Bills Digest no. 40 2007–08
National Health Amendment (Pharmaceutical Benefits) Bill
2007
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Conclusion
Endnotes
Contact officer & copyright details
Passage history
-
to enable optometrists to prescribe subsidised
medicines under the Pharmaceutical Benefits Scheme (PBS)
-
to
restrict pharmacists who wish to supply medicines under the PBS
from supplying only by mail order
The Commonwealth Government has been
subsidising medicines to Australians since 1948, [1] and currently does so through the
PBS under the National Health Act 1953 (the Act). Total
expenditure on the PBS was over $6.4 billion last year. [2] The PBS was extended to
enable dentists to prescribe medicines in 1978. [3]
Consultations with optometrists have
been subsidised under Medibank or its successor Medicare since
1975. [4] Under
current arrangements, however, patients who need eye medicines are
obliged to follow a visit to an optometrist with a visit to a GP
for a prescription, if they wish to receive subsidised medicine
under the PBS.
The states and territories have implemented
changes to the prescribing rights of optometrists over a number of
years. Victoria passed legislation in 1995, Tasmania in 1996 and
New South Wales in 2002. The ACT began to address the issue with a
discussion paper in September 2003, following a request from the
professional bodies in June 2002. [5] ACT legislation was changed in 2005. [6] Queensland announced
changes in 2003, and made regulations in 2005. [7] The Northern Territory was also
considering changes in 2003, and passed legislation in December
2006. [8] In May 2005
it was reported that optometrists were undergoing training to
enable them to prescribe medicines, but that the scheme was being
delayed by the Commonwealth s failure to subsidise medicines under
the PBS. [9] South
Australia allowed optometrists to prescribe eye drops in 2007.
[10]
In a report
to the Council of Australian Governments (COAG) on the health
workforce in 2006, the Productivity Commission considered the issue
of prescribing rights under the PBS:
Under Medicare, access to most subsidised
specialist services is subject to a referral from a GP. For
example, the Australasian College of Podiatric Surgeons (sub. 131,
p. 7) referred to the lack of MBS rebates for the services of
medical specialists in cases when a patient is referred by a
podiatric surgeon. Similarly, pathology tests must generally be
ordered by medical practitioners. Such referral restrictions aim to
minimise the inefficient use of more specialised and high cost
services, and to contain budgetary costs for government.
But referral restrictions have their own set of costs. In this
respect, the Australian Physiotherapy Association argued that the
inability of physiotherapists to directly refer patients for
diagnostic imaging results in 9500 hours of unnecessary GP
consultations each year, at an annual cost to the taxpayer of $1
million, as well as additional time and monetary costs for patients
(sub. 16, p. 18). Additionally, the Association contended that
there would be further efficiency gains from granting
physiotherapists the right to refer patients for MBS-supported
consultations with specialists such as orthopaedic surgeons and
obstetricians and gynaecologists.
Restrictions on who can prescribe drugs
subsidised under the PBS similarly have some adverse consequences
for the efficient deployment of the health workforce. For example,
the Victorian Government referred to data collected by the
Optometrists Association Victoria, suggesting that:
approximately one out of eight patients who
required a script were referred to a medical practitioner in order
to be eligible for PBS subsidies, and that any increased costs
associated with making PBS available to suitably qualified
optometrists would be offset by savings to Medicare. (sub. 155, p.
33)
The Victorian Government went on to cite work by
Halcomb et al. (2005), which suggests that the potential value of
making MBS benefits available to a wider range of non-medical
providers would be compromised by the current restrictions on PBS
prescribing rights.
[11]
The Productivity Commission recommended the
establishment of a single, broadly-based and independent committee
which would publicly advise the Minister for Health and Ageing on
this and other issues. [12] The Commonwealth Government, however, disagreed,
preferring its existing advisory system. [13] Presumably this Bill is the outcome
of further government consideration of specific measures that might
be adopted as an alternative to the Productivity Commission s
recommendation for systemic change.
The Australian Medical Association (AMA) has
previously raised concerns regarding optometrists performing
opthalmological diagnoses and more interventions from a very
restricted knowledge base. [14] This concern was expressed in the context of
other initiatives which were argued to sideline the role of GPs and
specialists, with the AMA President commenting that unsupervised
role substitution does not satisfy the standard of equal access to
high-quality medical services, regardless of geography or means.
