australian pharmacy law & practice

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ISBN 978-0-7295-3916-6

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780729 539166

Australian Pharmacy Law & Practice is the first text of its kind to address pharmacy practice within the Australian legal framework. Covering statutes and legal principles as well as key cases and real-life examples, the authors expertly guide the reader through the professional guidelines and policies that regulate the delivery of pharmacy services.

The introductory chapters provide an important overview of legal concepts, the Australian constitution and the evolution of pharmacy practice and ethics in Australia. The chapters following provide an in-depth examination of pharmacy legislation and regulation and are enhanced by clear learning objectives, further reading lists and review questions for each chapter. Readers thus have an excellent opportunity to consolidate knowledge and test their understanding before moving on to new concepts.

Australian Pharmacy Law & Practice will be an invaluable resource to students and overseas trained pharmacists seeking registration in Australia, as well as to practitioners seeking a better understanding of the laws and standards governing their profession.

FEATURES

● outlines general legal principles and the Australian constitution

● examines legislation covering the registration of pharmacists, pharmacy ownership and professional conduct

● discusses client relationships including privacy, confidentiality, consent and the handling of complaints including investigation, discipline and legal proceedings

● reviews important information on practitioner OH&S issues

● includes the latest information on Medicare and the PBS

John Low PhC, MSHP, Cert4 AWT is a pharmacist and (visiting) Adjunct Associate Professor in the School of Pharmacy and Molecular Sciences, James Cook University

Laetitia Hattingh MPharm, BPharm, GCAppLaw, Cert4 TAA, AACP, PhD is senior lecturer in pharmacy law and practice in the School of Pharmacy, Griffith University

Kim Forrester RN, Cert Intensive Care Nursing, BA, LLB, LLM (Advanced), PhD is a barrister-at-law and Associate Professor in the Faculty of Health Sciences and Medicine, Bond University

AUSTRALIAN PHARMACY LAW& PRACTICEJohn Low Laetitia Hattingh Kim Forrester

AUSTRALIAN PHARMACY LAW& PRACTICEJohn Low Laetitia Hattingh Kim Forrester

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Australian pharmacy law and practice


John LowPhC, MSHP, Cert4 AWT

Laetitia HattinghPhD, MPharm, BPharm, GCAppLaw,

Cert4 TAA, AACP, PhD

Kim ForresterRN, Cert Intensive Care Nursing, BA, LLB, LLM (Advanced), PhD

Sydney Edinburgh London New York Philadelphia St Louis Toronto

Mosbyis an imprint of Elsevier

Elsevier Australia. ACN 001 002 357(a division of Reed International Books Australia Pty Ltd)Tower 1, 475 Victoria Avenue, Chatswood, NSW 2067

© 2010 Elsevier Australia

This publication is copyright. Except as expressly provided in the Copyright Act 1968 and the Copyright Amendment (Digital Agenda) Act 2000, no part of this publication may be reproduced, stored in any retrieval system or transmitted by any means (including electronic, mechanical, microcopying, photocopying, recording or otherwise) without prior written permission from the publisher.

Every attempt has been made to trace and acknowledge copyright, but in some cases this may not have been possible. The publisher apologises for any accidental infringement and would welcome any information to redress the situation.

This publication has been carefully reviewed and checked to ensure that the content is as accurate and current as possible at time of publication. We would recommend, however, that the reader verify any procedures, treatments, drug dosages or legal content described in this book. Neither the author, the contributors, nor the publisher assume any liability for injury and/or damage to persons or property arising from any error in or omission from this publication.

National Library of Australia Cataloguing-in-Publication Data___________________________________________________________________

Low, John.

Australian pharmacy law and practice / John Low, Laetitia Hattingh, Kim Forrester.

ISBN: 978 0 7295 3916 6

Includes index.Bibliography.

Pharmacy--Law and legislation--Australia--Textbooks.Pharmacy--Australia--Textbooks.

Hattingh, Laetitia.Forrester, Kim.

344.940416 ___________________________________________________________________

Publishing Editor: Sunalie SilvaDevelopmental Editor: Meg O’HanlonPublishing Services Manager: Helena Klijn Editorial Coordinator: Lauren AllsopEdited and indexed by Forsyth Publishing ServicesProofread by Maria McGivern Cover and internal design by Trina McDonaldTypeset by TNQ Books & Journals Pvt. Ltd.Printed in Australia by Ligare

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CONTENTSForeword viiPreface ixAuthors xiAcknowledgments xiAbbreviations xii

1 Legal concepts for health professionals 1 2 The evolution of pharmacy practice 17 3 Ethics and professional conduct 29 4 Practice standards and guidelines 41 5 Registration of pharmacists 59 6 Pharmacy ownership 87 7 Investigation, discipline and legal proceedings 95 8 Medicare and the Pharmaceutical Benefi ts Scheme 129 9 Privacy, confi dentiality and consent 147 10 Commonwealth medicine registration and regulation 167 11 State and territory medicines legislation 185 12 Occupational health and safety 209

Index 219

vii

FOREWORDSince the profession of pharmacy was fi rst created centuries ago it has operated in a paradigm of rights and responsibilities. Many of these have been defi ned in legislation or professional standards that continue to evolve to refl ect the changing requirements of both the society and the profession itself. Much of the legislation is concerned with the rights of the members of the profession, including defi ning who can practise as a pharmacist, who can own pharmacies and how certain pharmaceuticals can be sold. This is an attempt to protect the public by ensuring only those persons competent to practise are allowed legally to do so. Other legislation is more generic in nature and refl ects the health environment in which pharmacy is practised. Such legislation relates to the issues of privacy and confi dentiality and occupational health and safety.

Other legislation relates to the processes which pharmacists are required to comply with in their everyday practice, including the dispensing of prescriptions for public subsidy. The practice of pharmacy is, however, not just governed by legislation but also by professional standards and ethics. These are often not even mentioned in any legislation but provide the framework by which the profession judges itself and the performance of its members and can be used in implementation of some of the legislation relating to professional conduct.

This book provides a comprehensive analysis and discussion of the legislation and practice standards which are relevant to the practice of pharmacy. It will be a valuable resource to students and overseas-trained pharmacists seeking registration in Australia, as well as practitioners themselves.

A knowledge and appreciation of all the legislative instruments and professional standards impacting on pharmacy practice is a prerequisite for any pharmacist. However, knowledge itself will not ensure that the public is provided with pharmaceutical services of the highest standard and which will improve their health outcomes. This only comes from an acceptance by the individual pharmacist of the responsibilities which come with being a member of the pharmacy profession and accepting the ideals of the profession. Knowledge is a prerequisite for competence and provides the framework for good practice, but knowledge itself is not suffi cient to be a competent practitioner who makes a positive difference to people’s lives — that requires commitment.

Emeritus Professor Lloyd Sansom AO

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PREFACEThis book seeks to provide an introduction to contemporary pharmacy practice in Australia in the context of the various laws, policies and standards that govern the profession. The authors believe that the book will provide an overview, not only to pharmacy undergraduates, pharmacy interns and pharmacists in all branches of the profession, but also to overseas pharmacists seeking to register and practise in this country or otherwise desiring knowledge of and guidance in Australian pharmacy practice. The last two decades have seen a dramatic expansion in the law and practice content of pharmacy courses in Australia. This growing demand for the inclusion of legal content into the curriculum of pharmacy courses is in response to the demand by pharmacists for knowledge of legal principles and the legislative provisions underpinning their area of practice.

The authors come from a background of pharmacy, nursing and the law, and bring a wide range of clinical and professional experience. The practice experience of the authors includes oncology and critical care, medication review, medical/surgical nursing and coronary care. The authors also bring extensive experience in pharmacy regulation, at both the state and national level. The authors currently teach students in a variety of health disciplines and have used that experience to inform themselves as to the needs of students. While the book is not intended to detail every aspect of Australian pharmacy, the authors believe it provides a comprehensive starting point for practitioners to identify relevant information sources and principles to further advance their knowledge.

The book comprises 12 chapters covering aspects of medicine regulation and pharmacy practice. The authors have intended that each of the chapters stand alone to avoid the reader having to continually refer to other areas of text to follow a particular argument. Such an example occurs in Chapters 10 and 11 where aspects of the scheduling of drugs and poisons is discussed both in regard to Commonwealth medicine registration and regulation and the drugs and poisons legislation of states and territories. Also note that while the authors have tended to use the term ‘medicine’ rather than ‘drug’ when referring to a chemical intended for human or animal therapeutic use, the term ‘drug’ does appear in the text in those circumstances where it is relevant to legislation, or in other instances where the authors consider it more appropriate.

Chapter 1 gives an overview of legal concepts for health professionals which is followed by Chapters 2–4 on aspects of pharmacy practice including its

Preface

x

development and evolution, ethics and professional conduct and the importance of practice standards and guidelines. Chapters 5–7 consider the impact of legislation specifi c to pharmacy practice, covering the registration of pharmacists (including the proposed national registration scheme), pharmacy ownership, and the handling of complaints including investigation, discipline and legal proceedings. Chapter 8 addresses Medicare and the Pharmaceutical Benefi ts Scheme, outlining the structure of the Australian health care system in regard to pharmaceuticals and identifying some limitations of the scheme. This leads into Chapter 9, which discusses legal and professional obligations in regard to privacy, confi dentiality and consent. Chapters 10 and 11 consider medicine regulation from both the Commonwealth and state and territory perspective. Chapter 12 concludes the book by considering occupational health and safety issues in the context of the preparation of medicines of a hazardous nature.

The task of writing this book was not made any easier by the federal system of government in Australia nor by the dynamic nature of pharmacy regulation as characterised by the imminent introduction of national registration for health practitioners. Each government in the federal system (six states, two territories and the federal government) has law-making functions, with the constitution giving the federal government certain enumerated powers. While there has been signifi cant work undertaken by legislators in the last two decades to harmonise state- and territory-based legislation, there still exists a lack of consistency between the states/territories where some legislation is concerned.

The authors were drawn to the subject fi rstly on the basis of need, where the importance of considering pharmacy practice in all its facets in the context of the legal framework was seen as paramount, and secondly by the lack of any similar publication that specifi cally considered the Australian situation.

Finally, we wish to acknowledge and thank all those who have provided assistance. The authors wish to thank Meg O’Hanlon, Helena Klijn and Lauren Allsop from Elsevier Australia. The book is dedicated to Marie Low, Will Hattingh and Julian Pearce. While the legislation is as current as possible when going to press, no statement of the law should be relied upon without verifi cation.

John LowLaetitia Hattingh

Kim Forrester2009

xi

ACKNOWLEDGMENTSThe authors wish to acknowledge the state and territory Pharmacy Registration Boards for their assistance in providing information on investigation, discipline, and legal proceedings.

AUTHORSJohn Low PhC, MSHP, Cert4 AWTJohn Low is a pharmacist with experience in clinical practice, scientifi c publishing and regulatory affairs. John is an Adjunct Associate Professor in the School of Pharmacy and Molecular Sciences, James Cook University, where he is a visiting lecturer in pharmacy ethics and law.

Laetitia Hattingh MPharm, BPharm, GCAppLaw, Cert4 TAA, AACP, PhDLaetitia Hattingh is a senior lecturer in pharmacy law and practice in the School of Pharmacy, Griffi th University. Laetitia has experience in pharmacy regulation and is the author of several publications on this topic. She is accredited to undertake medication reviews.

