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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer & Copyright Details
National Health Amendment Bill (No 1) 2000
Date Introduced: 31 May 2000
House: House of
Representatives
Portfolio: Health and Aged Care
Commencement: Sections 1 to 4 of the Bill commence on Royal
Assent.
The
amendments to the National Health Act 1953 in Schedule 1
commence on 1 July 2000, except items 2 and 10, which commence on
30 June 2000.
The purpose of
this Bill is to amend the National Health Act 1953 to
implement miscellaneous measures arising from the Third Community
Pharmacy Agreement.
On 16 May 2000 the Minister for Health and Aged
Care, Dr Michael Wooldridge, and the Pharmacy Guild of Australia
signed the Third Community Pharmacy Agreement (the 'Third
Agreement').(1) The five-year agreement will run from 1
July 2000 to 30 June 2005.
The Third Agreement builds on the measures
introduced in the First Community Pharmacy Agreement and the Second
Community Pharmacy Agreement. The First Community Pharmacy
Agreement, from 1991 to 1995, introduced a new remuneration
framework for dispensing pharmaceutical benefits. It also began to
restructure the pharmaceutical industry to reduce the number of
pharmacies generally and to encourage rural and remote pharmacies.
The Government provided significant financial incentives ($52
million over four years) for targeted pharmacies (for example, in
metropolitan areas) to close or amalgamate, as well as providing
financial support to pharmacies in rural and remote areas to remain
open. Strict restrictions on relocation of existing pharmacies and
approval of new pharmacies were also introduced.(2)
The Second Community Pharmacy Agreement, which
expires on 30 June 2000, sought to consolidate these measures. In
general terms, the restrictions on the location of pharmacies were
maintained, although financial assistance for the closure or
amalgamation of pharmacies was discontinued. The Second Agreement
introduced important initiatives such as the remote pharmacy
allowance (costing $18 million over five years), the isolated
pharmacy allowance (costing approximately $2 million over five
years) and medication management reviews for nursing home
residents.(3)
The Third Agreement is worth a total of $5.6
billion over the next five years, including an estimated $5.2
billion in prescription-based remuneration to pharmacists and $416
million in other payments for the measures described
below.(4) This is part of the Commonwealth's
Pharmaceutical Benefits Scheme which has an estimated value of $22
billion over the five years of the Third Agreement.
The Third Agreement reduces the location
restrictions that currently apply to pharmacy relocations and new
pharmacy approvals, particularly in growing outer metropolitan
areas and rural areas.(5) These changes are a result of
the recommendations of the National Competition Policy Review of
Pharmacy Legislation.(6)
A key feature of the Third Agreement is the
announcement of a $74 million package over five years to maintain
access to quality community pharmacy services in rural and remote
areas of Australia.(7) The National President of the
Pharmacy Guild of Australia, Mr John Bronger, has stated that this
package of initiatives 'represents a three-fold increase of funds
for rural pharmacies and a doubling of the number of pharmacies
eligible for the various rural allowances'.(8) The rural
pharmacy incentives include:
-
- a Rural Pharmacy Maintenance Allowance to provide a financial
incentive for pharmacy proprietors to remain in a rural or remote
area of Australia. This will replace the isolated pharmacy
allowance and remote pharmacy allowance from 1 January 2001 ($57
million over five years)
-
- a Start-up Allowance to encourage the establishment of new
pharmacies in rural or remote locations where there is a need for a
community pharmacy ($1.5 million over five years)
-
- a Succession Allowance, providing a staggered payment over
three years to pharmacists wishing to purchase an existing pharmacy
in a rural or remote location which is at risk of closure because
of lack of purchasers ($2 million over five years)
-
- substantially increasing funding for the existing Rural
Pharmacy Workforce Development Program, which covers a range of
initiatives to address the shortage of pharmacists in rural areas
($11.5 million over five years), and
-
- an allowance to pharmacists to assist remote Aboriginal Health
Services ($2 million over five years).(9)
The Third Agreement also
introduces a new Pharmacy Development Program to 'promote the
enhanced involvement of community pharmacy in the pursuit of
quality and cost effective service delivery'(10) ($188
million over five years, including $7.5 million to the Guild to
administer the Program). This will include programs for quality
accreditation, the provision of quality use of medicinal
information to consumers, and $15 million for research into
initiatives in community pharmacy.(11)
The Third Agreement contains an extended
Medication Management Services program which aims to give
pharmacist advice, in conjunction with the medical profession, on
the management of the medication-related needs of older people, in
order to minimise the risk that people will suffer adverse
side-effects from combinations of medication. This program includes
an extension of the existing medication reviews for people in
residential care, and introduces medication management
reviews for people living at home ($114
million over five years).(12) The chairman of the
Australian Medical Association's Council of General Practice, Dr
David Rivett, is reported as having expressed concern that the
scheme relies on pharmacists to suggest changes to medications, and
that general practitioners are expected to be involved without
being paid. He suggested that the existing medication reviews for
veterans and nursing home patients had been 'done on the cheap'.
