insert a new subsection into Part VII of the Act to establish the statutory authority for the publication of PBAC agendas, meeting outcomes, public summary documents and the information published on the Medicine Status Website. This includes a regulation making power to allow for subsequent amendments to the National Health (Pharmaceutical Benefits) Regulations 2017, to define the types of information published by the Department.

·          Replace s99YBA of the Act to provide for PBS cost recovery arrangements including specifying fees for services and costs incurred to be set out in a disallowable legislative instrument, replacing the existing regulations. This includes a power to make separate fee categories to recover the costs incurred by the Commonwealth when entering into and managing deeds at the request of an applicant.

·          Make consequential amendments to sections 99YB and 99YBB as a result of the amendments to section 99YBA; and update the wording of s99YBC to remove provisions in relation to the review of cost recovery fees which occurred in 2011.

 

Financial Impact Statement

There is no financial impact for the Commonwealth from 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 (PHARMACEUTICAL BENEFITS TRANSPARENCY AND COST RECOVERY) BILL 2021

 

The National Health Amendment (Pharmaceutical Benefits Transparency and Cost Recovery Bill 2021 (the 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 National Health Amendment (Pharmaceutical Benefits Transparency and Cost Recovery Bill 2021 (the Bill) permits the publication of information and simplifies administrative processes associated with the publication of information and cost recovery arrangements via two separate measures.

 

The National Health Act 1953 (the Act) makes provision in relation to pharmaceutical, sickness and hospital benefits, and of medical and dental services.

 

1.       Transparency Amendments

Currently, information can only be divulged as permitted by section 135A of the Act.  The Department of Health (the Department) currently publishes information in relation to the Pharmaceutical Benefits Advisory Committee and on the Medicine Status Website, by relying on public interest certificates under paragraph 135A(3)(a) of the Act.

 

Since 2019, the Department has consulted extensively with the pharmaceutical industry on the recent transparency reforms developed under the 2017 Strategic Agreement with Medicines Australia, as part of the broader package of PBS process improvements. In addition, the new standardised redaction criteria and updated financial ranges for PSDs, were trialled through three separate pilots before being formally implemented in November 2020. Supporting materials which set out the standardised redaction criteria and internal review process, have been updated and published.

 

Amendments will formalise and legislate current process, support increased transparency on the publication of information and reduce the administrative burden on the Department.

 

2.       Cost Recovery Amendments

Section 99YBA of the Act provides that regulations may prescribe fees for service. Current cost recovery arrangements including fees for service provided in relation to the PBAC and Australian Technical Advisory Group on Immunisation are specified in the National Health (Pharmaceuticals and Vaccines - Cost Recovery) Regulations 2009 (the Regulations).

 

In line with Australian Government Charging Framework, the Regulations are updated annually to ensure they reflect the true efficient costs of providing services, requiring Governor-General Assent and tabling in both houses of Parliament.

 

In November 2020, the Regulations were amended to include fees associated with the management of deeds - a rebate management fee charged within the existing Pricing pathway A, B or C fee and standalone fees for deed variations and deed renewal requests. Deed-related fees commenced on 1 January 2021.

 

As required by the Australian Government Charging Framework, consultation on fee changes is undertaken annually through the Cost Recovery Implementation Statement process.

 

Amendments allow for fees and other cost recovery arrangements to be included in a disallowable legislative instrument, reducing the administrative burden on the Department. Amendments will also benefit industry as they provide greater transparency by allowing for the separation of the fees associated with entry into, management, variation and renewal of a deed arrangement. Deed related fees could then be charged at the time these costs are incurred by the Commonwealth.

 

S pecifically, th e Bill seeks to amend the National Health Act 1953 (the Act) to:

1.       Insert a new subsection into Part VII of the Act to establish the statutory authority for the publication of Pharmaceutical Benefits Advisory Committee (PBAC) agendas, meeting outcomes, public summary documents and the information published on the Medicine Status Website (MSW). This includes a regulation making power to allow for subsequent amendments to the National Health (Pharmaceutical Benefits) Regulations 2017, to define the types of information published by the Department.

2.       Replace s99YBA of the Act to provide for PBS cost recovery arrangements including specifying fees for services and costs incurred to be set out in a disallowable legislative instrument, replacing the existing regulations. This includes a power to make separate fee categories to recover the costs incurred by the Commonwealth when entering into and managing deeds at the request of an applicant.

