National Health Amendment (Fifth Community Pharmacy Agreement Initiatives) Bill 2011

Bills Digest no. 98 2011–12

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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.

Rebecca de Boer
Social Policy Section
3 February 2012 

Financial implications
Main issues
Concluding comments

Date introduced:  23 November 2011
House:  House of Representatives
Portfolio:  Health and Ageing
Commencement:  1 July 2012


Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at


This Bill gives effect to two initiatives announced as part of the Fifth Community Pharmacy Agreement: ‘Supply and Pharmaceutical Benefits Scheme Claiming from a Medication Chart in Residential Aged Care Facilities’ and ‘Continued Dispensing of Pharmaceutical Benefits Scheme in Defined Circumstance’.


The Fifth Community Pharmacy Agreement (5CPA) governs the remuneration arrangements for pharmacists dispensing prescription pharmaceuticals under the Pharmaceutical Benefits Scheme (PBS) over a five year period. It was signed on 3 May 2010 and publicly released on 11 May 2010 (Budget night). Community pharmacists are paid a fee for the dispensing of PBS medications and other payments for the provision of pharmacy services to the community (for example, incentives and support for the rural pharmacy workforce). The total value of the agreement is $15.4 billion over five years.

With one notable exception, the 5CPA did not appear to materially differ from past agreements. Many of the provisions in the 5CPA sought to refine and improve existing arrangements such as improvements to services for Aboriginal and Torres Strait Islander people.[1] The notable exception was that pharmacists will be allowed to dispense a single standard pack of medicines to patients without prescription, known as ‘medication continuance’ (subject to legislative change in all states and territories).[2]  This will initially apply to two therapeutic categories, oral contraceptives and lipid modifying agents (cholesterol-lowering drugs).[3] These products were chosen as they are relatively well tolerated and have a good safety profile.[4]

Another feature of 5CPA is the proposed introduction of Supply and PBS Claiming from a Medication Chart in Residential Aged Care Facilities. It enables the dispensing of PBS medicine from a resident’s medication chart thus reducing duplication associated with the prescriber completing the PBS prescription form and the medication chart. Support for this initiative was indentified in a review of the Fourth Community Pharmacy Agreement which considered the supply of PBS medicines to residential aged care facilities and private hospitals.[5]

In March 2011, the Department of Health and Ageing (DoHA) and the Pharmacy Guild (the Guild) released consultation papers about the proposed implementation of both measures and invited submissions.[6] The closing date for submissions was 15 April 2011.[7]

The Australian Commission on Safety and Quality in Health Care commenced work on a standardised medication chart to be used nationally in residential aged care facilities (known as the National Residential Medication Chart Project) on 31 March 2011. Part of the rationale for this measure is improved patient safety and better management of prescription pharmaceuticals in residential aged care. Improvements to medication chart design such as standardisation have been shown to improve medication safety.[8]

As part of this project, a survey of stakeholders is underway and submissions close on 13 February 2012. Analysis of medication charts currently used by residential aged care facilities has recently been published. [9]

Committee consideration

The most recent meeting of the Selection of Bills Committee deferred consideration of the Bill to the next meeting.[10] This is due to take place on Wednesday of the first sitting week (8th February 2012). The last meeting for the Scrutiny of Bills Committee for 2011 was before the Bill was introduced into the House of Representatives. The Scrutiny of Bills Committee has not yet met for 2012.

Policy position of non-government parties/independents

At the time of writing the position of non-government parties and the independents was unknown.

The Greens have called for a Senate inquiry into 5CPA with a focus on the way medicines are dispensed and the negotiation process between the Guild and the Government. The lack of consumer and other stakeholder representation in the negotiation process was also identified as a key area of concern. The Senate is yet to vote on the notice of motion.[11] It is unlikely that the measures in this Bill will be canvassed in the inquiry.