The Pharmacy Guild of Australia supports the remuneration of
general practitioners for their participation in medication
reviews, although they are confident that pharmacists will obtain
the special training needed to competently conduct
reviews.(13)
As an incentive for signing the Third Agreement,
$11 million will be paid to Community Pharmacies as a commencement
bonus early in the first year of the Agreement.(14)
Part VII of the National Health Act
1953 contains detailed provisions about the supply of and
payment for pharmaceutical benefits, together with the allowances
payable to pharmacists. Most of the provisions in the Third
Agreement can be implemented without any change to this
legislation, although some minor amendments are necessary. These
are set out below.
Rural Maintenance Allowance
The Bill repeals the isolated pharmacy
allowance, remote pharmacy allowance and professional allowance,
effective from 1 July 2000 (items 1, 11 and 12 of Schedule
1). These allowances will be replaced by the Rural
Maintenance Allowance, although that allowance will not commence
until 1 January 2001.(15) According to the
Explanatory Memorandum, from 1 July 2000 to 31 December
2000, isolated and remote pharmacy allowances will be payable
administratively.(16) It is not clear why the
legislative repeal of these allowances is not made effective from 1
January 2001, when the new Rural Maintenance Allowance will
commence.
Presently, the Secretary of the Department of
Health and Aged Care determines what allowances are payable, on
recommendation from the Australian Community Pharmacy Authority,
which in turn makes recommendations subject to rules determined by
the Minister.(17) A person may apply to the
Pharmaceutical Benefits Remuneration Tribunal for review of a
decision by the Secretary to refuse payment of an allowance, or for
review of recommendations made by the Authority that an allowance
not be paid, or be paid subject to conditions.(18) These
procedures are repealed, as the allowances themselves have been
repealed (items 6 to 9, 13 to 15 of Schedule
1).
Payment of the new Rural Maintenance Allowance
will not be subject to any legislative procedure, and will not be
reviewable on application by aggrieved pharmacists. It will be
payable solely in the discretion of the Minister, although the
Agreement Management Committee(19) may advise the
Minister on the rules and conditions applying to the
allowance.(20) The Tribunal will no longer have any
function in determining the rate of allowance, as it did have in
determining the rate of the professional allowance when the
Minister and the Guild could not reach agreement (item 3 of
Schedule 1).
Extension of sunset clauses
Currently, pharmacists must apply to the
Australian Community Pharmacy Authority for approval to supply
pharmaceutical benefits from any premises, unless the application
is for a change of ownership of a pharmacy that is to continue to
operate from the same premises.(21) These provisions
were to have ceased to have effect on 30 June 2000. Item 2
of Schedule 1 extends their operation to 30 June 2005, the
end of the Third Agreement.
Item 10 of Schedule
1(22) extends the operation of Division 4B,
which establishes the Australian Community Pharmacy Authority and
sets out its functions and powers. The Division was to have ceased
to operate on 30 June 2000, but will now continue until 30 June
2005. Although the Authority will no longer have any functions
relating to allowances, it will continue to have a role in
considering applications for approval of new pharmacies and
pharmacy relocations.
Miscellaneous amendments
Item 4 of Schedule
1, which amends paragraph 98B(1)(c), repeals the
Tribunal's function of advising the Minister on matters relating to
remuneration for pharmaceutical benefits. It provides that the
Tribunal may only perform such functions in relation to
pharmaceutical benefits as are provided for in an agreement. The
Third Agreement provides that disputes between parties relating to
pharmaceutical benefits are to be resolved by the Tribunal only as
a last resort if direct negotiation and mediation between the
parties have failed.(23)
Currently, under section 99AAB, approved
pharmacists who are receiving a remote pharmacy allowance are not
required to use the Claims Transmission System for receiving
payments in relation to the supply of pharmaceutical benefits.