3.       Make consequential amendments to sections 99YB and 99YBB as a result of the amendments to section 99YBA, and update the wording of s99YBC to remove provisions in relation to the review of cost recovery fees which occurred in 2011.

 

Human rights implications

This Bill engages the following rights:

 

The right to health care

The Bill engages Article 2 and Article 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) by assisting 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.

 

The Pharmaceutical Benefits Scheme (PBS) assists with the promotion of this human right by providing subsidised access to medicines and vaccines for Australians. In addition, providing information on the PBS listing process and allowing the Commonwealth to recover its costs associated with PBS listing and improving the transparency and efficiency of processes, aids in creating a viable and well-functioning PBS. This in turn assists Australians to more easily access necessary medicines which, in turn, promotes the various rights to health in the Conventions.

 

The amendment in relation to the replacement of regulations with rules relates only to machinery of government.  Importantly, the rules will remain disallowable by Parliament, meaning that there is no loss of transparency related to this amendment and no interaction with human rights.

 

The amendment in relation to defining that the Commonwealth may charge for the costs incurred in entering into a deed at the request of an applicant will ensure that the Commonwealth is recovering the cost of performing its duties as requested directly from that applicant, thus assisting the Commonwealth to continue providing subsidised access to medicines and vaccines for Australian citizens. This upholds the right of Australian citizens to enjoy the highest attainable standard of physical and mental health. 

 

The right to privacy and reputation

The Bill engages Article 17 of the International Covenant on Civil and Political Rights (ICCPR) which prohibits unlawful or arbitrary interferences with a person's privacy, family, home and correspondence. It also prohibits unlawful attacks on a person's reputation. It provides that persons have the right to the protection of the law against such interference or attacks.

 

Currently, information can only be divulged as permitted by section 135A of the National Health Act 1953 (the Act). 

 

The Department currently publishes information in relation to the Pharmaceutical Benefits Advisory Committee and on the MSW, by relying on public interest certificates under paragraph 135A(3)(a) of the Act. The most sensitive information which is published by the Department is that included in public summary documents (PSDs) of PBAC considerations, which often contains information the applicant (most often a pharmaceutical company) considers to be sensitive or commercial in confidence.

 

The amendment to provide the Department with the authority to publish information in relation to the PBAC may limit Article 17 given it relates to the publication of personal information. However, the purpose of the PSD is to provide the public with information pertaining to PBAC recommendations to ensure doctors, health professionals and patients are aware of the rationale and evidentiary basis for specific PBAC recommendations.

 

Procedure guidance material published on the internet currently sets out the standardised redaction criteria and provides for an internal review process. In addition, publication of PSDs is a long standing and well-accepted practice agreed as part of our obligations under the Australian-United States Free Trade Agreement. These obligations are based on transparency principles supporting the release of information regarding the basis of Government decisions for the subsidy of pharmaceuticals to the Australian community. As a result, proposed legislative amendments will not incorporate standardised redaction criteria for PSDs nor provide for an external appeals mechanism in relation to publication decisions.

 

Conclusion

The Bill is compatible with human rights because it promotes the protection of human rights and to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

 

The Hon Greg Hunt MP, Minister for Health and Aged Care



 

NATIONAL HEALTH AMENDMENT (PHARMACEUTICAL BENEFITS TRANSPARENCY AND COST RECOVERY) BILL 2021

 

NOTES ON CLAUSES

 

Clause 1 - Short Title

This clause provides that the Bill once enacted may be cited as the National Health Amendment (Pharmaceutical Benefits Transparency and Cost Recovery) Act 2021.

 

Clause 2 - Commencement

Section 1 commences the day after Royal Ascent. Section 2 commences on proclamation to align with the commencement of the disallowable legislative instrument which is intended to take effect on 1 January 2022.

 

Clause 3 - Schedule(s)

This clause provides that each Act that is specified in a Schedule to this Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms. This is a technical provision which gives operational effect to the amendments contained in the Schedule.

 

SCHEDULE 1 - AMENDMENT TO THE NATIONAL HEALTH ACT 1953

 

Part 1 - Transparency

 

Item 1 - After section 101A

This item inserts a new subsection into the Act to provide the Department with the authority to publish information and to provide an application provision to specify commencement.