[15]
The framework through which optometrists will
be able to prescribe PBS medicines is given some supervision
through the regulatory structures introduced in the Bill.
In May 2006 the Royal Australian and New
Zealand College of Ophthalmologists published a position statement
proposing a set of nationally consistent standards and principles
to govern prescribing by optometrists. [16]
The Government announced the new measures in
relation to optometrists at the time of the 2007 Budget. [17]
Currently, section 90 of the Act provides for
the Secretary of the Department of Health and Ageing to approve a
pharmacist to supply pharmaceutical benefits at or from particular
premises. Pharmaceutical benefits are medicines for which benefits
will be paid by the Commonwealth (that is, medicines listed on the
PBS schedule).
The Secretary can generally only approve a
pharmacist if the Australian Community Pharmacy Authority (ACPA)
has recommended that approval, and the pharmacist is permitted
under the relevant state or territory law to carry on business as a
pharmacist. [18]
The ACPA is required to consider all
applications against location-based criteria which must be
satisfied in order for a pharmacist to obtain approval to supply
PBS medicines from particular premises. These criteria are set out
in what are known as the pharmacy location rules. They include such
things as the minimum distance between pharmacies and whether there
is a community need for pharmaceutical services in a particular
location. [19] The
pharmacy location rules also prevent pharmacies which are located
within, adjacent to, or connected to, a supermarket, and to which
members of the public have direct access from within the premises
of the supermarket, from being approved to supply pharmaceutical
benefits.
The purpose of the location rules is twofold:
first, to provide widespread community access to pharmaceutical
services, and second, to ensure the continued viability of existing
pharmacies. The location rules have been somewhat controversial
since their introduction in 1991, with some commentators and
interest groups suggesting that they are a source of insufficient
competition within the pharmacy sector. [20] Furthermore, in recent years the
Woolworths retail chain has sought changes to the location rules in
order to gain government permission for the establishment of
in-store pharmacies. [21]
Once approved, pharmacists must also comply
with a range of other conditions in order to continue to be able to
supply pharmaceutical benefits: for example, a pharmacist can only
supply benefits from the pharmacy that he/she is operating, and may
not supply to anyone any pharmaceutical benefit that attracts a
Commonwealth contribution for free, or for a price that is less
than the relevant patient contribution. [22]
According to the Explanatory Memorandum, the
rationale for the amendments in Schedule 2 of the Bill is to
clarify the intention of [the] Act in relation to the supply of
pharmaceutical benefits at or from approved premises. [23] The Explanatory
Memorandum suggests that the intention of the amendments is that,
at a minimum, members of the public will have access to
pharmaceutical benefits at the approved premises at reasonable
times . [24] This
suggests that the intention of the Act was that pharmacists be
required to supply pharmaceutical benefits at the particular
premises for which they have been approved but may also choose to
supply from these premises (for example, to aged-care facilities
and mail-order customers).
The Explanatory Memorandum and Second Reading
Speech do not provide any explanation of why it has become
necessary to clarify the intention of the Act through legislation.
However, the Department of Health and Ageing has indicated (in
correspondence with the Parliamentary Library) that the
interpretation of the term at or from expressed in a recent Federal
Court decision [25]
is inconsistent with the policy intent that an approved
pharmacist must, at the very least, supply pharmaceutical benefits
at the particular premises for which he or she is approved
.
The case in question was heard on appeal from
the Administrative Appeals Tribunal. A Queensland pharmacist,
Susann Holzberger, contested the cancellation of her approval to
supply pharmaceutical benefits from a particular location for which
she had been approved (known as the West End Dispensary ). The
cancellation was made by the Secretary of the Department of Health
and Ageing on the grounds that Ms Holzberger was not carrying on
business as a pharmacist at this location (under subssection 98(3)
of the Act).
