Justine Elliot (Richmond, Australian Labor Party, Minister for Ageing) Share this | Hansard source

The National Health Amendment (Pharmaceutical and Other Benefits—Cost Recovery) Bill 2008 amends the National Health Act 1953. This is to provide authority for the cost recovery of services provided by the Commonwealth in relation to submissions or amendments to the listing of medicines, vaccines and other products on the Pharmaceutical Benefits Scheme and the National Immunisation Program. These amendments ensure that applicants, mostly pharmaceutical companies, may be charged fees when they seek services provided by the Commonwealth in relation to the exercise of a power by the minister under section 9B of the act, relating to the designation of a vaccine on the National Immunisation Program, or a provision in part VII relating to listings or a change to listings for a medicine or other product on the PBS.

The cost to the government of providing subsidised medicines and fully funded vaccines to the Australian community is significant. In 2006-07, the Commonwealth paid more than $6.4 billion to approved pharmacists, hospitals and medical practitioners for the subsidised supply of medicines under the PBS. A further $280 million was provided by the Commonwealth to the states and territories for the fully funded supply of vaccines under the National Immunisation Program within their respective jurisdictions.

Australian pharmaceutical manufacturers and distributors with medicines or vaccines listed on the PBS and the National Immunisation Program receive considerable financial benefits from the supply of their products to the Australian community. For example, in 2006-07, the top 20 pharmaceutical companies by total cost of payments each received an average of $223 million from the Commonwealth via a PBS subsidy.

The government was in opposition when the previous government sought to introduce cost recovery of services associated with listing on the PBS and the National Immunisation Program. At the time, we shared some of the reservations of some stakeholders about the previous government’s proposal, in particular the possibility that the independence of the Pharmaceutical Benefits Advisory Committee, the PBAC, could be threatened. However, in the model reflected in this bill, the independence of the PBAC is guaranteed. The expertise, integrity and sense of propriety that PBAC members bring to their task will not change as a result of the cost recovery. The PBAC will continue to provide expert advice on medicines independent of government and industry. Cost recovery will not affect the structure or the operation of the PBAC, nor will it compromise the independence of the committee’s decisions.

There are notable examples of agencies, such as the TGA, which regulate in the public interest, where that regulation necessarily results in commercial gain and where cost recovery has been implemented successfully and without a loss of independence. Revenue from PBS cost recovery will depend on the number and type of submissions brought to the PBAC for consideration.

Once the legislation is fully operational, annual revenue from fees is expected to total around $9 million in 2008-09, rising to around $14 million in the following years. The government is committed to ensuring that there is a due process to ensure that fees are levied in a fair and equitable way. Therefore, the regulations will also provide for the review of administrative decisions made in relation to cost recovery. In consultations, there was broad agreement on a simple internal dispute resolution mechanism of negotiation between the parties. It is important to note that the Australian community, beneficiaries of the PBS, will not be required to pay any extra for PBS medicines or vaccines. I thank all the members for their contributions to the debate on this bill.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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