 

Specifically, this items permits publication of Pharmaceutical Benefits Advisory Committee (PBAC) or its subcommittees meeting agendas, meeting outcomes, public summary documents and the information published on the Medicine Status Website (MSW). This information is currently published by the Department using public interest certificates.

 

Item 1 also creates a regulation making power to provide for subsequent amendments to the National Health (Pharmaceutical Benefits) Regulations 2017. These amendments will provide greater transparency for industry by defining the content of the information published in meeting agendas, meeting outcomes, public summary documents and the information published on the MSW.

 

Information published in meeting agendas, meeting outcomes, public summary documents and the information published on the MSW may relate to applications that have not been recommended by the PBAC, or have been subsequently withdrawn from the Pharmaceutical Benefits Scheme (PBS) listing process by an applicant.

 

Amendments formalise and legislate current Departmental process and will not change the information currently published by the Department in relation to PBAC, its subcommittees or the PBS listing process.



 

Item 2 - Application provision

This item inserts an application provision into the Act to clarify that the Department may publish information that was received before commencement to mitigate the administrative difficulties associated with the timing of lodgement of submissions for PBAC consideration and publication of information.

 

Part 2 - Cost recovery

 

Item 3 - After subsection 85E(3)

This item inserts a new (3A) and note into the Act to clarify that the Minister’s ability to make rules that prescribe fees in relation to costs incurred under subsection 99YBA(2) is not limited by the wording of subsection 85E(3)(a).

 

Item 4 - Sections 99YB and 99YBA

This item replaces sections 99YB and 99YBA of the Act to provide:

·          A revised summary to reflect the amendments made to this Division - this is a consequential amendment.

·          For the Minister to make rules through a legislative instrument for cost recovery of:

o    Services related to vaccines and pharmaceutical benefits; and

o    services and costs incurred for the establishment, administration, variation and renewal of deeds entered into under subsection 85E(3)(a) of the Act..

 

In line with Australian Government Charging Framework, the National Health ( Pharmaceuticals and Vaccines - Cost Recovery) Regulations 2009 (the Regulations) are updated annually to ensure they reflect the true efficient costs of providing services, requiring Governor-General Assent and tabling in both houses of Parliament.

 

Replacing the existing regulations with a disallowable legislative instrument will reduce the administrative burden on the Department to update the regulations annually. This amendment will also benefit industry as it provides greater transparency by allowing for the separation of the fees associated with entry into, management, variation and renewal of a deed arrangement. In addition, deed related fees could then be charged at the time these costs are incurred by the Commonwealth.

 

Consultation on fee changes will continue to be undertaken annually through the Cost Recovery Implementation Statement process.

 

Item 5 - Paragraph 99YBB(1)(a)

This item amends the wording of this paragraph to reflect the amendments made by Item 4. This is a consequential amendment.

 

Item 6 - Subparagraph 99YBB(1)(b)(i)

This item amends the wording of this subparagraph to reflect the amendments made by Item 4. This is a consequential amendment.

 

Item 7 - Subparagraph 99YBB(1)(b)(ii)

This item replaces this subparagraph to reflect the amendments made by Item 4. This is a consequential amendment.

 

Item 8 - Section 99YBC (heading)

This item replaces the heading in the Act to reflect the amendments made by Item 9. This is a consequential amendment.

 

Item 9 - Subsections 99YBC(1) to (4)

This item removes these subsections from the Act. Subsections (1) to (4) relate to the review of cost recovery arrangements which was undertaken by the Department in November 2011.

 

Item 10 - Subsection 99YBC(5) (heading)

This item removes this heading from the Act to reflect the amendments made by Item 9. This is a consequential amendment.

 

Item 11 - Continued application of old law for services applied for before commencement

This item inserts a new provision into the Act to preserve section 99YBA of the Act and the Regulations, which will continue to apply in relation to applications received by the Department before commencement.

 

Item 12 - Exercise of powers after commencement where fee is payable for service applied for before commencement

This item inserts new provisions into the Act to clarify that where a fee remains unpaid for services provided under the Regulations, services may not be provided in relation to application made under the new rules until that fee is paid.

 

This item maintains the current process provided for under the legislation which relates to withholding services where fees are unpaid.

 

Item 13 - Application of new law in relation to deeds

This item inserts new provisions into the Act to clarify that the amendments made by Item 4 apply to the establishment, administration, variation and renewal of deeds whenever the application for that activity was received on or after commencement.