Kim Forrester RN, Cert Intensive Care Nursing BA, LLB, LLM (Advanced), PhDKim Forrester is a registered nurse and barrister-at-law practising in the area of health law. Kim is the author of several publications is the area of health law. Kim is an Associate Professor in the Faculty of Health Sciences and Medicine at Bond University.

xii

ABBREVIATIONSThe following list includes law reports citations and commonly used abbreviations.

A 2d Atlantic ReporterAC Law Reports, Appeal Cases (UK)ACJ Acting Chief JusticeA Crim R Australian Criminal ReportsAGPS Australian Government Printing ServiceALD Administrative Law DecisionsALJ Australian Law JournalALJR Australian Law Journal ReportsALR Australian Law ReportsAll ER All England Law Reports (UK)ANCI Australian Nursing Council Inc.ATPR Australian Trade Practice ReportsAust Torts Rep Australian Torts ReportsCA Court of AppealCAR Commonwealth Arbitration ReportsCCH Commercial Clearing HouseCh English Reports, Chancery DivisionCJ Chief Justicecl clauseCLR Commonwealth Law ReportsCox CC Cox’s Criminal Cases (UK)Cr App R Criminal Appeal ReportsCrim LR Criminal Law ReviewDCJ District Court JudgeDCR District Court Reports (New South Wales)DLR Dominion Law Reports (Canada)DPP Director of Public ProsecutionsEOC Equal Opportunity CasesEq EquityER English ReportsExch Law Reports, Exchequer Division (UK)Fam LR Family Law ReportsFCA Federal Court of AustraliaFCR Federal Court ReportsFLC Family Law CourtFLR Federal Law ReportsHCA High Court of AustraliaHL House of LordsIR Industrial ReportsJ, JJ Justice/s or Judge/s

xiii

Abbreviations

JA, JJA Judge of Appeal, Judges of AppealJLM Journal of Law and MedicineKB Law Reports, King’s Bench Division (UK)LJ Lord JusticeMedLR Medical Law ReportsMLR Modern Law ReviewMR Master of the RollsNE North Eastern Reports (US)NLJ New Law JournalNSWCA New South Wales Court of AppealNSWDC New South Wales District CourtNSWDCR New South Wales District Court ReportsNSWLR New South Wales Law ReportsNSWPB New South Wales Pharmacy BoardNSWR New South Wales ReportsNSWSC New South Wales Supreme CourtNT Sup Ct Northern Territory Supreme CourtNTR Northern Territory ReportsNW North Western Reporter (US)NZLR New Zealand Law ReportsOR (2d) Ontario Reports, second seriesPa. Super. Ct Pennsylvania Superior CourtP 2d Pacifi c ReporterQB Law Reports, Queen’s Bench Division (UK)QC Queen’s CounselQDC Queensland District CourtQd R Queensland ReportsQSCR Queensland Supreme Court ReportsQSR Queensland State ReportsReg(s) regulation/sRN Registered NurseRPC Reports of Patent Casess, ss section, sectionsSASR South Australian State ReportsSJ Solicitor’s JournalSyd LR Sydney Law ReviewTASSC Tasmanian Supreme CourtVAR Victorian Administrative ReportsVCAT Victorian Civil and Administrative TribunalVLR Victorian Law ReportsVR Victoria ReportsVSC Victorian Supreme CourtVSCA Victoria Supreme Court of AppealWALR Western Australia Law ReportsWAR Western Australia ReportsWASC Western Australia Supreme CourtWLR Weekly Law ReportsWN (NSW) Weekly Notes New South Wales

1

1Legal concepts for health professionals

LEARNING OBJECTIVES Upon completion of this chapter you should be able to:

• identify the sources of law in Australia

• understand how to locate and read an Act

• understand the distinction between criminal and civil law

• understand the signifi cance to the Australian legal system of natural justice, the presumption of innocence and the doctrine of precedent

• understand the operation of the law

• understand how to locate and read a case.

INTRODUCTION The delivery of pharmacy services, as with any health care service, takes place within a legally regulated environment. The law therefore plays a signifi cant role in the day-to-day activities of a pharmacist, whether the practice is conducted in the private or public sectors of health care delivery, whether it is a sole practice, part of a pharmacy group or whether it is within the institutional setting. The very nature of pharmacy practice places the pharmacist in situations where legal issues need to be considered when making decisions about a patient’s or client’s clinical management and care. The provision of services by a pharmacist are therefore based on a framework of common law principles, legislative provisions and professional guidelines and policies which regulate and determine not only the standard of the care but also the rights and obligations of both the pharmacist and their patients or clients. This area of law, referred to as ‘health law’, operates as one of the mechanisms by which pharmacy practice and the provision of individual services by pharmacists is controlled and regulated.

It is fundamental to the provision of a safe and competent service that the pharmacist has an understanding of the relevance of the law to the provision of that service. Within Australia, health law is made up of a range of legal concepts that derive from the common law, civil and criminal law, contract law, the regulation of industrial relations and agreements as well as the statutory arrangements between state, territory and federal governments. The obligations and responsibilities imposed through the federal government’s commitment to international treaties and declarations also impact signifi cantly on the provision of pharmacy services within the Australian context.


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As stated, health law is only one area of the law that governs the conduct of pharmacy practice. It is therefore important for the reader to have an understanding of the Australian legal system as a whole. This chapter will provide an outline of the structures of the Australian legal system, including sources of the law and an overview of the hierarchy of the courts and their processes.

SOURCES OF THE LAW The law is refl ective of the values and attitudes of the particular society in which it exists and, as such, evolves over time. This evolution can be seen if one considers the laws which applied to the provision of pharmacy services in Australia a decade ago and compares them with the current laws under which pharmacists in Australia now practise. The law may be prescriptive, in setting out what is required from a pharmacist in relation to registering to practise, providing a service, managing a business or working as part of a health care team within a health care facility. Simultaneously, the law defi nes what the pharmacist is prohibited from doing in exactly the same situations and circumstances.

The law also determines the consequences that will follow when a pharmacist fails to comply with the requisite legal obligations and requirements. It can confer powers on individuals and groups, such as the power of the pharmacist to legally dispense or supply medications and poisons. The law can also remove or place limits on the powers of individuals or groups. It is evident that the law provides a framework that imposes obligations and bestows rights on individuals, institutions and entities such as corporations. In Australia, the sources of these obligations, responsibilities and rights are to be found in the decisions of the courts, the legislation passed by state, territory or federal parliaments and the provisions of applicable international laws. From these sources the behaviour and standards of practice for health professionals, including pharmacists, are determined and maintained.

There are several different legal systems which operate throughout various countries around the world. As an example, there are countries which function under Islamic law, socialist law or Asian legal systems. Many European countries have a civil system, which was inherited from French or Roman cultures and is based on codes. One of the characteristics of a civil legal system is the inquisitorial nature of the trial process. This means the judge, rather than remaining impartial and making a decision based on the merits of a case argued before the court, will take an active role in investigating the facts and evidence. Unlike many European and Middle Eastern countries, Australia is described as a common law country (See Figure 1.1 ). This resulted from the colonisation of New South Wales by the British, who also operated under a common law system. The Australian legal system, and system of government, were thereby inherited as a function of British colonisation and have continued to develop post-federation into the systems as they exist today. As a common law country there are two sources of law under the Australian system. The fi rst is legislation passed by the parliaments at both the state and federal levels. The second source is the common law that has developed from judicial decisions handed down by the courts.

Legislation — parliamentary law Prior to the formation of the Commonwealth of Australia on 1 January 1901 the self-governing colonies operated independently and passed legislation through their own individual parliaments and, for some, under their own Constitution. The passage

1 Legal concepts for health professionals

3

of the Commonwealth of Australia Constitution Act 1900 (the Constitution) by the British government established the Commonwealth of Australia. The Constitution gave the Commonwealth Parliament the power to make laws either exclusively or concurrently with the states. Under the Constitution, the state parliaments retained their power to make laws as they had done prior to federation, unless the power to make laws about a specifi c matter had been given exclusively to the Commonwealth. Section 107 of the Constitution states:

Saving of Power of State Parliaments Every power of the Parliament of a Colony which has become or becomes a State, shall, unless it is by this Constitution exclusively vested in the Parliament of the Commonwealth or withdrawn from the Parliament of the State, continue as at the establishment of the Commonwealth, or as at the admission or establishment of the State, as the case may be. The Commonwealth Constitution thereby limits and controls the power of

the states to pass legislation. Section 52 of the Constitution identifi es the matters over which the Commonwealth Parliament has exclusive power to pass legislation whereas section 51 grants powers over matters which are not exclusive to the Commonwealth and are thereby shared with the states. These are referred to as ‘concurrent powers’. Under section 51 of the Constitution both the state and Commonwealth parliaments are empowered to pass laws on matters such as trade and commerce with other countries, tax, postal and telegraphic services and under placita 51 xxiiiA ‘ … the provision of … pharmaceutical, sickness and hospital benefi ts, medical and dental services … ’.

Each of the federal, state and territory parliaments, through their individual constitutions, may pass laws for the ‘peace, and good government’ [1] of the jurisdiction.

The federal, state and territory parliaments are therefore empowered to enact legislation, also known as Acts or statutes, for the purpose of regulating certain aspects of society. An Act, passed by the parliament elected by the people, is a primary source of the law and has priority over the common law, which is derived from court decisions. That is, legislation takes precedence over judge-made law (case law) and while it is not the role of the court to make laws where the same subject matter is covered by an Act, it is the role of the court to interpret legislation that is relevant to the determination of the case that is before it. Some states and

Common law legal system

Common law

Civil Criminal

Federal parliament State parliament

State legislationCommonwealthlegislation

Courts

Figure 1.1 Sources of the law


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territories will also have codes which are a complete statement of the law in a particular area. Legislation can be accessed online through the state, territory or Commonwealth government websites.

Prior to a draft Act (statute) being approved by the parliament it is called a Bill. A Bill must be passed by parliament before it is sent to the Governor-General, or Governor, for signature, also known as assent, which generally results in it becoming an Act and having legal force. This will be the case unless the Bill identifi es its own procedure of enactment. That is, it may stipulate that it will not become effective until there is a notice placed by the government in the Government Gazette . The process for enacting legislation is the same in each jurisdiction where a Bill must pass through both the Lower and Upper Houses of parliament. However, in Queensland, there is only one house of parliament through which a Bill must pass.

At Commonwealth, state and territory levels legislation prescribes many of the activities of individual health professionals, professional regulatory authorities, health care facilities and institutions. The legislative provisions that apply to all aspects of the health care industry are therefore regularly amended and updated to keep pace with the current demands and constraints. There are many Acts of parliament at both the state and federal levels which regulate and control the practices of pharmacists and the services provided by them. To give some examples, at the state level, there are statutes that control the registration and regulation of pharmacists, legislation controlling workplace health and safety within a pharmacy practice, and legislation providing avenues for complaints by consumers of pharmacy services. At the federal level the legislation is primarily directed to issues of funding and regulating Commonwealth health care agencies and services.

Delegated legislation An Act of parliament may also delegate the right to make rules, regulations or by-laws to a body or person designated within the Act. This is referred to as ‘delegated legislation’ and is binding on those to whom it applies, as are the legislative provisions of the parent Act. As an example, the pharmacy board in a particular jurisdiction may be delegated powers and functions under the Act which establishes the particular board as a regulatory authority. The Pharmacy Practice Act 2006 (NSW), section 155 empowers the Governor, under that Act to:

(1) … make Regulations not inconsistent with the Act, for or with respect to any matters that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to the Act.