Position of major interest groups

Not surprisingly, the Pharmacy Guild is a strong supporter of both measures. When the announcement about continued dispensing was made, the Australian Medical Association (AMA) argued it would be ‘putting patients at risk’, arguing that there was no evidence to suggest that it was safe for pharmacists to dispense medication without a prescription or any review of the patient’s condition.[12] This was disputed by other stakeholders who argued the program was a ‘pragmatic’ way to ensure medication adherence as pharmacists will only be able to dispense prescriptions in limited circumstances, such as the inability to make an appointment with a general practitioner.[13]

The AMA has maintained its opposition to the continued dispensing measure and has written to all MPs and Senators urging them not to support the Bill.[14] They also wrote to the Pharmacists Society of Australia (PSA) in November 2011 arguing that there was no evidence to support the measure and it could undermine the doctor-patient relationship.[15] This was disputed by the PSA who view the Bill to be ‘a necessary move towards caring for patients after and beyond consultation with their GP’.[16]

The AMA’s arguments against the measure are outlined in their submission responding to the Continued Dispensing of PBS Medicines in Defined Circumstances – consultation paper released by DoHA and the Guild. The main arguments were that pharmacists were not adequately trained to make assessment about whether prescription pharmaceuticals were appropriate at that time and lack of evidence to support the continued dispensing of lipid lowering agents or the oral contraceptive pill.[17] The AMA challenged the basis of the initiative – improved treatment of chronic disease – on the grounds that there no clinical evidence of adverse outcomes if patients go without lipid lowering therapy for two weeks and that the oral contraceptive pill was not used in the management of chronic disease. They also argued that there was no evidence to suggest that this measure would improve patient outcomes or cost effectiveness.  The importance of consultation with the medical profession prior to prescribing or dispensing was considered paramount.

Recent media commentary has highlighted the tensions between the stakeholder groups.[18] The PSA and the Guild remain supportive of the measure and have developed protocols to ensure that drugs are dispensed safely and correctly. The Chief Executive Officer of the National Prescribing Service, Dr Lynn Weekes, has suggested that continued prescribing could promote medication adherence and that there was a low risk associated with not taking lipid lowering drugs for a couple of days if medication usage was regular.[19] The AMA continues to argue that the measure is inappropriate and ‘incursion into doctor’s work’.[20]

There has been very little stakeholder commentary about the Supply and PBS Claiming from a Medication Chart in Residential Aged Care Facilities. Publicly available information from the National Residential Medication Chart Project suggests a high level of stakeholder engagement and participation in the project as there was a high participation rate in the initial survey of the sector.[21]

Financial implications

Funding for both measures is included in 5CPA. Up to $1 million has been allocated for the Continued Dispensing of PBS Medicines in Defined Circumstance Initiative and up to $3 million for the Supply and PBS Claiming from a Medication Chart in Residential Aged Care Facilities.[22] There is no ongoing funding for either of these initiatives and funding is intended for implementation purposes.[23] The funding includes a review of both initiatives.[24]

Main issues

One of the features of this Bill is that the majority of clauses empower the Minister to act either through a legislative instrument, Ministerial determination or regulation. With the exception of proposed subsection 89A, there is little detail in the Bill.

This, however, is not uncommon for Part VII‑Pharmaceutical Benefits of the National Health Act 1953. Much of the detail about the operation of the PBS and availability of prescription pharmaceuticals under the PBS is contained in determinations under relevant sections or paragraphs of the Act. Unless otherwise specified, legislative instruments, Ministerial determinations and regulations are disallowable under the Legislative Instruments Act 2003. This Bill does not contain any such clauses.

This Bill has three Schedules:

  • Schedule 1 – the Continued Dispensing Initiative
  • Schedule 2 – the Medication Chart Initiative, and
  • Schedule 3 – prescriptions for the Supply of Pharmaceutical Benefits.

