Location rules in Parliament

Canberra Parliament House

A continuation of existing pharmacy location rule provisions is among the 2017 Budget amendments tabled in Parliament this week

The measures are part of the National Health Amendment (Pharmaceutical Benefits – Budget and Other Measures) Bill that will amends the National Health Act 1953, implementing measures negotiated with the pharmaceutical and pharmacy industries and announced in the 2017 Budget.

The amendments were agreed after negotiations between the Federal Government, the Pharmacy Guild of Australia, Medicines Australia and the Generic and Biosimilar Medicines Association.

Together the agreements are estimated to generate savings to the PBS of around $1.3 billion over four years from 2017-18, with another $1.8 billion of savings via the agreement with Medicines Australia.

Among its non-financial measures is a guarantee to preserve existing pharmacy location rules beyond the life of the Sixth Community Pharmacy Agreement. 

“This Bill will remove the cessation of operation provisions from the National Health Act 1953,  preserving the existing arrangements and providing ongoing assurance and certainty for pharmacies, particular those in rural and remote communities,” the bill states.

The 6CPA terminates on 30 June 2020, at which time, all legislative provisions in the National Health Act 1953 relating to the Rules and the Australian Community Pharmacy Authority were scheduled to cease. 

The bill also extends, for another two years, the existing 5% price reduction that applies for single brand drugs on the Fl formulary on their fifth anniversary of listing.

This measure was due to end in 2020, but now will apply until April 2022.

It also introduces two new anniversary price reductions for drugs on Fl: a 10% reduction after 10 years of listing on the PBS; and a further 5% reduction after 15 years of listing.

There will be a catch-up special reduction day on 1 June 2018 to apply these reductions to medicines that have already reached their 10-year or 15-year anniversary by that date, and subsequent anniversary reduction days will occur on 1 April of each year.

Another new measure also provides that after a medicine has had seven full cycles of price disclosure data collections and reduction days, the threshold for price disclosure price reductions will increase from the current 10% to 30%.

“This move should provide some relief from price disclosure reductions for medicines which may have already had repeated market driven price reductions,” the government says.

“The compacts are underpinned by a range of shared principles to create a world class health system, transparency in decision making, accountability for reforms, and stability and certainty in regards to Government investment,” according to the preamble of the bill, which was tabled for a second reading earlier this week.

“The amendments in this Bill deliver a responsible and necessary response to growing pressures on the PBS. They provide for a fair outcome for pharmacies, the pharmaceutical industry, government and consumers. They also respect the value of tax-payer dollars which provides the funding for the PBS”.

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