International law Australia, along with many other nations, is a signatory to a number of international declarations, covenants and treaties and is therefore bound to pass domestic legislation that is consistent with the obligations imposed under these international agreements. As an example, the laws in Australia regulating the importation, export and manufacture of medicines and poisons will be consistent with the provisions of declarations and covenants to which the Commonwealth is a signatory. As an example, the Free Trade Agreements between Australia and countries such as New Zealand, Singapore, Thailand, Chile and the United States impact on the terms of exportation and importation of pharmaceutical products.


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STATUTORY INTERPRETATION When reading legislation the focus must be on the actual language used. Examples of words that mandate a particular activity or status include will , shall or must . However, the use of a word such as may indicates a discretionary power. It is important when attempting to interpret an Act that the legislation is read as a whole so as to obtain the context of the words used. Explanatory notes, that sometimes accompany the Act and associated regulations, may also assist in resolving any ambiguity or clarifying the intention of the law. Statutory interpretation is now governed by various state, territory and Commonwealth Interpretation Acts. [2] Section 15AA (1) of the Acts Interpretation Act 1901 (Cth) states:

In the interpretation of a provision of an Act, a construction that would promote the purpose of object underlying the Act (whether that purpose be expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.

Reading an Act While statutory interpretation is a major function of the courts and lawyers it may be of assistance to pharmacists to understand how an Act or regulation is to be read and understood. An Act is referred to by its name, the year it was passed by the parliament and the jurisdiction in which it was passed; for example, Pharmacy Practice Act 2006 (NSW). The Act will also be given a number; for example, the Pharmacy Practice Act 2006 (NSW) no 59 identifi es the order in which the Act is assented to by the Governor or, in the case of Commonwealth legislation, the Governor-General. The date of assent is the date on which the Bill formally completed its passage through the parliament and met the constitutional requirement for becoming an Act. If the date of assent is included it is usually bracketed under the long title. The assent date may be different for the commencement date, which is when the Act becomes law. The long title for the Pharmacy Practice Act 2006 (NSW) states:

An Act to provide for the registration of pharmacists and to regulate pharmacy businesses; to repeal the Pharmacy Act 1964; and for other purposes. The layout of an Act depends on its subject matter. Many Acts are divided into

Parts, which are like chapters in a book. For example, the Pharmacy Practice Act 2006 (NSW) has 158 sections in 12 Parts. The Parts are as follows:

• Part 1 — Preliminary is comprised of sections 1 to 6 and contains the short title, the commencement, object of the Act and defi nitions, notes and the Mutual Recognition law;

• Part 2 — sections 7 to 19 deals with Regulation;

• Part 3 — sections 20 to 35 addresses Practice of Pharmacy and contains:

• Division 1: Conduct of Practice

• Division 2: Control of Pharmacies

• Division 3: Returns and Information

• Part 4 — sections 36 to 75 covers Disciplinary Proceedings and contain:

• Division 1: Interpretation

• Division 2: Complaints

• Division 3: Referral of complaints to Planning Care Assessment Committee


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• Division 4: Dealing with complaint by inquiry at meeting of Board

• Division 5: Disciplinary powers of Board and Tribunal

• Division 6: Powers of Board for protection of public

• Part 5 — sections 76 to 87 deals with Impairment;

• Part 6 — sections 88 to 97 covers Appeals and Review of Disciplinary Action and contains:

• Division 1: Appeals against actions of Board

• Division 2: Appeals against actions of Tribunal

• Division 3: Review of suspension, cancellation or condition

• Part 7 — sections 98 to 104, Pharmacy Board

• Part 8 — sections 105 to 108 deals with the Pharmacy Board Assessment Committee

• Part 9 — sections 109 to 111 covers Impaired Registrants Panel;

• Part 10 — sections 112 to 129, Pharmacy Tribunal contains:

• Division 1: Constitution of Tribunal

• Division 2: Proceedings of Tribunal

• Division 3: Inquiries, appeals etc before Tribunal

• Part 11 — sections 130 to 139 addresses Prohibition Against Directing or Inciting Misconduct

• Part 12 — sections 140 to 158 contains the Miscellaneous provisions. Certain items and prescribed forms may be set out in a list appended to an Act

in the form of Schedules. Sections in the Act will therefore refer to a Schedule effectively incorporating the content of the Schedule into the law. For example, the Pharmacy Practice Act 2006 (NSW), contains seven Schedules.

Regulations One of the last sections in an Act confers on the Governor or Governor-General the power to make regulations that may be necessary for the administration of the Act. Regulations provide the essential details of administration that may change more frequently than the Act can be amended by parliament. Regulations are used to set fees and charges as well as a variety of requirements necessary to enable the daily implementation of the Act. The regulations are called delegated legislation (refer to ‘Delegated legislation’ at p 4). Regulations are drafted usually in the Attorney-General’s Department, advised by the department responsible for administering the Act. The regulations are tabled in parliament but they do not progress through parliament in exactly the same manner as an Act.

Common law The law as it was imposed by England and Wales at the time of colonisation is referred to as common law. In addition to the use of the term to describe a legal system (comprising case law and statute law) it also describes a system of law that developed in the King’s courts from the 10th century through the accumulation of decisions made by judges in cases that came before them. Through the recording of principles and judgments in law reports there developed a body of case law and principles that could be referred to and followed. This practice, of following earlier decisions, is known as the doctrine of precedent and served to provide a level of certainty and predictability in the law.


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In addition to the law, which developed in the common law courts, there is a distinct and separate system of case law referred to as equity. The laws of equity developed at the end of the 13th century when dissatisfaction with the common law courts led to the establishment of the Court of Chancery where legal disputes were resolved on the basis of conscience and equity rather than the rigid rules of the common law courts. While common law and equity remain distinct areas of law, the Australian courts consider both.

Generally, statute law overrides common law and common law prevails when no specifi c statute exists. Both common law and statute law are applied in the courts. In Australia there is a hierarchy of courts within the state and territory jurisdictions and the federal jurisdiction.

TYPES OF LAW There are various methods of classifying the different types of law, one method being to describe law as either substantive or procedural.

Substantive law is the law that regulates citizens in specifi c areas of their lives. This includes industrial law, contract law, criminal law, family law, tort law and even constitutional law. As an example, when a pharmacist enters into a contract with Medicare Australia to provide pharmaceutical benefi ts he or she is entering into a legally binding agreement to which contract law applies. Procedural law governs the way in which laws are implemented and enforced. This would include rules of the courts, rules applied to civil and criminal procedures, and rules of evidence. Were a pharmacist to sue a supplier of products for breach of a contract, it is the procedural law which dictates the evidence required to substantiate that claim and the appropriate legal process and remedies to address the breach.

Another signifi cant distinction of the law is that between civil and criminal law. The common distinguishing features that differentiate civil and criminal jurisdictions include the following:

• Who can bring an action . In civil matters the action involves one citizen; for example, a patient bringing an action against another citizen, such as a pharmacist or the hospital. In criminal matters the action is initiated by the state/territory, in the form of the police or the public prosecutor, against a defendant who has allegedly committed a crime.

• The standard of proof required . In civil law the standard of proof is on the balance of probabilities; and in criminal cases the standard is beyond reasonable doubt.

• The purpose or intention of the two forms of action . Civil law is about compensation for wrongs suffered, and criminal law is about punishing wrongdoers.

THE AUSTRALIAN LEGAL SYSTEM

Adversarial and inquisitorial system One of the functions of the law is to resolve disputes when confl icts arise between individuals, companies and institutions. The resolution of a confl ict can take place through alternate dispute resolution mechanisms or through the court process. If resolution is sought through the courts the case will be brought before a magistrate, judge, or judge and jury with the expectation that the issues in dispute will be resolved and that there will be a declared ‘winner’. This competition between the


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parties that takes place within the courts is referred to as the adversarial process. There are very strict rules as to how this process is conducted and what are the roles, functions and obligations of all those who participate in this process. The role of the judge during court proceedings is to remain impartial and to ensure that the procedural rules are adhered to. The judge or jury will determine the outcome, where only one of the parties to the proceedings will be successful. This is different from the inquisitorial approach where the court may become a participant in the actual process.

The inquisitorial approach of resolving legal disputes is a characteristic of the civil law system practiced in many European countries. Under a civil law system the law is contained in a code (similar to an Act), and a judge may participate in the process of inquiry (which under a common law system is the role of the police and lawyers). The judges in civil law courts are therefore not confi ned to the evidence as put before them by the police and lawyers but may seek out information in their own right to assist them reaching their decision. Within the health care context the operation of the Coroner’s Court would be classifi ed as inquisitorial while cases involving negligent actions will progress in an adversarial manner.

Natural justice Natural justice means that the court or tribunal must give the person, against whom the accusations are made, a clear statement of the actual charge, adequate time to prepare an argument or submission and the right to be heard on all allegations.

In a general sense it ensures that the proceedings are conducted fairly, impartially and without prejudice. Natural justice is a fundamental principle that applies to all courts and tribunals. It is described as making two demands before an individual’s legal rights are adversely affected, or their rightful expectations disappointed; fi rst, to show why any adverse action should not be initiated and, second, that the decision-maker comes to the decision with an open and unbiased mind. [3]

Presumption of innocence The law regards all accused people as being innocent until proven guilty. This is a core principle of the Australian legal system. As an example, in a criminal matter the presumption is that the accused is innocent until proven guilty. In civil proceedings the presumption operates so as not to allocate liability until all of the elements of the action are proven.

The doctrine of precedent ( stare decisis ) In the discussion of common law, mention was made of the role of judges in making law. The word ‘common’ is used to denote the fact that judges have developed a process whereby courts are, to a certain extent, bound to follow decisions they have made previously as well as being bound by decisions made by other judges at the same level of the hierarchy or in senior courts. Judge-made law, or common law, began as a custom that valued the accumulation of judicial wisdom passed on through the ages. In this way a common thread of judicial certainty was maintained despite different judges presiding. Early in the 19th century this custom became enshrined as a doctrine known as stare decisis or the ‘doctrine of precedent’. It allows for some predictability when dealing with legal matters involving courts because one is able to determine the outcomes of similar cases that have occurred before, and estimate the probability of similar judgments being passed.


9

The doctrine of precedent originated in England and over time developed into a sophisticated and historically consistent system of justice. The underlying principle is that if a case is decided in a certain way today then a similar case should be decided in the same way tomorrow. The reason or ground of a judicial decision is called the ratio decidendi . It is the ratio decidendi of a case which makes the decision a precedent in future cases. When the courts hand down their decisions they are to be found in the many law reports that emanate from the state, territory, federal and international jurisdictions. It is important to remember that many cases are not included in the published law reports; however, unreported decisions should be equally regarded as establishing precedent.

All judgments do not bind all courts. Nor are all judges compelled to follow all that has been set down in previous decisions. Precedent can only bind if it comes from a higher court within the same hierarchy. For example, a decision in the Supreme Court of New South Wales is binding upon the District Court in New South Wales and local courts in New South Wales, but it is not binding on the equivalent courts in other states and territories of Australia because they are not in the same court hierarchy. Even so, a lower court in one state or territory would be unlikely to depart from a decision taken in a higher court of another Australian state or territory where the issues are similar.

Australian laws apply only to Australian courts. Australian courts are not bound to follow decisions made in foreign courts; however, they can infl uence decisions taken in Australia. This is sometimes referred to as persuasive precedent. For example, decisions made in other common law countries such as Canada or the United Kingdom may be considered by the Australian courts. Judgments made in English courts are no longer binding on any Australian court.