Schedule 1

Proposed subsection 89A sets out when pharmaceuticals can be supplied without prescription. The Minister is able to determine which pharmaceutical benefits can be supplied in these circumstances under proposed clause 3. The second reading speech and the consultation paper drafted by DoHA and the Guild both note that this will apply only to oral hormonal contraceptives for systemic use and lipid modifying agents, specifically the HMG CoA Reductase inhibitors.[25]  The consultation paper states that no other lipid modifying agents will be permitted (nor will combination products). Of all the lipid modifying agents on the PBS, only five types will be eligible: atorvastatin, pravastatin, rosuvastatin, simvastatin and fluvastatin.[26] Atorvastatin and rosuvastatin are the highest and third highest respectively of the most frequently dispensed drugs on the PBS.

Proposed clause 3, part b, notes that the Minister may determine the conditions that must be satisfied when supplying pharmaceuticals without a prescription. Presumably these will reference the protocols that have been developed by the PSA and Guild. To date, these are not publicly available. In a letter to the PSA about the draft protocols, the AMA reiterated its opposition to the proposal and argued that the measure exposed pharmacists and doctors to medico-legal risk. It suggested improved patient education about when their last repeats were due as a viable alternative.[27]  In its earlier submission to the consultation paper the AMA noted that there was currently no process to prevent ‘serial’ repeats being dispensed at different pharmacies. [28]

Schedule 2 – the Medication Chart Initiative

This section adds a short note to the end of subsection 93A(2).  This note clarifies that conditions for prescribing and dispensing in private hospitals are different to residential care facilities.

Section 93A of the Act sets out the conditions that must be satisfied by medical practitioners and authorised nurse practitioners to prescribe PBS medicines. Determination under sections 93 and 93AA – Pharmaceutical benefits to be supplied by medical practitioners and authorised nurse practitioners (PB 103 of 2011) outlines the determinations under Section 93A.

Schedule 3 – Prescriptions for the Supply of Pharmaceutical Benefits

Proposed subsection 85A(2)(2A) further strengthens and clarifies the Minister’s power in relation to determining the conditions that must be satisfied before prescribing PBS medications. This power is already enshrined in legislation but this will enable the Minister to specify different maximums for different uses.[29] For example, some PBS medications have dual purposes (i.e pain relief and/or palliative care) and the Minister could determine different dispensing arrangements (such as requiring an authority from Medicare Australia or maximum repeats) for the same drug depending on its use.

Proposed subsection 85A (3A) gives the Minister to power to make a determination under Regulation 13 of the National Health (Pharmaceutical Benefits) Regulations 1960 to vary the maximum quantity or number of repeats. A decision about this would be based on advice from the Pharmaceutical Benefits Advisory Committee and is consistent with what currently happens with other determinations.[30]

Proposed subsection 84A(4) provides that all determination made under section 85A are legislative instruments. This means they are subject to disallowance within 15 sitting days of being tabled in Parliament.

Item 4 notes that any changes the conditions governing the prescribing apply to prescriptions written the day after this Schedule commences (1 July 2012).

Concluding comments

The legislative provisions of this Bill do not give much detail about how the proposed initiatives -Continued Dispensing of PBS medicines and the Residential Medication Chart Initiative - will be implemented. Consultation processes conducted by the Government have given some insight into this and it appears that implementation is well advanced.

The AMA remains opposed to the continued dispensing initiative and continues to argue that there is a lack of evidence to support the measure. The Explanatory Memorandum notes that the funding for these initiatives does include a review but parameters have not been set.[31] In her second reading speech Minister Roxon noted that this initiative will ensure ‘optimal health outcomes’ for patients[32] but this will be difficult to measure. Furthermore, this measure not only raises questions about the best way to promote medication adherence but broader questions about the role of pharmacists and GPs in a changing health care environment. These, perhaps, have not yet been adequately explored.

There appears to be widespread stakeholder support for the Residential Medication Chart Initiative. Despite this, the funding arrangements for aged care continue to remain a challenge for government and aged care providers alike. A recent survey of aged care providers has revealed that aged care funding is falling behind the costs of care by about $62 per day.[33] In this context, it is unlikely that the aged care sector will be able to comprehensively implement this measure without government support, despite the potential benefits to patient safety.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2503.