Item 5 of Schedule 1 repeals this exemption. Under
the National Health Act 1953 as amended by the Bill, the
only persons who may be exempt from using the Claims Transmission
System are approved medical practitioners and suppliers whom the
Secretary has declared to be exempt. However, the Explanatory
Memorandum states that the guidelines will be amended to
continue this exemption for pharmacists who are currently receiving
the remote pharmacy allowance and who are not using the Claims
Transmission System.(24)
Proposed section 4 of the Bill
contains power for the Governor-General to make regulations before
1 January 2001 dealing with transitional or savings arrangements
arising from the amendments made by the Bill, should any
regulations be necessary.
- The text of the Third Community Pharmacy Agreement may be found
on the website of the Pharmacy Guild of Australia at http://www.guild.org.au/thirdagreement/index.htm
or on the Department of Health and Aged Care's website at http://www.health.gov.au/haf/docs/pharmagreement.htm.
- For more information, see the Explanatory Memorandum
to the National Health Amendment (No 1) Bill 2000, p. 5.
- For more information, see the Explanatory Memorandum
to the National Health Amendment (No 1) Bill 2000, pp. 6-7.
- Clause 5.1 of the Third Community Pharmacy Agreement.
- See Minister for Health and Aged Care, the Hon. Dr Michael
Wooldridge, Media Release 16 May 2000, and clause 21.3 of
the Third Community Pharmacy Agreement.
- This can be found on the Department of Health and Aged Care's
website at: http://www.health.gov.au/haf/pharmrev/final.htm.
- Clause 40.1 of the Third Community Pharmacy Agreement. Although
John Bronger, National President of the Pharmacy Guild of
Australia, in his Letter to Guild Members states the figure as $75
million, and the Minister for Health and Aged Care, the Hon. Dr
Michael Wooldridge stated the figure to be $76 million in the
Second reading speech on the National Health Amendment Bill (No 1)
2000, Hansard p. 15696, 31 May 2000.
- John Bronger, Letter to Guild Members, http://www.guild.org.au/thirdagreement/letter.htm.
- This breakdown is not specified in the Third Community Pharmacy
Agreement. The figures are taken from John Bronger, Letter to Guild
Members.
- Clause 48.1 of the Third Community Pharmacy Agreement.
- John Bronger, Letter to Guild Members, and Minister for Health
and Aged Care, the Hon. Dr Michael Wooldridge, Second reading
speech on the National Health Amendment Bill (No 1) 2000,
Hansard p. 15696, 31 May 2000.
- Clause 50 of the Third Community Pharmacy Agreement.
- John Kerin, 'Drug side-effects review', The
Australian, 13 June 2000, p. 1.
- Clause 56 of the Third Community Pharmacy Agreement.
- Minister for Health and Aged Care, the Hon. Dr Michael
Wooldridge, Second reading speech on the National Health Amendment
Bill (No 1) 2000, Hansard p. 15696, 31 May 2000.
- Explanatory Memorandum to the National Health
Amendment (No 1) Bill 2000, p. 2.
- See sections 99K, 99L, 99ZA, 99ZAA, 99ZD of the National
Health Act 1953.
- See subsections 105AB(1), (11A) and (11B), 105AD(2) of the
National Health Act 1953.
- The Agreement Management Committee is composed of members of
the Department of Health and Aged Care, the Pharmacy Guild of
Australia, and by invitation the Pharmaceutical Society of
Australia, clause 6.1.1 of the Third Community Pharmacy
Agreement.
- Clause 41.1 of the Third Community Pharmacy Agreement.
- Subsections 90(3A) to (3C) of the National Health Act
1953.
- Which amends section 99Y of the National Health Act
1953.
- Clause 17.1 of the Third Community Pharmacy Agreement.
- Explanatory Memorandum to the National Health
Amendment (No 1) Bill 2000, p. 45.
Katrine Del Villar
19 June 2000
Bills Digest Service
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ISSN 1328-8091
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