The court hierarchy The Australian court system is structured hierarchically so as to delineate the extent of authority and the jurisdictional limits of each court. The jurisdiction of any court or tribunal gives the lawful authority to adjudicate or decide on an action, suit, petition or application brought before it. Jurisdictional power varies according to the seriousness of the offence, the amount of compensation that can be awarded, the nationality or place of residence of the parties, whether the matters are criminal or civil in nature, or even when and where the offence or event occurred.

Original and appellate jurisdiction When a matter fi rst arises, the court in which it is heard has what is known as original jurisdiction . Before a decision may be appealed in another court the dissatisfi ed party must be able to establish appropriate grounds. If this is established the subsequent court will be exercising its appellate jurisdiction. A decision may be the subject of an appeal in certain circumstances including: when a judge has misdirected a jury, made an error in relation to admitting or refusing to admit evidence, or there is an issue as to the severity or leniency of the sentence. For example, the District or County Court may hear a matter and, if a party appeals that decision, the Supreme Court will hear the matter using its appellate jurisdiction. Appellate jurisdiction is restricted to the superior courts including the District/County Court, Supreme Court, Federal Court, Family Court and High Court. In relation to the High Court, special leave (permission) must be sought before it will exercise its appellate jurisdiction. Figure 1.2 provides an overview of the court hierarchy, to illustrate the differences in both structure and jurisdiction of the courts in the hierarchy.


10

Magistrates’ Courts Magistrates’ Courts or local courts are presided over by magistrates who are addressed during the proceedings as ‘Your Worship’ or ‘Your Honour’. Magistrates sit alone as there are no juries at this level in the court structure. The jurisdiction of the Magistrates’ Courts is determined by the relevant legislation in each of the states

Full High CourtHigh Court

Full Court of theFederal Court

State SupremeCourts

Full Court /Court of AppealState SupremeCourts

State IntermediateCourts (County orDistricts Courts)

State Tribunals(e.g. ProfessionalDisciplinaryTribunals)

State Minor Courts(Local Courts,Magistrates’Courts or Courtsof SummaryJurisdictions,Coroners’ Courts

Full Court of Family Court

Family Court of Australia

Federal Court of Australia

Federal Tribunals

Territory SupremeCourts

Local Courts inTerritories

Court of Appeal ofTerritory SupremeCourt

Figure 1.2 Federal, state and territory court hierarchy


11

and territories. These courts are the lowest courts in the hierarchy and determine the greatest volume of cases. As a general principle Magistrates’ Courts deal with minor civil and criminal matters, and with more serious criminal matters by way of committal proceedings. It is from this level of the hierarchy that magistrates are appointed as coroners or preside over Children’s Courts and Licensing Courts. These courts developed in response to the need to reduce the load from the Magistrates’ Courts and in recognition of the requirement for specialist knowledge.

District Courts District Courts or County Courts (the latter being the name given to courts at this level in hierarchy in Victoria) are presided over by judges who sit with or without a jury. Their jurisdiction is both original and appellate. District Courts hear and determine civil and criminal matters that are governed by the relevant legislation in each of the states and territories. As a general statement all criminal matters other than murder, manslaughter and serious sexual assault will be heard in District or County Courts.

Supreme Courts Supreme Courts are the most senior courts in the states and territories and are presided over by a judge, with or without a jury. Supreme Courts have an internal appeal mechanism referred to as the Full Court of the Supreme Court or Court of Appeal. This is where the court will hear an appeal from the Supreme Court sitting in its original jurisdiction. That is, hearing the matter for the fi rst time. When the court is sitting as the Full Court the Court of Appeal there are three or more judges. While the jurisdictional limitations are determined by the relevant legislation in each of the states and territories, in civil matters Supreme Courts may hear claims for unlimited damages and, in the criminal jurisdiction, charges of murder, manslaughter and serious sexual assault.

The High Court The High Court was established under the Constitution of the Commonwealth of Australia and comprises the Chief Justice and six other judges. The Australia Act 1986 (Cth), passed concurrently with the same Act in the United Kingdom, established the High Court in Australia as the fi nal Court of Appeal for both federal and state courts. The original jurisdiction of the High Court concerns any matters that involve interpretation of the Constitution of the Commonwealth of Australia, or disputes between residents of different states/territories, or between states/territories and the Commonwealth government.

Provided leave has been obtained, appeals to the High Court of Australia can come from the Federal Court, the Family Court, and the Supreme Court of any state or territory involving civil or criminal matters. The Full Bench of the High Court, comprising all seven Justices, hears cases in which the principles are of major public importance, involve interpretation of the Constitution or invite departure from a previous decision of the High Court. Appeals from state and territory Supreme Court decisions, and from decisions of the Family Court, will be dealt with by the Full Court of not less than two Justices. A single Justice may hear and determine specifi ed matters.

The Federal Court The Federal Court of Australia was established under the Federal Court of Australia Act 1976 (Cth). This court was set up to further reduce the load on the High Court. Constitutional cases involving such matters as trade practices, bankruptcy


12

and federal industrial disputes are heard. Appeals on decisions can be made to the High Court or the Full Court of the Federal Court.

The Federal Magistrates’ Court was established in 2000 to deal with less complex matters than would otherwise have been heard in the Federal or Family Courts. The range of cases coming before the Federal Magistrates’ Court include matters relating to bankruptcy, discrimination, privacy and family law. This court does not hear appeals.

Specialist tribunals Specialist tribunals may be established under Commonwealth or state/territory laws to exercise specifi c jurisdictions and perform functions similar to that of the courts. The number and type of tribunals are increasing as government regulation of society becomes more complicated. In many jurisdictions the tribunals are being amalgamated; for example, the Queensland Civil and Administrative Tribunal. Tribunals are established by statutes for different purposes and therefore their powers and composition vary greatly. Examples of tribunals include professional regulatory tribunals, administrative appeals tribunals, tenancy tribunals and small claims tribunals. These tribunals perform ‘quasi judicial’ functions in that they make decisions within the ambit of their limited or specifi c roles. Decisions are made in a variety of ways and may involve a judge or, alternatively, a board of specialists not qualifi ed in law. Unlike the courts, the tribunals do not make laws that are applied by the courts. While tribunals lie outside the court hierarchy, appeals may be made from their decisions into the court system if permitted under legislation. Often the role of tribunals is limited and narrowly defi ned.

CASE REFERENCES It is important for pharmacists to understand how to read judicial decisions as contained in the various law reports. Previously, cases were written up and reported in books that were most frequently held in law libraries. However, many of the sources of law, such as case reports and statutes, are now stored electronically and are more easily accessible. There are a wide range of databases which facilitate access to legal materials. In Australia, the Australian Legal Information Institute, also referred to as AusLII, makes all Australian case law and legislation freely available. The following information provides an overview of the elements of a case reference to assist in the reading and understanding of cases. For example:

Qidwai v Brown [1984] 1 NSWLR 100 This citation provides information on the name of the case and the location of

the full court report. This refers only to published law reports of which there is a wide range available in higher court jurisdictions.

• [1984] refers to the year the case was reported. If the year is in round brackets, for example (1984) 1 NSWLR, it would indicate that the volume number, and not the year, is the essential identifying feature of the citation. When the year is in square brackets it indicates that the year is the important identifying feature of the report and that the volume number is not essential, and may not even be present. When more than one volume is published in a particular year the volumes in that year will be numbered.

• 1 refers to the volume number of the law report.

• NSWLR is the abbreviation for the New South Wales Law Reports series containing the report on the case of Qidwai v Brown .

• 100 refers to the page reference for the beginning of the case report. Commonly used law reports are abbreviated in the table at the beginning of the book.


13

As stated above, cases may also be found online via the world wide web (www) or on CD-ROM or disc. The expansion of cases capable of being stored on electronic databases has resulted in unreported cases (those decisions that were not included in the printed volumes of the law reports) now being available. As an example, the unreported case of Adamson v Pharmacy Board of Tasmania [2004] TASSC 32 is able to be located on AustLII and a number of other legal databases. It is to be noted that the format of web-based and online databases differs from that of the traditional paper-based law reports.

Law reports For a health professional to understand the common law principles that apply to their practice it is necessary to have the skills to read a case as reported. Figure 1.3 provides an overview of the features of the case of Qidwai v Brown [1984] 1 NSWLR 100.

QIDWAI V BROWN

Court of Appeal: Hutley, Samuels and Priestley JJA21 February; 14 March 1984

Medicine -- Medical practitioners -- Misconduct in professional respect --Test for -- Proof of professional reprobation required -- Departurefrom norm not sufficient -- Appendectomy on day-stay basis -- MedicalPractitioners Act 1938, s 27(1)(c).

Held : (1) The test to determine whether there has been "misconduct in aprofessional respect" within the Medical Practitioners Act 1938, s 27(1)(c), requiresproof that there have been departures from accepted procedures and that thosedepartures have been subject to professional reprobation by fellow practitioners ofgood repute and competence. (101E, 102G, 105C)

Ex parte Meehan; Re Medical Practitioners Act [1965] NSWR 30, adopted andapplied.

(2) A departure from accepted procedures may be unusual and may be the subjectof doubt or difference of opinion in the profession without necessarily amounting tomisconduct in a professional respect. (102E-F, 102G, 105C)

(3) Conducting an appendectomy in 1980 on a day-stay basis in private consultingrooms had not been proved to be professional misconduct. (102C, 122G, 107AC)

CASES CITED

The following cases are cited in the judgments:Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation [1983] 1 NSWLR 1.Browne v Dunn (1894) 6 R 67.Keene, Ex parte (1926) 26 SR (NSW) 463; 43 WN 136.Meehan, Ex parte: Re Medical Practitioners Act [1965] NSWR 30.R v General Medical Council [1930] 1 KB 562. Taxation, Federal Commissioner of v Whitfords Beach Pty Ltd (1982) 56 ALJR 240; 39ALR 521.

APPEAL

This was an appeal against the findings of the Medical DisciplinaryTribunal by which the appellant was found guilty of misconduct…

Figure 1.3 Law report headnote of Qidwai v Brown [1984] 1NSWLR 100


14

As this is an appeal from the fi ndings of the Medical Disciplinary Tribunal to the Court of Appeal of the New South Wales Supreme Court, Qidwai is the appellant and Brown is the respondent. The letter ‘v’ between the names of the parties is the abbreviation of the Latin word versus and signifi es that the parties are against one another in the process of litigation. Directly beneath the names of the parties is the court in which the case was decided. That being the Court of Appeal. Below the court title are the names of the Justices before whom the case was heard, being Hutley, Samuels and Priestley JJA.

Next appear directly below words or phrases that are written in italics. These are the catchwords considered to be the important aspects of the case. In this case:

Medicine — Medical practitioner — Misconduct in a professional respect — Test for — Proof of professional reprobation required — Departure from norm not suffi cient — Appendectomy on day-stay basis — Medical Practitioners Act 1938, s 27 (1)(c). The following section is referred to as the ‘headnote’ which is a summary of

the case. Though there is no case summary provided in the report in Qidwai , the headnote would generally contain the facts of the case which the reporter, responsible for providing the headnote to the publisher, regarded as important to that decision. It is essential for a comprehensive understanding of a case, that the entire judgment (and not just the headnote) is read. A list of cases that the court considered in reaching its decision are provided below the headnote. As Qidwai is an appeal, the last court or tribunal that decided the case is referred to next. In this case it was the Medical Disciplinary Tribunal where the appellant was found guilty of misconduct in a professional respect and reprimanded. The decision of the court, indicated by the word ‘Held’, contains the ratio decidendi . A summary of the fi ndings of each of the judges who heard and determined the case is also provided. This may appear as separate reasons as delivered by each of the Justices or, where there is agreement (where they concur), two or more Justices may hand down a joint decision. At the end of the written determination the ‘orders’ (the judge’s fi nal decision) handed down by the court will be reported.

