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2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL HEALTH AMENDMENT (GENERAL CO-PAYMENT) BILL
2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Health and Aged Care,
the Hon Mark Butler MP)
NATIONAL HEALTH AMENDMENT (GENERAL CO-PAYMENT) BILL
2022
OUTLINE
Purpose of the Bill
The National Health Amendment (General Co-payment) Bill 2022 (Bill) amends the
National Health Act 1953 (National Health Act) to reduce the Pharmaceutical
Benefits Scheme (PBS) general co-payment (general patient charge) by $12.50, from
the current amount of $42.50 to the new amount of $30.00, commencing from 1
January 2023.
The Bill reduces the PBS general patient charge and also gives effect to the
commitment that no patient would be worse off by allowing pharmacies to apply an
optional discount to the PBS dispensed price (referred to as the 'Commonwealth
Price') of certain PBS medicines with a Commonwealth Price between the new co-
payment of $30.00 and the current co-payment of $42.50.
Overview of the Bill
The PBS operates under Part VII of the National Health Act to provide Australians
with timely, reliable and affordable access to necessary and cost-effective medicines.
The Bill amends Part VII of the National Health Act to implement measures that will
give effect to the reduction of the general patient charge and the optional discount.
The amendments in Schedule 1 of the Bill reduce the PBS general patient charge by
$12.50, from the current amount of $42.50 to the new amount of $30.00. For certain
supplies of pharmaceutical benefits that have a Commonwealth Price between $30.00
and $42.50 (indexed annually), the Bill gives pharmacists an option to discount the
price to general patients by more than $1 while supplying as a PBS prescription.
These changes will take effect from 1 January 2023.
The established practice is that pharmacists are able to discount medicines that have a
Commonwealth Price at or below the current general patient charge. Hence the
reduction of the general patient charge could have led to some patients paying more
for their medicines. These amendments ensure that patients will not be inadvertently
worse off after the general patient charge is reduced.
After 1 January 2023, the indexation arrangements defined in section 99G of the
National Health Act will resume, with no change to the current operation. That is, the
general patient charge will be indexed by applying the index number (section 99F)
from the reference quarter (September 2023) to the new general patient charge
($30.00) on the indexation day (1 January 2024).
Indexation will also be introduced on 1 January 2023 for the upper limit of the range
which defines the Commonwealth prices eligible for the optional discount, to ensure
the range of medicines able to be discounted each year is in line with the policy intent.
The reduction to the general patient charge can have an impact on the number of
scripts a general patient has filled before reaching the Safety Net threshold, but does
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not change the dollar amount at which a patient will reach the general PBS Safety Net
threshold.
For example, under current 2022 policy if a patient was supplied 40 PBS prescriptions
in one year, and all were priced at or above the general patient charge (at $42.50
each), then they would have paid $1,445.00 for the first 34 scripts. At that point the
patient reaches the Safety Net threshold ($1,457.10 in 2022), and the remaining six
scripts would cost the patient a total of $40.80, noting the concessional price ($6.80)
per script is charged for those patients who have reached the general Safety Net, with
their total cost being $1,485.80.
Under this Bill, if a patient had 40 full general patient charges (at $30.00 each) in one
year, then they would have paid $1,200.00 for 40 scripts. While the patient no longer
reaches the Safety Net threshold, they would have actually saved $285.80 in out-of-
pocket costs.
Financial Impact Statement
This Bill is estimated to have an impact of $696.1 million on underlying cash.
Indexation arrangements for the general patient charge in line with the Consumer
Price Index continue from 1 January 2024.
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Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011
NATIONAL HEALTH AMENDMENT (GENERAL CO-PAYMENT) BILL
2022
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 Bill amends the National Health Act 1953 (National Health Act) to reduce the
Pharmaceutical Benefits Scheme (PBS) general patient charge by $12.50, from the
current amount of $42.50 to the new amount of $30.00. For certain supplies of
pharmaceutical benefits that have a Commonwealth Price between $30.00 and $42.50
(indexed annually), the Bill gives pharmacists an option to discount the price to
general patients by more than $1 while supplying as a PBS prescription. These
changes will take effect from 1 January 2023.
After 1 January 2023, the indexation arrangements defined in section 99G of the
National Health Act will resume, with no change to the current operation. That is, the
general patient charge will be indexed by applying the index number (section 99F)
from the reference quarter (September 2023) to the new general patient charge
($30.00) on the indexation day (1 January 2024).
