National Health Amendment (Pharmaceutical Benefits – Budget and Other Measures) Act 2018

Page last updated: 23 February 2018

On 13 February 2018, the National Health Amendment (Pharmaceutical Benefits – Budget and Other Measures) Bill 2017 was passed by the Parliament.

On 20 February 2018, the Bill received the Royal Assent as the National Health Amendment (Pharmaceutical Benefits – Budget and Other Measures) Act 2018 (Act No. 1 of 2018). This Amendment Act makes a number of changes to the National Health Act 1953.

Commencement for some changes is the day after Royal Assent – that is, from 21 February 2018; others commence on later dates, as specified in the commencement schedule of the Amendment Act.

In summary, the amendments to the National Health Act 1953:

• change pricing arrangements for PBS medicines, as agreed in the Strategic Agreement with Medicines Australia
• remove sunset clauses for the operation of the Australian Community Pharmacy Authority (ACPA) and the pharmacy location rules, as agreed in the Compact with the Pharmacy Guild of Australia
• make a number of technical changes to improve drafting.

Details of the changes

Amendments for measures agreed with Medicines Australia include that:

• for single brand PBS drugs, price reductions of 5%, 10% and 5% are required after 5 years 10 years and 15 years of listing of a drug on the PBS, respectively
• the price reduction that occurs on listing the first additional new brand for an already-listed brand of a medicine is increased from 16% to 25%
• previous price reductions are taken into account when applying price reductions and Ministerial discretion can be used not to apply a reduction, or apply a lesser price reduction
• new presentations of original brands are able to list without a first additional brand price reduction if listed within 5 years of the drug being listed on the PBS, and with Ministerial discretion to extend this provision to brands listing within 10 years, and
• the threshold for applying price disclosure reductions is increased from 10% to 30% where a pharmaceutical item has been on the F2 formulary for at least 42 months (ie. subject to price disclosure for the equivalent of seven cycles).

Amendments for changes agreed with the Pharmacy Guild mean that:

• the cessation provisions (sunset clauses) that would have ceased the operation of the ACPA and pharmacy location rules on 30 June 2020 have been removed entirely.

Amendments which are technical changes:

• the technical amendments support current policy, simplify complex provisions and address inconsistencies relating to:
• accrual of PBS payments to safety net
• terminology used for PBS listings
• collection of PBS prescription data
• determining PBS listings for prescribing by medical practitioners by legislative instrument.

Further information

The Amendment Act can be accessed via the Federal Register of Legislation.

The web page for the Bill on the Parliament of Australia website details the milestones for the Bill and provides access to the text of the Bill, the Explanatory Memorandum, a proposed amendment to the Bill, and all Second Reading Speeches.