As can be seen from Figure 1.4 , while the formatting of web-based case reports may differ from the previous paper-based law reports, the information provided is essentially the same. The wide range of electronically based legal resources now available facilitates greater access to, and understanding of, the law. Knowledge of the Australian legal system and the legislation and case law that regulates the provision of pharmacy practise is essential to the provision of safe and competent pharmacy services.


15

[2004] TASSC 82

CITATION: Adamson v The Pharmacy Board of Tasmania (No 2) [2004] TASSC 82

PARTIES: ADAMSON, Thomas Dixon vPHARMACY BOARD OF TASMANIA (THE)

TITLE OF COURT: SUPREME COURT OF TASMANIA

JURISDICTION: APPELLATE

FILE NO/S: LCA 116/2003

DELIVERED ON: 16 August 2004

DELIVERED AT: Hobart

HEARING DATES: 16 February, 26 March, 8 April, 5, 26 May,26 July, 10 August 2004

JUDGMENT OF: Evans J

CATCHWORDS:

Professions and Trades – Medical and related professions – Pharmaceutical chemists – Discipline and removalfrom Register – Professional misconduct – Unprofessional conduct – Distinction – Erroneousdispensing.

Pharmacists Registration Act 2001 (Tas).

The Matter of S76 Legal Practitioners Act 1959 and inthe Matter of Four Legal Practitioners C2/1987; TheLaw Society of Tasmania v J B Walker, D B Walker and J R Hurburgh A56/1988; Law Society of Tasmania vTurner and Kench (2001) 11 Tas R 1; Chamberlain v Law Society of The Australian Capital Territory (1993)118 ALR 54, referred to.Aust Digest Professions and Trades [220]

REPRESENTATION:

Counsel:

Appellant: M E O'FarrellRespondent: N Sweeney

Solicitors:

Appellant: Toomey Manning & Co Respondent: Page Seager

Judgment Number: [2004] TASSC 82 Number of Paragraphs: 23

Figure 1.4 Adamson v The Pharmacy Board of Tasmania (No 2) [2004] TASSC 82 (16 August 2004)


16

Further reading Carvan J . Understanding the Australian Legal System ( 5th edn ). Law Book Co , Sydney ,

2005 Chisholm R , Nettheim G . Understanding Law: an Introduction to Australia’s Legal System

( 6th edn ). Butterworths , Sydney , 2002 Hinchy R . The Australian Legal System: History, Institutions and Method . Pearson

Education Australia , Sydney , 2008

Endnotes 1 Australia Act 1986 2 Acts Interpretation Act 1901 (Cth); Interpretation Act 1987 (NSW); Interpretation

of Legislation Act 1984 (Vic); Acts Interpretation Act 1915 (SA); Interpretation Act 1984 (WA); Interpretation Act 1967 (ACT); Acts Interpretation Act 1954 (Qld)

3 Forbes JRS. Justice in Tribunals (2nd edn). The Federation Press, Sydney, 2006: 100

REVIEW QUESTIONS AND ACTIVITIES

1 Find an Act of parliament relevant to pharmacy practice. The Act could be state, territory or Commonwealth. Identify the name of the Act, the long title, the year the Act was passed, the purpose or function of the Act and the extent of any delegation of power (if contained in the Act you have chosen).

2 Identify the court structure in your jurisdiction. 3 Identify and name your professional regulatory legislation. 4 What right of appeal exists from a decision of your professional disciplinary

tribunal or board? To which court is such an appeal made? 5 Find one of the following pharmacy-related cases:

Garrett v Beran [2000] NSWSC 864 Awad v Health Care Complaints Commission [2006] NSWSC 698 Adamson v Pharmacy Board of Tasmania [2004] TASSC 32. Identify the parties, the court in which the proceedings were conducted, the basis for the legal action, and the outcome.

6 Distinguish civil from criminal proceedings. 7 What do you understand by the term ‘the doctrine of precedent’? 8 What is the difference between common law and statutory law?

129

8Medicare and the Pharmaceutical

Benefi ts Scheme

LEARNING OBJECTIVES Upon completion of this chapter you should be able to:

• understand the structure of the Australian health care system in regard to the supply of pharmaceuticals

• identify the impact of the Pharmaceutical Benefi ts Scheme on health care

• explain the criteria applicable to the provision of pharmaceutical benefi ts

• identify the limitations of the Pharmaceutical Benefi ts Scheme

• understand the concept of generic substitution

• understand the signifi cance of the Health Insurance Act 1973 (Cth) with regard to Medicare.

INTRODUCTION — THE HEALTH CARE SYSTEM The Australian health care system is the product of a diverse range of economic, social, technological, legal, constitutional and political factors, some of which are unique to Australia. However, many of the characteristics of the system have been derived from other countries. The inevitable British infl uence continued to be highly signifi cant in determining many aspects of the way health services were organised post World War II, when there was considerable opposition from the medical profession and other groups to following the British in introducing a national health service. The voluntary health insurance arrangements introduced in 1953 were based, in part, on similar systems that had become the dominant method of paying for health care in the United States of America.

The Canadian model of universal, taxation-funded health insurance formed the core of the Medibank scheme that commenced in 1975. After an early demise of the system in the late 1970s it was subsequently resurrected in 1984 under the title of Medicare. The tendency to look to North America as the source of technology, funding and organisational initiatives, and the inspiration for new policies has continued up to the present time.

Any health care system will have an impact on the wider social system. Medicare, Australia’s national health insurance scheme, is designed to ensure that all persons have equal access to care in a public health system. This means that


130

all Australians have a stake in ensuring that the public health system functions effectively and thus Medicare can be seen as contributing to social cohesion and solidarity.

The following are the main features of Australia’s health system: [1]

• universal access to benefi ts for privately provided medical services under Medicare, which is largely funded by the Australian Government, with co-payments by users when services are not bulk-billed

• eligibility for public hospital services, free at the point of service, funded jointly by the states and territories and the Australian Government

• private hospital activity largely funded by private health insurance, which in turn is subsidised by the Australian Government through the 30% rebates on members’ contributions to private health insurance

• the Australian Government, through its Pharmaceutical Benefi ts Scheme (PBS) and Repatriation Pharmaceutical Benefi ts Scheme (RPBS), subsidises a wide range of pharmaceuticals and also funds a wide range of services for eligible veterans

• the Australian Government provides most of the funding for health research

• state and territory health authorities are primarily responsible for the operation of public hospitals, mental health programs, the transport of patients, community health services, and public health services such as health promotion and illness prevention

• individuals primarily spend money on medications, dental services, aids and appliances, medical services, other health practitioner services and private hospitals. Medicare is designed to ensure that all Australians have equal access to care

in a publicly funded system. Medicare Australia works in partnership with the Department of Health and Ageing to achieve the Australian Government’s health policy objectives. It is a prescribed agency under the Financial Management and Accountability Act 1997 (Cth) and is a statutory agency under the Public Service Act 1999 (Cth), within the Department of Human Services.

THE PHARMACEUTICAL AND REPATRIATION PHARMACEUTICAL BENEFITS SCHEMES The PBS and the RPBS are key components of the Australian health system, facilitating access to a large number of prescribed medicines through government subsidy of the cost. They form an integral part of Australia’s National Medicines Policy 2000 and the implementation of quality use of medicines as discussed in Chapter 2.

The PBS provides Australian residents, and eligible overseas visitors from countries with whom Australia has a reciprocal health care agreement, with subsidised access to approved medicines at an affordable price. At the time of writing reciprocal agreements were in place with nine countries, namely: Finland; Italy; Malta; New Zealand; Norway; Republic of Ireland; Sweden; the Netherlands; and the United Kingdom. The medicines are funded, either partially or wholly, by the Commonwealth Government. The PBS is regulated by the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth), under Part VII of the National Health Act 1953 (Cth). The National Health Act 1953 (Cth) applies to

8 Medicare and the Pharmaceutical Benefi ts Scheme

131

the provision of pharmaceutical, sickness and hospital benefi ts, and of medical and dental services in Australia. Ministerial determinations and rules that apply to the PBS are periodically released to address specifi c issues.

The RPBS is subsidised by the Department of Veterans’ Affairs (DVA) through the Veterans’ Entitlements Act 1986 (Cth). The RPBS provides pharmaceutical benefi ts for veterans and eligible dependants. The range of medicines and dressings available through the RPBS is more comprehensive than those available through the PBS.

Both the PBS and RPBS are administered by Medicare Australia.

HISTORY OF THE PBS AND RPBS The following is a very brief overview of the history of the PBS and RPBS, with more detailed information available through the Parliamentary library. [2] The RPBS was established in 1919 for war veterans. A similar scheme for non-veterans was proposed in 1944 through the passing of the Pharmaceutical Benefi ts Act 1944 (Cth). However, the Australian Branch of the British Medical Association challenged the Act and the High Court declared the Act unconstitutional as its provisions went beyond the powers of the Commonwealth.

A subsequent change to the Constitution in 1946 enabled the Commonwealth Government to provide pharmaceutical benefi ts. A new Pharmaceutical Benefi ts Act 1947 (Cth) was passed but was again declared unconstitutional and only a few doctors participated on a voluntary basis. In 1950 a scheme was introduced under the Act to provide a list of 139 ‘life saving and disease preventing drugs’ free of charge to the whole community. The PBS was introduced on 1 March 1960 following the promulgation of the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth).

Listing steps Once a medicine has been approved by the Therapeutic Goods Administration (TGA) to be included in the Australian Register of Therapeutic Goods, an application may be submitted to the Department of Health and Ageing for listing on the PBS. The Pharmaceutical Benefi ts Advisory Committee (PBAC), an independent statutory body under section 101 of the National Health Act 1953 (Cth), assesses applications for listing on the PBS based on comparative safety, effi cacy, cost-effectiveness and clinical information. The membership of PBAC is prescribed in the National Health Act 1953 (Cth), with members being appointed by the Federal Minister for Health. In the case of RPBS items, the recommendations are made by the Repatriation Pharmaceutical Reference Committee (RPRC).

The PBAC considers submissions from industry sponsors, manufacturers, medical bodies, health professionals, private individuals and their representatives. The PBAC makes recommendations and gives advice to the Federal Minister for Health about which medicines should be made available as pharmaceutical benefi ts, the maximum quantities and repeats, and may also recommend restrictions. Box 8.1 lists the main roles of the PBAC. [3]

Under the National Health Act 1953 (Cth), the PBAC established two sub-committees to help perform its functions. These are the Drugs Utilisation Sub-Committee (DUSC) and the Economics Sub-Committee (ESC). The DUSC was formed by the PBAC in 1988 and monitors the patterns and trends of medicines


132

used through the PBS. The ESC was formed by the PBAC in 1994 and advises on both cost-effective policies and evaluations of cost-effective aspects of major submissions.

Listed medicines are classifi ed as either:

• pharmaceutical benefi ts under section 85 of the National Health Act 1953 (Cth)

• special pharmaceutical products under section 100 of the National Health Act 1953 (Cth), requiring special distribution requirements, or

• vaccines, listed in the National Immunisation Program (NIP) under section 9C of the Act.