Indexation will also be introduced on 1 January 2023 for the upper limit of the range
which defines the Commonwealth prices eligible for the optional discount, to ensure
the range of medicines able to be discounted each year is in line with the policy intent,
which is to ensure that patients will not be inadvertently worse off after the general
patient charge is reduced compared to arrangements in place prior to 1 January 2023.
Human rights implications
Right to Health
The Bill engages the right to health. Article 12(1) of the International Covenant on
Economic, Social and Cultural Rights (ICESCR) promotes the right of all individuals
to enjoy the highest attainable standard of physical and mental health. The UN
Committee on Economic Social and Cultural Rights (the Committee) has stated that
the right to health is not a right for each individual to be healthy, but is a right to a
system of health protection which provides equality of 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 essential healthcare and the enjoyment of the highest attainable
standard of physical and mental health by reducing the general patient charge by
$12.50, improving the affordability of PBS medicines and supporting access to
subsidised pharmaceutical treatments for Australians without a concession card.
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Right to Social Security
The Bill engages the right to social security. Article 9 of the ICESCR recognises the
right to social security and requires that a country must, within its maximum available
resources, ensure access to a social security scheme that provides a minimum essential
level of benefits to all individuals and families that will enable them to acquire at least
essential health care. Countries are obliged to demonstrate that every effort has been
made to use all resources that are at their disposal in an effort to satisfy, as a matter of
priority, this minimum obligation. The Bill contains provisions that ensure the PBS
will assist with advancement of these human rights by providing a greater subsidy and
therefore increasing access to medicines for Australians.
Conclusion
This Bill is compatible with human rights as it does not raise any human rights issues.
(Circulated by the authority of the Minister for Health and Aged Care, Hon
Mark Butler MP)
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NATIONAL HEALTH AMENDMENT (GENERAL CO-PAYMENT) BILL
2022
NOTES ON CLAUSES
Clause 1 - Short Title
Clause 1 provides that the short title of this Act is the National Health Amendment
(General Co-payment) Act 2022.
Clause 2 - Commencement
Clause 2 provides that the Act commences on 1 January 2023.
Clause 3 - Schedule
Clause 3 provides that each Act that is specified in a Schedule to this Bill is amended
or repealed as set out 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 amends the National Health
Act 1953 (National Health Act).
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Schedule 1 - Amendments
Item 1 - Subsection 84(1)
Item 1 inserts new definitions of "eligible for increased discounting" and "general
patient charge amount".
"eligible for increased discounting" is defined in new section 87AA of the National
Health Act (see item 8).
"general patient charge amount" is defined as meaning $30.00, which reflects the new
general patient charge amount that will commence from 1 January 2023.
Item 2 - Paragraph 84C(4)(c)
Item 2 omits the reference to the general patient charge of "$28.60" in paragraph
84C(4)(c) and substitutes it with the updated reference to the new general patient
charge amount of $30.00. The general patient charge is the amount the general patient
pays towards the cost of their PBS subsidised medicine. The general patient charge as
at 1 January 2005 was $28.60, however indexation increased the general patient
charge to $42.50 as at 1 January 2022.
This amendment reflects the reduction to the PBS general patient charge by $12.50,
from the current maximum amount of $42.50 to the new amount of $30.00, which
ensures that medicines continue to be affordable for all Australians.
Item 3 - Subparagraph 84C(4)(c)(i)
Section 84C of the National Health Act provides for the circumstances where a person
is eligible to be issued with a concession and entitlement card for the supply of
pharmaceutical benefits. Item 3 omits the reference to the general patient charge of
"$28.60" in subparagraph 84C(4)(c)(i) and substitutes it with the updated reference to
general patient charge amount. In particular, this amendment ensures that where the
supply is not eligible for increased discounting, the general patient charge amount
(less any allowable discount) must be charged for the prescription to count towards
the PBS Safety Net under section 84C of the National Health Act.
Item 4 - After subparagraph 84C(4)(c)(i)
Item 4 inserts a new subparagraph 84C(4)(c)(ia), which allows prescriptions that are
eligible for increased discounting to be taken into account for the purposes of section
84C of the National Health Act where the amount charged is less than the general
patient charge amount (less any allowable discount). This means the amount charged
for the supply of these scripts can contribute towards reaching the PBS Safety Net
threshold.
