The federal government believes it has the power to remove pharmacy remuneration and deregulate to allow the charging of uncapped private dispensing fees for hundreds of PBS-listed medicines.
It is now taking this power and moving to formally set aside pharmacy remuneration while introducing an uncapped and unregulated private dispensing fee - it calls an 'administration' fee - for one Section 100 program with the obvious risk it sets a legal precedent and expands to other medicines.
Section 100 of the PBS was established in the 1990s but has significantly evolved from a program originally intended to support the reimbursement and dispensing of medicines in hospitals.
The cost of Section 100 medicines topped $3.8 billion in 2019-20.
It now includes a range of programs covering hundreds of medicines, including Highly-Specialised Drugs, Chemotherapy (cancer medicines), Aboriginal Health Services, the Botulinum Toxin Program, Human Growth Hormone Program, IVF Program and the Opiate Dependence Treatment Program (ODTP).
It derives its name - Section 100 - from that part of the National Health Act 1953 under which the health minister is granted powers to administer these programs.
Section 100 does allow for the making of 'special arrangements' to support the 'efficient and convenient' delivery of the relevant PBS-listed medicines to patients.
In 2010, in changes to Section 100 that partly reflected reforms negotiated in its Memorandum of Understanding with Medicines Australia, the government actually sought to clarify the definition of 'efficient and convenient'.
According to an Explanatory Memorandum, the terms 'efficient and convenient' were clearly defined as reducing unnecessary out-of-pocket costs for patients, reducing the Commonwealth's exposure to unreasonable costs and ensuring adequate remuneration for pharmacy.
The intent of Section 100, as outlined to the parliament in 2010, clearly contradicts the arrangements put on place for the ODTP.
Section 100 special arrangements are intended to ensure appropriate remuneration for pharmacy while protecting patients by ensuring access under similar terms to other medicines - not expose them to uncapped and unregulated private dispensing fees.
They certainly allow for changes that benefit patients or ensure equitable charges for access. This might include the removal of co-payments for medicines delivered through an Aboriginal Health Service. It could also include an option for hospitals to charge only up to the equivalent of the legislated PBS co-payment for the administration of chemotherapy.
It is very hard to see how Section 100 allows for patients to be explicitly disadvantaged through the removal of the protection of PBS co-payments and the safety net in favour of unregulated and uncapped private dispensing fees.
This is particularly true given Section 87 of the National Health Act 1953 says an approved pharmacist or anyone else with the authority to dispense cannot "demand or receive a payment (other than a payment from the Commonwealth) or other valuable consideration in respect of the supply of a pharmaceutical benefit."
Yet this is exactly the situation confronting patients accessing PBS-listed treatment through the ODTP. These ODTP medicines are supplied as 'pharmaceutical benefits' as that is defined in the National Health Act 1953.
These patients are simply denied access to the protection of PBS co-payments and safety-net.
Around 75 per cent of all people accessing the ODTP face private dispensing fees that can exceed $200 per month.
The PBS is designed to prevent these situations - not create them.
There is no legislative instrument governing this program and according to health minister Greg Hunt one is not required.
In a statement issued to BioPharmaDispatch late last week, a spokesperson for Mr Hunt said, "Special Arrangements are made under section 100 of the National Health Act 1953. Special Arrangements are not required to be made as legislative instruments."
It is hard to believe Mr Hunt saw this statement before it was issued. It is wrong and surely he would understand its obvious implication.
The Legislation Act 2003 governs how ministers and their delegates exercise their power. According to that law, an instrument is required when the exercise of power "has the direct or indirect effect of affecting a privilege or interest, imposing an obligation, creating a right, or varying or removing an obligation or right.".
Yet according to Mr Hunt, or whoever wrote his statement, he has the power to set aside pharmacy remuneration and patient access to co-payments and the safety-net for a PBS medicine listed under Section 100 arrangements and, in doing so, allow the application of uncapped and unregulated dispensing fees - all without formally exercising any powers through a legislative instrument and therefore avoiding any parliamentary scrutiny.
In other words, Mr Hunt believes he has the power to effectively deregulate fees for patients accessing Section 100 medicines - an almost $4 billion program.
The government is now all of a sudden and after so many years moving to introduce a legislative instrument that will enforce the current ODTP arrangements.
Mr Hunt said a 'legislative instrument' will ensure 'transparency and clarity'. More likely is that it will give the ODTP some 'lawful' basis because the current ODTP arrangements may not be enforceable.
Arguably, given the lack of a legislative instrument, a patient currently accessing treatment through the ODTP in a community pharmacy setting could refuse to pay the administration fee, demand they be charged the PBS co-payment and that it be recorded against their safety-net.
Another problematic aspect of the move to 'cover' the ODTP with a legislative instrument is that it will entrench what are clearly discriminatory arrangements for a group of Australians the Federal Court found are living with a disability.
It will remove protections the PBS is designed to provide.
There are serious implications for the entire pharmaceutical sector and patients accessing Section 100 medicines.
Mr Hunt is saying he could with the stroke of a pen and without any parliamentary oversight set aside pharmacy remuneration and allow unregulated and uncapped 'administration' fees for any of the hundreds of PBS medicines listed under Section 100.
These medicines include all the cancer therapies, the biologic disease-modifying anti-rheumatic drugs, all the hepatitis C direct-acting anti-virals, treatments for cystic fibrosis, biologics for severe asthma, treatments for spinal muscular atrophy, chronic thromboembolic pulmonary hypertension, pulmonary arterial hypertension and even osteoporosis.