The PBAC makes recommendations about the maximum quantity and the number of repeats that should be available for each item. As a general rule, the maximum quantity to treat acute medical conditions is usually a single pack size (depending on the manufacturer’s packaging). For chronic medical conditions, the maximum quantity and repeats usually allows for up to 6 months’ therapy. As of 1 November 2008, this period has been extended to 12 months for the treatment of certain chronic conditions. An authority system makes provision for patients requiring some high cost drugs, higher than average doses for approved medicines, increases in the listed maximum quantities and/or additional repeats.

When recommending listings, the PBAC provides advice to the Pharmaceutical Benefi ts Pricing Authority (PBPA) comparing therapeutic outcomes and price considerations. The aim of these comparisons is to determine the cost-effectiveness of pharmaceutical benefi ts. In addition, the PBPA, following negotiations, makes recommendations as to a ceiling price or price range for an item.

Public Summary Documents (PSDs) are published following PBAC meetings to improve the transparency of the listing process. These documents provide information about recommendations so that stakeholders are aware of the rationale for specifi c recommendations and gain an improved understanding of the overall PBS listing process. The availability of PSDs is the result of initiatives under the Australian – United States Free Trade Agreement (AUSFTA). In a further attempt to increase transparency, the release of PBAC agendas in advance of meetings was introduced mid-2008.

Box 8.1 Roles of the Pharmaceutical Benefi ts Advisory Committee

• Recommends medicines and medicinal preparations to the Minister for Health for funding under the PBS.

• Recommends vaccines for funding under the National Immunisation Program (NIP) (since 2006).

• Advises the Minister and the Pharmaceutical Benefi ts Pricing Authority (PBPA) about cost-effectiveness.

• Recommends maximum quantities and repeats on the basis of community use, and any restrictions on the indications where PBS subsidy is available.

• Regularly reviews the list of PBS items. • Advises the Minister about any other matters relating to the PBS.


133

The schedules The PBS and RPBS Schedules list all medicines that are available to be dispensed by approved pharmacists or other eligible suppliers at a government-subsidised price. As of 1 December 2006, the Schedules are available online.

Three categories of benefi ts apply, namely: 1 Unrestricted benefi ts that have no restrictions on their therapeutic uses for the

purpose of the subsidy. 2 Restricted benefi ts that can only be prescribed as pharmaceutical benefi ts for

specifi c indications. 3 Authority Required benefi ts that can only be prescribed if they satisfy one

of two categories: (1) Authority Required and (2) Authority Required (STREAMLINED). The process through which an Authority Required prescription can be prescribed depends on the category.

(i) Authority Required items must be approved by Medicare Australia or DVA prior to supply of items listed as an Authority Required. These authorities apply when medical grounds exist for exemption from a Therapeutic Group Premium or Special Patient Contribution or for medicines prescribed above approved quantities or number of repeats. The prescriber must follow a telephone or written approval process in these cases.

(ii) Authority Required (STREAMLINED) commenced on 1 July 2007 for listed items that do not require prior approval from Medicare Australia or DVA. This applies to medicines for the treatment of chronic conditions where the patient and prescriber are familiar with the condition and medicine.

Some items are listed for more than one condition and more than one type of benefi t may apply.

A palliative care section provides for increased repeats of certain medicines for palliative care patients. A palliative care patient is defi ned as ‘A patient with an active, progressive, far-advanced disease for whom the prognosis is limited and the focus of care is the quality of life’. [4]

Section 100 programs Section 100 of the National Health Act 1953 (Cth) provides for alternative supply arrangements when the supply through community pharmacies is unsuitable. Reasons for these alternative supply methods include the cost of storage, requirements for particular controls over dispensing, the need for medical supervision during administration/treatment or constraints on patient access to community pharmacies. These alternative supply arrangements include the following programs:

• The Highly Specialised Drugs Program subsidises the use of highly specialised drugs through public and private hospital outpatient departments for community patients whose treatment is not appropriate for a community medical practice setting. The medicines concerned are used for chronic conditions that require access to appropriate specialist facilities. To prescribe the medicines as pharmaceutical benefi t items medical practitioners are required to be affi liated with the specialist hospital units. A general practitioner or non-specialist hospital doctor may only


134

prescribe the medicines as pharmaceutical benefi ts for maintenance therapy under the guidance of the treating specialist.

• The Opiate Dependence Treatment Program funds the cost of buprenorphine, buprenorphine with naloxone and methadone through clinics and pharmacies approved by state and territory governments.

Also included under Section 100 programs are the:

• Botulinum Toxin Program

• Human Hormone Growth Program

• In vitro fertilisation (IVF)/GIFT Program

• Special Authority Program. The Support Allowance Program (negotiated under the Fourth Community

Pharmacy Agreement) enables participating pharmacists with subsidised medicines to provide a range of services to support eligible remote area Aboriginal Health Services. (Community Pharmacy Agreements are covered later in this chapter.)

PBS AND RPBS PRESCRIBING At the time of writing, pharmaceutical benefi ts may be prescribed by doctors, dentists and optometrists who are approved to prescribe within the PBS. However, discussions have been initiated to enable nurse practitioners and pharmacists to prescribe certain PBS items. Prescribers need a prescriber number, issued by Medicare Australia.

Dentists may prescribe from the Dental Schedule for dental treatment only. As of 1 January 2008, optometrists accredited to prescribe under state or territory legislation (authorised optometrists) can apply for approval as PBS prescribers. Authorised optometrists have a separate Optometrical Schedule from which they may prescribe eye care medicines.

Prescribers need to follow state and territory legislation when prescribing PBS medicines. The list of medicines that may be prescribed under state and territory drugs and poisons legislation may differ from the list of pharmaceutical benefi ts that may be claimed for under the PBS or RPBS. For example, in Queensland the list of medicines that approved optometrists may prescribe in terms of the Health (Drugs and Poisons) Regulation 1996 differs substantially from the PBS list for authorised optometrists. Similar differences apply to dentists and to a lesser extent doctors. It is therefore important that prescribers ensure that prescriptions written under the PBS fall within the limits of their respective state or territory legislative requirements.

The prescriber should indicate whether a subsidy applies by either marking the PBS or RPBS box on the prescription. Regulation 19 of the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth) provides details about prescription requirements. To be valid, paper-based prescriptions (handwritten or computer generated) must be provided to patients in duplicate. A prescription may only be written for the treatment of one person with up to three pharmaceutical benefi t items, except for authority and optometrist items that must be written on individual forms. Pharmaceutical benefi ts and non-pharmaceutical benefi ts should not be listed together. However, there are separate arrangements for prescriptions in public hospitals that participate in the public sector pharmaceutical reforms.

New rules were introduced in November 2008 to enable prescribers to write repeat prescriptions for up to 12 months for certain medicines subject to certain criteria being met. The criteria for prescribing under this ruling are that the patient


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has a stable chronic condition and is under the care of a general practitioner and continues to have regular reviews.

APPROVED SUPPLIERS The supply of pharmaceutical benefi ts is provided under sections 85 to 98 of the National Health Act 1953 (Cth), which also permits the Federal Health Minister to make certain determinations regarding supply arrangements.

Pharmaceutical benefi ts are mainly supplied by ‘approved pharmacists’ under section 90 of the Act. Section 4 defi nes a pharmacist as:

[A] person registered as a pharmacist or pharmaceutical chemist under a law of a state or territory providing for the registration of pharmacists or pharmaceutical chemists, and includes a friendly society or other body of persons (whether corporate or unincorporate) carrying on business as a pharmacist. Under this defi nition friendly society pharmacies qualify to supply pharmaceutical

benefi ts as a pharmacist. An approved pharmacist is a person approved by the secretary (or delegate) to the Department of Health to carry on business from a designated premises under the scheme. Approved pharmacists are approved to supply pharmaceutical benefi ts only from a particular pharmacy. The approved pharmacist is entitled to be paid an amount determined by the Health Minister for the provision of the pharmaceutical benefi t.

Applications for approval are referred to the Australian Community Pharmacy Authority (ACPA), an independent statutory body under section 99J of the National Health Act 1953 (Cth). The role of the ACPA is to consider applications for approval to supply pharmaceutical benefi ts under section 90 of the Act and to make recommendations to Medicare Australia.

In making recommendations, the ACPA must comply with the requirements specifi ed in a determination made by the Minister for Health and Ageing under section 99L of the National Health Act 1953 (Cth). The determination currently in force is titled the National Health (Australian Community Pharmacy Authority Rules) Determination 2006, and is referred to as the ‘pharmacy location rules’. These rules prescribe location-based criteria that must be satisfi ed in order to establish a new pharmacy or relocate an existing pharmacy.

In terms of the National Health (Pharmaceutical Benefi ts) (Conditions of Approval for Approved Pharmacists) Determination 2007 (No PB 42 of 2007), approved pharmacists are required to comply with the Pharmaceutical Society of Australia’s Code of Professional Conduct and Professional Practice Standards.

Other suppliers include approved doctors, usually practising in isolated areas under section 92, and approved hospitals under section 94, except public hospitals participating in pharmaceutical reforms (refer to Public Hospital Pharmaceutical Reforms below). All suppliers are issued with an approval number by Medicare Australia. Certain pharmaceutical benefi ts may be provided without charge to doctors who may supply them free to patients for emergency use (doctor’s bag).

DISPENSING PBS AND RPBS PRESCRIPTIONS Community pharmacies are the principal means, under current health service delivery arrangements through the PBS and RPBS, by which patients are able to access prescribed medicines. The dispensing of PBS and RPBS medicines is therefore one of the main responsibilities in pharmacy practice.


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Section 89 of the National Health Act 1953 (Cth) specifi es that a person cannot receive a pharmaceutical benefi t unless it is supplied by an approved pharmacist on presentation of a prescription written in accordance with the Act. For dispensing a PBS or RPBS medicine, an approved pharmacist receives a mark-up on the price of the medicine as well as a dispensing fee which is reviewed at least annually. Pharmacists get additional reimbursement for supplying extemporaneously prepared products. For an extemporaneous preparation to qualify as a PBS medicine all the ingredients must be listed in the drug tariff section of the Schedule of Pharmaceutical Benefi ts and be compounded by the pharmacy. The ingredients must conform to the standards of composition or purity prescribed and also comply with standards set out in the Therapeutic Goods Act 1989 (Cth).

Pharmacists may not discount PBS and RPBS medicines when a subsidy applies. This arrangement is in place to ensure that patients always pay the same price for PBS and RPBS subsidised medicines. Pharmacists must also follow their respective state or territory dispensing legislation when dispensing PBS and RPBS medicines. For example, the Dental Book of the PBS lists 5 ampoules of morphine sulfate injection 10mg in 1mL as a benefi t on a prescription written by a dentist. However, under the Health (Drugs and Poisons) Regulation 1996 (Qld) dentists are only authorised to obtain, possess, or administer morphine; they are not authorised to prescribe morphine for a patient. Thus, although morphine injection is a benefi t on the PBS for dental use, dentists (in Queensland) are not permitted to prescribe the medicine, and if a dentist did prescribe morphine for a patient, a pharmacist could not lawfully dispense the prescription.

Pharmacists may dispense PBS medicines for urgent cases without a written prescription when they receive a verbal (telephone) instruction from a prescriber. Under the PBS the written prescription must be provided to the pharmacist within 7 days. However, state and territory legislation regarding verbal prescriptions may require a shorter period of time to obtain the written prescription and pharmacists therefore need to make sure they also follow their state or territory requirements.

