HEALTH Alert: July 2015

2 July 2015


Pharmaceutical Benefits Scheme to be reformed

On 27 May 2015, the Federal Minister for Health announced the Government’s Pharmaceutical Benefits Scheme (PBS) Access and Sustainability Package of reforms. The Government asserts that the reforms will:

  • provide Australians with cheaper medicines;
  • result in a more competitive pharmacy sector;
  • improve access to new medicines for Australians;
  • provide greater certainty for medicines manufacturers; and
  • inject an additional $2.8 billion investment in supporting pharmacy and primary care.

The Government has already introduced the legislative changes supporting the reform package into the lower house, with the most new measures to begin rolling out from 1 July, 2015.

The reforms aim to achieve their goals by:

  • implementing changes to price disclosure arrangements applied to medicines subject to competition by removing the ‘originator’ brand version of the drug from pricing calculations;
  • giving pharmacists the ability to offer consumers a discount of up to $1 per script on the price on the pharmaceutical benefits scheme (PBS) co-payment;
  • a $20 million awareness campaign to support the increased use of ‘biosimilar medicines’ by patients, pharmacists and specialists. Biosimilars are complex biological medicines that are approved by the Therapeutic Goods Administration as an alternative to an existing brand;
  • a five per cent reduction in the price taxpayers pay for on-patent medicines that have been listed for five years or more on the PBS;
  • closing loopholes around the way combination drugs are subsidised under price disclosure reductions; and
  • the removal of some comparatively low-cost over-the-counter medicines from the PBS, many of which can be bought for below the price of the PBS concessional co-payment.

Pharmaceutical and healthcare providers should review their current patent application policies and pricing structures to ensure that they take full advantage of the announced changes to the PBS.

Guide to the NSQHS Standards released

In September 2011, the Australian Commission on Safe and Quality in Health Care (Commission) developed the National Safety and Quality Health Service Standards (NSQHS Standards) to improve the quality of health service provision in Australia and, since 2013, accreditation to the Standards has been mandatory for all Australian hospitals and day procedure services.

Until recently, hospital and day procedure service operators have had little guidance as to how to best to practically comply with the NSQHS Standards. In April this year, the Commission released the ‘Guide to the NSQHS Standards for health service organisation boards’ (Guide) to help delineate the responsibilities of directors in the industry.

The Guide works through the 10 NSQHS Standards and is intended to summarise the roles, responsibilities and accountabilities of a governing board of a hospital or day procedure service and highlights the specific criteria and items that are applicable to boards, or where board consideration or action is required. The Guide is designed to assist directors in the industry to understand and comply with their responsibility to retain NSQHS Accreditation.

As operators will already be aware, NSQHS Standard 1 – Governance for Safety and Quality in Health Service Organisations is applicable to the directors of all operators within the industry, whilst Standards 2 to 10 cover more specific situations. Below is a table setting out a summary of information in the Guide relating to NSQHS Standard 1, which serves as an example of the way the Guide has sought to clarify each Standard.

Private Health Facilities Amendment (Fees) Regulation 2015

On 19 June 2015, the above regulation was made to amend the Private Health Facilities Regulation 2010 to increase fees in relation to a private health facility. The key amendments are as follows:

Applications for licence for private health facility – an increase from $6,362 to $6,470

Request for extension of approval in principle for a licence – an increase from $3,242 to $3,297

Annual licence fees as tabled below:

 Written by:
Lucinda Smith | Partner | +61 2 9020 5748 |
Alexandra Adams | Lawyer | +61 2 8248 3466 |
Ben Cosentino | Lawyer | +61 2 8248 3457 |