Item 5 - Paragraph 87(2)(e)
Item 5 omits the phrase "supplied $28.60 (less any allowable discount)" and
substitutes it with new subparagraphs (i) and (ii) which permits an approved
pharmacist or an approved medical practitioner, acting in accordance with their
approval, to charge the person to whom the pharmaceutical benefit is supplied, the
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general patient charge, or where the supply is eligible for increased discounting, the
charge to the patient must be greater than nil, but can be less than the general patient
charge amount subtract the maximum allowable discount.
Item 6 - Subsection 87(2) (note 1)
Item 6 inserts the phrase ", and the general patient charge amount," in Note 1 of
subsection 87(2). This is a consequential amendment reflecting the amendment made
in item 5 which replaces the references to the amount of $28.60 in subsection 87(2)
with references to the updated "general patient charge amount". This amended note
ensures that the general patient charge amount continues to be indexed under section
99G of the National Health Act.
Item 7 - At the end of subsection 87(2)
Item 7 adds a third note in subsection 87(2) of the National Health Act, which
specifies that a supply eligible for increased discounting under new subparagraph
87(2)(e)(ii) can be charged at an amount lower than the general patient charge less the
maximum allowable discount a pharmacist or medical practitioner may give.
Item 8 -After section 87
Item 8 inserts a new section 87AA, which defines "eligible for increased
discounting".
A supply of a pharmaceutical benefit by a pharmacist or a medical practitioner is
eligible for increased discounting if the supply relates to a general patient prescription
(other than one relating to a concession card prescription), the supply is not an early
supply of the particular pharmaceutical benefit, and at the time of the supply the
Commonwealth price (the price the Commonwealth uses to calculate the subsidy paid
to a pharmacist) of the benefit is between $30.00 and $42.50 (indexed annually).
Item 9-Paragraphs 99(2A)(a), (aa) and (b)
Item 9 makes consequential amendments to paragraphs 99(2A), (aa) and (b) of the
National Health Act to remove the references to the general patient charge of
"$28.60" and substitute it with the reference to "the general patient charge amount",
as a result of the reduction in the PBS general co-payment.
Item 10 - Subsection 99(2A) (note)
Item 10 repeals the note in subsection 99(2A) of the National Health Act as it is no
longer required.
Item 11 - After subsection 99(2B)
Item 11 inserts new subsection 99(2C) which specifies the Commonwealth payment
for supply of a pharmaceutical benefit eligible for increased discounting. Where a
supply is eligible for increased discounting and the amount charged for the supply is
less than the lowest amount chargeable under new subparagraph 87(2)(e)(i) of the
National Health Act, the entitlement for the approved pharmacist or medical
practitioner to be paid by the Commonwealth for the supply of the pharmaceutical
benefit does not apply.
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Item 12 - Section 99F (definition of general patient charge)
Item 12 changes the definition of "general patient charge" by omitting the reference to
"each amount of $28.60 referred to in paragraph 84C(c) or 87(2)(e) or subsection
99(2A)" to "the amount specified in the definition of general patient charge amount
in subsection 84(1)" of the National Health Act (see item 1). This is a consequential
amendment that reflects the reduction of the PBS general patient charge amount to
$30.00.
Item 13 - Section 99F
Item 13 inserts a new definition of increased discounting upper Commonwealth price,
which references the amount specified in new subparagraph 87AA(c)(ii) - less than or
equal to $42.50.
Item 14 -- Subsection 99G(1)
Item 14 removes the reference to the year indexation it is applied from as it is no
longer necessary. This item does not change indexation arrangements.
Item 15 - Subsection 99G(1) (at the end of the table)
Item 15 adds the indexation of the "Increased discounting upper Commonwealth
price" and specifies the relevant "Indexation day" and "Reference quarter" in the CPI
Indexation Table.
Item 16 - Indexation
The Bill resets the general patient charge to $30.00 and defines this amount as the
general patient charge amount on 1 January 2023. This item provides for the
indexation of the general patient charge amount to resume on an annual basis from 1
January 2024. This item also provides for the "Increased discounting upper
Commonwealth price" to be indexed annually from 1 January 2023. This item does
not change indexation arrangements for other amounts.
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