The Secretary s decision was made on the basis
that Ms Holzberger was not dispensing PBS medicines to the public
at this location (a 3 x 3 m space that was formerly a
storeroom). Rather, she was dispensing PBS medicines from
this location to another pharmacy (not approved to supply
pharmaceutical benefits) located 375 metres away, from which the
medicines were supplied to the public (known as the West End
Markets Pharmacy ). The Secretary (and later, the Administrative
Appeals Tribunal) found that Ms Holzberger could not be considered
to have been carrying on the business of a pharmacist from the West
End Dispensary on grounds including that only the purely dispensing
function is undertaken at that location (as opposed to the broader
business of a pharmacy, including interacting with members of the
public).
This finding was, however, overturned by the
Federal Court on the grounds that section 90 of the Act refers to
supply at or from the premises in question, indicating
that the supply of pharmaceutical benefits need not necessarily
occur at the approved premises . [26]
The Department s concern with this decision
relates to the potential it creates for pharmacists to avoid the
requirements of the pharmacy location rules. That is, it implies
that an approved pharmacy may supply pharmaceutical benefits to any
number of unapproved premises which are not required to meet the
pharmacy location rules (for example, the distance requirements). A
further possible implication of concern to the Department is that
approved pharmacies may operate as internet-only pharmacies that do
not supply pharmaceutical benefits to members of the local
community. This could have the effect of blocking approvals of
pharmacies that intend to serve the local community but which
cannot meet the distance requirements of the pharmacy location
rules.
As such, the amendments in Schedule 2 appear
to be intended to address what is effectively a loophole created by
the Federal Court decision in the Holzberger case (that is, the
potential to avoid the requirements of the pharmacy location
rules). While the Explanatory Memorandum does state that the
purpose of the Schedule is to clarify the intention of the Act, it
is notable that neither it nor the Second Reading Speech makes any
specific mention of the Federal Court decision or the pharmacy
location rules.
The introduction of PBS prescribing by
optometrists (Schedule 1) is expected to cost
$10.7 million over four years. Presumably this cost is derived from
estimates of the number of prescriptions that have previously not
been subsidised because people have been unwilling to pay the extra
cost of going to a doctor for a prescription. The Explanatory
Memorandum suggests that there will be a small offset of costs
through a reduction in the number of doctor s consultations paid by
Medicare.
There is no cost to the government associated
with the changes to legislation governing pharmacists
(Schedule 2). [27]
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Items 1 5 amend the
Health Insurance Act 1973 to include optometrists among
those who are subject to the Professional Services Review Scheme,
alongside the existing categories of doctors and dentists.
Optometrists will be able to be suspended from supplying subsidised
medicines for up to three years, in the same way as doctors and
dentists can be suspended.
Item 8 inserts the same
definition of optometrist as is used in
the Health Insurance Act.
Item 9 inserts a definition
of PBS prescriber. This will replace
existing references just to doctors and dentists, and will
encompass doctors, dentists and optometrists. Consequential
amendments are made by items 10, 12, 14, 16, 18 36, 42 3, 45 52 and
64‑7.
Item 11 inserts
proposed sections 84AAB AAC, for the
authorisation, suspension or revocation of optometrists as
suppliers of pharmaceutical benefits. The Secretary of the
Department of Health and Ageing has discretion to approve
optometrists, and the Minister may (by disallowable legislative
instrument) determine criteria for approval or conditions that can
be attached to approval. The second reading speech noted that:
Optometrists will need to establish that they
have the necessary professional registration and prescribing
accreditation under state or territory requirements prior to
approval to prescribe PBS medicines.
[28]
It is unclear why these provisions are
different from those that apply to dentists (s. 84A): applications
from dentists must be approved by the Secretary, without
discretion.
Approval of an optometrist may be suspended or
revoked if he or she fails to meet the current criteria for
approval or has breached conditions attached to approval. Before
such a decision is made, an optometrist must be given 28 days
notice to allow him or her to make submissions.
Proposed section 84AAD
provides for departmental review of decisions to suspend or revoke
optometrists. These reviewed decisions may be appealed to the
Administrative Appeals Tribunal (item 44, proposed
sub-section 105AB(2)).
The provisions about the approval etc of
optometrists commence on Royal Assent.
Item 15 authorises approved
optometrists to begin writing prescriptions for subsidised
pharmaceuticals from 1 January 2008 (proposed subsection
88(1C)). The list of approved medicines is to be published
in the Gazette.