Patient eligibility through one of the following methods must be proven prior to the supply of the medicine: • Australian residents through a current Medicare card

• eligible veterans or dependants through a Repatriation Health or Pharmaceutical Benefi ts card

• overseas visitors with Reciprocal Health Care Agreements should show their passport or Medicare card. Patients with the following cards are eligible for a concessional (discounted)

pharmaceutical benefi t:

• Pensioner Concession card

• Commonwealth Seniors Health card

• Centrelink issued Health Care card

• DVA White, Gold or Orange Card

• Safety Net Concession or Safety Net Entitlement card. These cards are distributed by Medicare Australia to pharmacies to be issued to eligible individuals or families. [5] Non-PBS/RPBS prescriptions cannot be supplied under the PBS/RPBS and

must be supplied as a private prescription where the patient is liable for the full cost of the medicine.


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When a PBS prescription is dispensed, the original prescription is submitted to Medicare Australia. Regulation 26 specifi es that if a prescription is for repeat supplies, pharmacists need to dispense one repeat only and prepare a repeat authorisation form during dispensing. The repeat authorisation form must be attached to the duplicate prescription. A pharmacist may defer a repeat item on request of a patient.

Various measures have been introduced to deter patients from requesting repeat supplies before the supply is therapeutically necessary. The intention of these measures is to reduce problems associated with patients stockpiling medicines. These measures are the 20-day/4-day rules and the Safety Net 20-day rules, specifying time periods that must lapse before a pharmacist fi lls further repeats.

The 20-day/4-day rules limit the frequency of repeated supplies where the repeat interval depends on the maximum number of repeats allowed. If the listed maximum number of repeats is fi ve or more, the interval is 20 clear days, except for ophthalmic preparations which may be supplied after 4 days. If the repeat number of supplies is less than fi ve, the interval should be 4 clear days. However, Regulation 25 of the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth) specifi es that a supply may be made within this period where the pharmacist reasonably believes that the previous supply was (1) lost, stolen or destroyed, or (2) the supply is necessary to treat the person. In those circumstances the pharmacist must endorse the Medicare Australia copy of the prescription with the words ‘immediate supply necessary’. The Safety Net 20 day rule provides that the supply of some listed medicines under the ‘immediate supply necessary’ provision is excluded from Safety Net contribution calculations.

Regulation 24 of the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth) provides for circumstances during which the quantity of a repeated supply can be directed by the medical practitioner to be supplied on one occasion; for example, when the patient is going overseas and needs to obtain several months’ supply at once. For Regulation 24 to apply, the prescriber must be satisfi ed that the following conditions apply:

(a) the maximum quantity or number of units applicable in relation to the pharmaceutical benefi t should be insuffi cient for the medical treatment of the person for whom the prescription is written; and

(b) the person requires the pharmaceutical benefi t for the treatment of a chronic illness or is residing in a place remote from the approved pharmacist nearest to that person’s place of residence; and

(c) the person could not, without great hardship, obtain the pharmaceutical benefi t by means of repeated supplies on separate occasions.

Regulation 19(1)(h) of the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth) specifi es that a prescription under Regulation 24 must have ‘Reg 24’ or ‘Regulation 24’ written on it. RPBS prescriptions may be endorsed ‘hardship conditions apply’.

At the time of receiving the medicines, patients or carers need to pay the pharmacy the required amount and acknowledge receipt through signing and dating the receipt. Should a patient not be able to sign, an agent may sign but must include their address. Should neither a patient nor an agent be able to sign, Regulation 31(3) specifi es that a pharmacist may sign on the patient’s behalf and certify that the benefi t was supplied. Such a certifi cation requires the following details:

• the words ‘certifi ed supplied’

• an explanation as to why receipt could not be obtained from the patient/carer


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• the date of supply

• the name of the pharmacist making the certifi cation

• the signature of the pharmacist making the certifi cation

• the date of certifi cation. Online claiming was introduced to ensure that payments are processed almost

instantaneously and provide Medicare Australia with an opportunity to check patients’ entitlements. When a prescription is dispensed, the dispensary software sends the transaction to Medicare Australia for assessment against PBS/RPBS rules and for patient entitlement validation. Online claiming therefore saves the government money as it provides up-to-date information about the patient’s concessional entitlement at the date of supply. Pharmacists receive an incentive payment of 40 cents per item to participate in PBS online.

PATIENT CONTRIBUTIONS AND SUBSTITUTION To help meet the cost of the PBS and RPBS, patients pay a proportion (a co-payment) for medicines and the government pays the remainder of the cost. The amount paid by the government for pharmaceutical benefi ts is usually adjusted on 1 January each year in line with the Consumer Price Index. General patients pay more than concessional patients, however, general patients who have reached the Safety Net threshold receive pharmaceutical benefi t items at the concessional rate. Patients who have a Safety Net Entitlement Card receive items free, except when compulsory additional charges apply.

Reference pricing links the price of a medicine to the price of other medicines that provide a similar health outcome and is used to determine the three compulsory additional charges, namely:

1 Brand Price Premiums 2 Therapeutic Group Premiums 3 Special Patient Contributions.

Brand Price Premium was introduced in 1990 and applies when a particular brand of medicine is dispensed which costs more than the cheaper bioequivalent brand. The patient must pay the price difference, referred to as the Brand Price Premium. Bioequivalent medicines are indicated in the Schedule through fl agging: items marked as ‘a’ or ‘b’ may be substituted with items marked in the same way. These are referred to as generic medicines.

For a generic medicine to be listed on the PBS or RPBS, a manufacturer must demonstrate that their product is bioequivalent to the original brand. [6] The responsibility to ensure bioequivalence of generic medicines in Australia therefore lies with the pharmaceutical companies and the TGA. Two medicines are considered bioequivalent when they produce such similar plasma concentrations of the active ingredient that their clinical effects can be expected to be the same. [7] Bioequivalence is usually assessed in a small number of healthy volunteers through administering the two products on separate occasions. The peak plasma concentration (C max ) and the extent of absorption, represented by the area under the concentration – time curve (AUC) of the generic medicine are then compared with that of the original brand. To be bioequivalent, the 90% confi dence intervals (CI) for the ratio of each pharmacokinetic variable must lie between 0.80 and 1.25. This is a numerical index that provides an indication of the certainty of the study results. [8] The amount


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of active ingredient in the systemic circulation is hence used as a measure of the medicine’s clinical effi cacy. Generic medicines must adhere to the same quality of manufacturing codes as branded medicines. [9]

Substitution by pharmacists without reference to the prescriber is permitted where:

• the patient agrees to the substitution

• the two items are identifi ed as bioequivalent in the Schedule

• the prescriber has not indicated on the prescription that substitution is not to occur

• substitution is permitted under the relevant state or territory legislation. There has been increased support by the Australian Government towards the

use of generic medicines in an attempt to contain the growth of the PBS and RPBS budgets. These included amendments to the National Health (Pharmaceutical Benefi ts) Regulations 1960 (Cth) to promote increased generic prescribing. The changes required, as of February 2003, that computer prescribing programs must by default permit brand substitution for PBS prescriptions. [10]

The Therapeutic Group Premium was introduced in 1992 and applies to groups of medicines which have similar safety and health outcomes. Government reimbursement to pharmacists is based on the lowest-priced items within a therapeutic group. The difference between the subsidised price and the price of the medicine, referred to as the Therapeutic Group Premium, has to be paid by the patient unless the prescriber has requested an exemption.

Where agreement between a manufacturer and the government over the subsidised price for an item cannot be reached, certain PBS listed medicines will attract a Special Patient Contribution. The Special Patient Contribution is paid by the patient, unless the prescriber has requested an exemption.

PBS REFORMS Signifi cant PBS reforms were announced by the government in November 2006 and were introduced in July 2007 following the passing of the National Health Amendment (Pharmaceutical Benefi ts Scheme) Act 2007 (Cth) (No 111, 2007). These changes were made to ensure the PBS remains affordable to the Australian Government, enabling it to continue to provide Australians with access to cost-effective medicines. The specifi c aim of the reforms was: [11]

… to protect patients from higher out of pocket costs, get better value from market competition among brands of generic (off-patent) medicines and recognise the importance of world-class life-enhancing drugs to patients. These changes are referred to as PBS reforms and mainly involve price disclosure

provisions that apply to pharmaceutical manufacturers and changes to the way PBS-listed medicines are priced. The intended outcomes of these reforms include savings from off-patent medicines and improvements to the listing of medicines. As of 1 August 2007 medicines listed on the PBS were separated into two groups, namely F1 and F2.

F1 medicines are medicines where there is only a single brand listed. F1 medicines are not substitutable whereas F2 medicines are those where there are many brands listed. The amount that the government pays for F2 medicines was reduced through a complicated formulary that will undergo ongoing review.


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The reforms also involve an increased push towards generic dispensing and the introduction of fi nancial incentives for pharmacists to dispense generic products when available. This involves the payment of an additional $1.50 to a pharmacist when they dispense a generic medicine. [12] Through this incentive scheme, pharmacists are strongly encouraged to dispense generic medicines.

COMMUNITY PHARMACY AGREEMENTS One of the main income sources for community pharmacists is dispensing fees under the PBS. These fees are negotiated as part of 5-year cooperative arrangements between the Australian government and the Pharmacy Guild of Australia to formalise the Commonwealth price paid to approved pharmacists for providing PBS and RPBS medicines and other pharmaceutical-related services. These agreements are referred to as Community Pharmacy Agreements (CPAs).

The First CPA (1991 – 1995) introduced location rules and included pharmacy amalgamation incentives to reduce pharmacy numbers, and a revised dispensing formula that provided for higher professional fees and lower mark-up. Funding was also obtained for the development and implementation of the Quality Care Pharmacy Program (QCPP).

In order to encourage community pharmacies to contribute to the implementation of the quality use of medicines policies, the government has introduced the following funded opportunities as part of the CPAs:

• The Second CPA (1995 – 2000) introduced payment for professional services through the introduction of reimbursements for Residential Medication Management Reviews (RMMRs).

• The Third CPA operating from 1 July 2000 to 30 June 2005 (extended to 30 November 2005) built on the outcomes of the second CPA. Responding to emerging needs and changed priorities, it included funding for incentive payments which encouraged pharmacists to:

• use Consumer Medicine Information (CMI) leafl ets in daily professional practice. Pharmacists could claim a payment of 10 cents per prescription item from Medicare Australia for ensuring that CMI leafl ets were included in medication packaging or for providing such information separately

• provide Home Medicine Reviews (HMRs).

• In addition to these services, the Fourth CPA, which came into operation in December 2005 and will be in place until June 2010, introduced remuneration for a number of professional service programs to be implemented over the term of the agreement. These include: [3]

• the provision of compliance devices or packaging systems to community-based patients

• patient medication profi ling service

• diabetes medication assistance implementation trial

• asthma medication assistance implementation trial

• an incentive payment to pharmacists who gain initial accreditation to conduct HMRs and RMMRs and a payment to already accredited pharmacists to renew accreditation

• improved counselling for dispensing of the emergency hormonal contraceptive

• communicable disease prevention.


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These programs and the associated incentive and remuneration structures represent a conceptual shift at policy level towards the payment for pharmacist professional services. They also create certain challenges for community pharmacists, including changing their practice to enable delivery of these professional services in a fi nancially sustainable model. [13] There is a need to identify strategies that will enable the incorporation of these new professional services into everyday practice.