[1].       N Roxon (Minister for Health and Ageing), Better pharmacy services, media release, 3 May 2010, viewed 31 January 2012,

[2].       Pharmacy Guild of Australia, New agreement: quality care for consumers, certainty for community pharmacy, expanded role for pharmacists, media release, 3 May 2010, viewed 31 January 2012,

[3].       Ibid.

[4].       Department of Health and Ageing (DoHA) and the Pharmacy Guild, Fifth Community Pharmacy Agreement Consultation, March 2011, viewed 30 January 2012,

[5].       Fourth Community Pharmacy Agreement, Review of the existing supply arrangements of PBS medicines in residential aged care facilities and private hospitals: final report, Healthcare Management Advisors Pty Ltd, 30 September 2009, viewed 31 January 2012,$File/Final%20Report%20RACF%20&%20PH%20review%2020090930.pdf

[6].       Department of Health and Ageing, consultation paper, 4 April 2011, viewed 3 February 2012,

[8].       Australian Commission on Safety and Quality in Health Care (ACSQH), Analysis of residential aged care facility medication charts 2012, ACSHC, Sydney, viewed 31 January 2012,$File/NRMC%20Project%20RACF%20Medication%20Chart%20Analysis%20Report.pdf

[9].       Ibid.

[10].      Selection of Bills Committee, Report no. 17 of 2011, 25 November 2011, para. 4, viewed 30 January 2012,

[11].      R Di Natale, Greens call for an inquiry into community pharmacy agreement, media release, 22 November 2011, viewed 1 February 2012,

[12].      Australian Medical Association (AMA), Community pharmacy agreement – government puts patients at risk, media release, 4 May 2010, viewed 31 January 2012,

[13].      L Mulligan, ‘Prescriptions still apply: Fifth Community Pharmacy Agreements Continuance program’, The Australian, 15 May 2010, viewed 31 January 2012,

[14].      Australian Medical Association, ‘AMA challenges continued dispensing’, Australian Medicine online, 12 December 2011, viewed 31 January 2012,

[15].      L Omagari, ‘Pharmacists to replace GPs under Roxon’s proposed legislation’, Transforming the Nation’s Healthcare website, 6 December 2011, viewed 30 January 2012,

[16].      Ibid.

[17].      Australian Medical Association (AMA), Submission to the Department of Health and Ageing, Inquiry into the continued dispensing of Pharmaceutical Benefits Scheme in defined circumstances, 13 April 2011, viewed 30 January 2012,

[18].      M Metherell, ‘Doctors challenge plan for chemists to hand out pills’, Sydney Morning Herald, 1 February 2012, p. 5, viewed 1 February 2012,;query=Id%3A%22media%2Fpressclp%2F1383638%22

[20].      Op. cit., Metherell.

[21].      Op. cit., ACSQH.

[22].      Explanatory Memorandum, National Health Amendment (Fifth Community Pharmacy Agreement Initiatives) Bill 2011, p. 1.

[23].      Ibid.

[24].      Ibid.

[25].      Op. cit., DoHA and the Guild and N Roxon, ‘Second reading speech: National Health Agreement (Fifth Community Pharmacy Agreement Initiatives) Bill 2011’, 23 November 2011, p. 7.

[26].      These drugs belong to the C10AA group of the PBS. The PBS is organised according to body system and drug function. For example, fluvastatin is classified under cardiovascular system – lipid modifying agents – lipid modifying agents, plain.

[28].      Op. cit., AMA.

[29].      Explanatory Memorandum, pp. 3-4.

[30].      Explanatory Memorandum, p. 4.

[31].      Explanatory Memorandum, p. 1.

[32].      Op. cit., N Roxon.

[33].      M Metherell, ‘Aged care funding falling behind’, The Age, 2 February 2012, p. 9, viewed 3 February 2012,;query=Id%3A%22media%2Fpressclp%2F1384412%22

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