The amendments in Schedule 2 tighten the
conditions applying to pharmacists who are approved to supply
subsidised medicines. They will no longer be able to supply
medicines solely by mail order, but will be obliged to be open to
the public, and during reasonable business hours. (Pharmacists will
still also be able to supply medicine to people who do not
come physically to the pharmacy, including by mail (item
8).)
This effect is achieved mainly by removing
several references to pharmacists being able to supply medicines at
or from premises, and replacing them with the term at premises
(items 3 6, 9 15, 17, 19 20).
The conditions of approval for pharmacists are
amended by inserting a requirement for the business to be open
during reasonable business hours, and a lack of business hours or a
failure to supply are added to the criteria for the withdrawal of
approval (items 7, 16 and
18).
Conclusion
The extension of PBS coverage to prescriptions
being made by optometrists is a logical consequence of the
legislative changes made in most of the states and territories in
recent years, and will increase efficiency in the treatment of eye
diseases. Although this was not a direct recommendation of the
Productivity Commission s report on
Australia s Health Workforce, the Bill falls within
the framework of wider prescribing rights that underlay that report
s recommendations.
The changes being made in Schedule 2 do not
appear to have been the subject of public debate or commentary.
They may be regarded as relatively uncontroversial in that they
simply clarify the intent of the Act that pharmacists be required
to supply pharmaceutical benefits at the particular premises for
which they have been approved but may also choose to supply from
these premises. It appears that the purpose of this is to address a
loophole created by the Federal Court decision in the Holzberger
case that creates the potential for pharmacists to avoid the
requirements of the pharmacy location rules. However, it is
remarkable that neither the Explanatory Memorandum nor the Second
Reading Speech makes any specific mention of the Federal Court
decision or the pharmacy location rules.
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Endnotes
[1]. Most of the
Pharmaceutical Benefits Act 1947 came into operation on 1
June 1948. An earlier Act, the Pharmaceutical Benefits Act
1944, was invalidated by the High Court and was never
proclaimed to come into effect.
[3]. National
Health Amendment Act (No. 2) 1978.
[4]. Health
Insurance Act 1975. This fulfilled an election promise by
Gough Whitlam during the 1974 election campaign. The initial
Medicare legislation, the Health Insurance Act 1973, had
commenced on 8 August 1974.
[5]. ACT Health
Protection Service, Prescribing of medicines by optometrists in
the Australian Capital Territory. Discussion
Paper, Canberra, September 2003, pp. 5 7.
[8]. Poisons
and Dangerous Drugs Amendment Act 2006 (NT).
[10].
Optometry Practice Act 2007 (SA), s. 33.
[18]. Australian
Community Pharmacy Authority,
Applications Handbook, Dept. of Health and Ageing,
Canberra, March 2007, p. 2.
[20]. See, for
example, P. Kerin, High price of anti-competition , Business
Review Weekly, 30 June 2005, p. 34; N. Ballenden, The
pharmacy: why it can t stay a closed shop , Consuming
Interest, Winter 2005, pp. 18 20; M. Metherell, Pharmacy
profits hit a nerve , Sydney Morning Herald, 16 May 2005,
p. 1; B. Glasson, Getting tough on turf , Australian
Doctor, 18 February, 2005, p. 21; A. Fels and F. Brenchley,
Dispense some competition to the pharmacies , Sydney Morning
Herald, 8 April 2004, p. 17; J. Albrechtsen, Strip these white
coats of subsidies , The Australian, 1 September
2004, p. 15.
[21]. See for
example, S. Mitchell, Woolies resists drug-free future ,
Australian Financial Review, 16 February 2006, p. 24; C.
Jimenez and K. Murphy, Woolies in pharmacy trial furore ,
The Australian, 10 May 2005, p. 24; M. Polimeni,
Woolies in fresh pharmacy assault , Canberra Times, 7 May
2005, p. 13; AAP, Woolworths touts pharmacy trial , Australian
Financial Review, 9 May 2005, p. 17.
[23].
Explanatory Memorandum, p. 2.
[27].
Explanatory Memorandum, p. 3.
Luke Buckmaster
Social Policy Section
Patrick O'Neill
Law and Bills Digest Section
11 September 2007
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