The newer professional services not only provide pharmacists with the opportunity to expand business practices, but also potentially result in an expansion in legal liability. There is therefore an increased need for the profession to remain abreast of professional developments. As stated by Coppock, ‘ … any involvement in the delivery of new services requires careful analysis of the risk factors and strategies to minimise them’. [14]

It is likely that the future of community pharmacy would be infl uenced substantially by economic factors such as changes in the PBS and the continuation and introduction of fi nancial incentives to provide services through the CPAs.

PHARMACEUTICAL BENEFITS AND PUBLIC HOSPITAL PHARMACY REFORMS Under the Australian Health Care Agreements, the PBS had been introduced into public hospitals in certain jurisdictions. These agreements are referred to as the Public Hospital Pharmaceutical Reforms and are currently operational across Queensland, Victoria, Western Australia and the Northern Territory. These provide eligible discharged or non-admitted patients in participating public hospitals with access to subsidised medicines under the PBS, RPBS and a range of chemotherapy pharmaceuticals through the Chemotherapy Pharmaceuticals Access Program (CPAC).

Participating hospitals are responsible for nominating medical practitioners who provide medical services within the public hospital. Medicare Australia issues these medical practitioners with prescriber numbers. All of the items approved by the hospital’s pharmaceutical advisory committee may be used in Safety Net calculations, regardless of whether the item is listed or not.

THE IMPACT OF THE PBS ON PHARMACY PRACTICE The PBS determines the dispensing fees that pharmacists receive and is a major determinant of their income. PBS compliance requirements have increased over recent years, with PBS dispensing requiring pharmacists to be up-to-date and vigilant regarding a range of complex PBS rules. PBS dispensing also places additional administrative demands on pharmacists. For example, obtaining concession card and Medicare card details, participating in PBS online, the 20-day/4-day rule and Brand Price Premiums. These can defl ect pharmacists’ attention away from focusing on therapeutic issues and the provision of patient care during dispensing. Although many of the PBS administrative functions can be delegated to pharmacy support staff, compliance with PBS requirements still places additional burdens on pharmacists. Pharmacists therefore need to be innovative with regard to practice processes in order to minimise the time spent on administrative PBS issues.


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The introduction of payments under the PBS for the provision of certain professional pharmacy services infl uences the development of the profession with regard to increased involvement in medication management services. Pharmacists wanting to provide certain paid professional services are required to undergo additional training and credentialing. For example, pharmacists offering medication management reviews and diabetes and asthma medication assistance services must successfully complete training to be eligible for credentialing with the Australian Association of Consultant Pharmacy. Additionally, pharmacy premises where certain services are offered need to comply with specifi c criteria to ensure privacy during the provision of these services.

The PBS reforms have a major impact on pharmacies’ profi tability and fi nancial sustainability. Ongoing patent expiries affect price margins, which increase a pharmacy’s fi nancial sensitivity. On the other hand, the government push towards generic substitution with pharmacy incentive payments attached to substitution also impact on pharmacy profi tability. The net effect of the PBS reforms is, however, unknown. The PBS therefore signifi cantly affects pharmacy practice. Pharmacy managers need to continuously monitor the practice and fi nancial impact of the PBS requirements and changes to ensure the delivery of quality pharmacy services that are profi table and fi nancially sustainable.

Since its inception the PBS has been extended to include access to PBS medicines when a person is admitted to a private hospital or a residential aged care facility (RACF). However, the regulatory and administrative requirements of the PBS do not refl ect these unique settings. For example, pharmacists providing services to RACFs are often asked to supply ongoing medicines before the doctor’s visit. This can place the pharmacist in a diffi cult position of needing to, on the one hand, comply with state and territory legislation and PBS requirements regarding verbal prescriptions. On the other hand, should pharmacists supply the medicines, they carry a risk of not getting paid for supplying the benefi t if they do not get the prescription within the required time period. There are more scenarios unique to RACFs and private hospitals that currently make it diffi cult for pharmacists to provide best patient care while still complying with PBS requirements. A review has therefore been commissioned to undertake a re-evaluation of the PBS supply arrangements in the context of RACFs and private hospitals. [15]

HEALTH INSURANCE ACT 1973 (CTH) The Health Insurance Act 1973 (Cth) established a government scheme of entitlements, for payment for health services provided to eligible Australian residents. This national health insurance system, known as Medicare, was introduced in 1984 and, until October 2005, was administered by the Health Insurance Commission. Under the Health Services Legislation Amendment Act 2005, the Health Insurance Commission became Medicare Australia which now administers a number of health programs, [16] manages claim processing and arranges payments of benefi ts for Medicare, including PBS and the RPBS.

The Medicare system is funded from Australian taxation monies and is based on the premise that all Australians should contribute to their own health care according to their ability to pay. Some of the health services included within the scheme under the provisions of the Health Insurance Act 1973 are medical, pathology, diagnostic imaging and radiation oncology. Medicare therefore provides free, or subsidised, access to treatment for public patients in public health care facilities, or through


143

the private sector. Patients undergoing specifi ed dental treatments or treatment by participating optometrists may also be eligible to receive a government contribution through the Medicare system. Medicare benefi ts and entitlements are fi xed by reference to a table of items in the Schedule of fees set by the Australian Government.

When a health professional — for example, a medical practitioner — covered by the Health Insurance Act 1973 treats a patient they can choose to either charge the patient the price for the service as set by the government or charge more than the set rate. If the medical practitioner charges the amount as set, the patient provides their Medicare card and the medical practitioner can bill Medicare Australia directly. This is referred to as ‘bulk billing’. If the medical practitioner charges more than the set rate this is paid by the patient. The patient may claim the set rate back from Medicare Australia. Reimbursement of only the amount as set under the Medicare Schedule for the particular item will be refunded. This means the patient must pay the difference between what they have been charged and the Medicare rate. This difference is referred to as the ‘gap’. There are also ‘Safety-Net’ provisions built into the system that limits the gap payment for those persons with chronic conditions.

A provider identifi ed within the categories contained within the Health Insurance Act 1973 must have a Medicare provider number for their patients to be eligible for the reimbursement. Medicare Australia issues and records the details of those health professionals to whom provider numbers are issued. Provider numbers are now specifi c to the purpose or service rendered. A provider number allows the health professional to raise referrals to specialist services, request pathology or diagnostic imaging and obtain a Medicare rebate for their own professional service. All medical practitioners with Australian medical registration can obtain a provider number, which enables them to prescribe pharmaceuticals.

REVIEW QUESTIONS AND ACTIVITIES

1 Discuss the impact of the PBS on the quality use of medicine agenda. 2 Why did the Constitution of Australia have to be amended to allow the

introduction of the PBS? 3 List those factors that are considered when a manufacturer or sponsor

applies for the PBS listing of a product. 4 ‘Cost-effectiveness is an integral part of the PBS listing process’.

Discuss. 5 Defi ne reference-based pricing. 6 Explain the different premiums that patients may need to pay for PBS

medicines. 7 Describe the measures in place to deter patients from receiving repeat

supplies before the supply is therapeutically necessary. 8 How are patients prescribed ‘Authority Required’ PBS items? 9 Investigate under what circumstances a generic substitution may be made

on a non-PBS (private) prescription in your jurisdiction. 10 Identify the legislation in your own jurisdiction that provides the overriding

authority when determining the validity of a PBS prescription.


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Further reading Pharmaceutical Benefi ts Scheme website: www . pbs . gov . au De Vries J , Gleave D , Best J et al. Generic medicines: dealing with multiple brands .

National Prescribing Service News . December 2007 ; 55 : 1 – 4 Department of Health and Ageing. Fact sheet: Pharmaceutical Benefi ts Scheme

(PBS) reform. 2007. Online. Available: www . health . gov . au / internet / main / publishing . nsf / Content / 24693658DD49E286CA2572750081DB74 /$ File / PBS % 20Reform % 202Feb07 . pdf

Endnotes 1 Australian Institute of Health and Welfare (AIHW). Health expenditure Australia

2006 – 7 . AIHW, Canberra, September 2008. 2 Biggs A. The Pharmaceutical Benefi ts Scheme — an overview . 2 January 2003. Online.

Available: www . aph . gov . au / library / INTGUIDE / SP / pbs . htm [accessed 21 November 2008]

3 Department of Health and Ageing. For Industry. Role of the pharmaceutical Benefi ts Advisory Committe. 2008. Online. Available: www . pbs . gov . au / html / industry / static / how _ to _ list _ on _ the _ pbs / elements _ of _ the _ listing _ process / pbac _ guidelines / a _ part _ 1 / section _ 1 [accessed 13 October 2008]

4 Department of Health and Ageing. Preparations which may be prescribed for patients receiving palliative care. 2008. Online. Available: www . pbs . gov . au / html / healthpro / browseby / palliative - care [accessed 25 October 2008]

5 The PBS Safety Net scheme was launched in 1986 to help individuals and families with high prescription medicine costs. Each year the government sets two Safety Net thresholds, namely one for general patients and one for people who have a concession card. When the patient or family reaches their relevant threshold, they are eligible to apply for a Safety Net card to receive PBS medicine either cheaper or free for the rest of the calendar year. Individuals and families hence need to keep a Prescription Record Form (PRF), listing all the PBS medicines supplied, to be used to determine when the Safety Net would apply

6 Therapeutic Goods Administration. Australian regulatory guidelines for prescription medicines (ARGPM) . 2004. Online. Available: www . tga . gov . au / pmeds / argpm . htm [accessed 16 June 2008]

7 De Vries J, Gleave D, Best J et al. Generic medicines: dealing with multiple brands. National Prescribing Service News . December 2007; 55:1 – 4

8 Pearce GA, McLachlan A, Ramzan I. Bioequivalence: How, why, and what does it really mean? Journal of Pharmacy Practice and Research . 2004; 34(3):195 – 200

9 Therapeutic Goods Administration. Australian code of good manufacturing practice for medicinal products. 2002. Online. Available: www . tga . gov . au / docs / html / gmpeodau . htm [accessed 16 June 2008]

10 Lockney A. Generic medicines. inPHARMation . June 2003; 6 – 10 11 See the Hon. Tony Abbott MfHaA. ‘PBS Reform’ media release. In: Department

of Health and Ageing C, ed. 16 November 2006


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12 Department of Health and Ageing. Fact sheet: Pharmaceutical Benefi ts Scheme (PBS) reform . 2007. Online. Available: www . health . gov . au / internet / main / publishing . nsf / Content / 24693658DD49E286CA2572750081DB74 /$ File / PBS % 20Reform % 202Feb07 . pdf [accessed 18 June 2008]

13 Roberts A, Benrimoj S, Chen T, Williams K, Aslani P. Qualifi cation of facilitators to accelerate uptake of cognitive pharmaceutical services (CPS) in community pharmacy . August 2004. Online. Available: www . guild . org . au / research / project _ display . asp?id=263 [accessed 9 March 2006]

14 Coppock J. Careful collaboration reduces patient risks. Australian Journal of Pharmacy . July 2005; 86:498

15 Health Management Advisors. Review of the existing supply arrangements of PBS medicines in residential aged care facilities and private hospitals. Discussion paper: Part A — The review context and process. An invitation to make submissions by Wednesday 21 January 2009

16 On behalf of the Department of Health and Ageing, Department of Veteran Affairs, Department of Families and Community Services and Indigenous Affairs and the Department of Health Western Australia