Other Issues

Page last updated: 12 October 2020


Commercial arrangements with the Government are made under a clear legal requirement for transparency, including the requirement to make public the fact that such arrangements exist, to minimise the extent that an earlier arrangement could slow the listing of a new PBAC-recommended alternative medicine.

Furthermore, unlike arms length commercial arrangements between business entities, arrangements with the Government are subject to statutory requirements controlling release of information.  The Freedom of Information Amendment (Reform) Act 2010, Department of Finance Circulars and the Crimes Act 1914 provide explicit procedures for managing information release and also for criminal sanctions of employees who release information in certain circumstances, and these cannot be overridden by contrary contractual clauses.  Only in extreme cases where a business entity can convincingly demonstrate to the Government that a release will create significant financial detriment to that Company is the Government in a position to consider identifying information as confidential in a deed.

Possible future competitors  

Prior to execution of the deed, the Government also anticipates how the proposed deed could be expanded if other medicines were to be subsequently listed for use in a similar population.  This ensures fairness between the competing medicines.  A deed should not constitute a barrier to the listing of a subsequent medicine.


Deed negotiations between the sponsor and the Department are finalised between the time of the PBAC recommendation and PBS listing.

All PBS recommendations are subject to Government consideration prior to listing.

The deed must be executed by both parties either before the medicine is listed on the PBS or before a change in the circumstances in which the medicine is supplied on the PBS becomes effective.


A positive recommendation for listing by the PBAC is an important first step towards PBS-subsidisation of a medicine. However a number of other steps need to be completed before a medicine can be subsidised, and these steps do have a bearing on the time it takes to list.

Medicines that are of a high cost to the Commonwealth are required to undergo a Cabinet consideration process. The deed of agreement negotiations can be progressed during the Cabinet submission process, but a medicine must receive Cabinet approval before a deed can be executed by the Government and subsequently listed on the PBS.

Listings, including those that require a deed of agreement, may be subject to published listing timeframes that require a Services Australia data transfer. Due to the nature of the data, the transfer process to Services Australia cannot be commenced until all other aspects of the listing have been agreed and completed.

Dispute Resolution  

To minimise the time to listing, the process relies on both parties communicating any issues that arise during the negotiation process at their earliest possible convenience.  Given the time constraints on this process, it is in each party’s best interests to raise issues relevant to the deed of agreement as soon as possible.

In the event that an agreement cannot be reached, formal advice will be provided by the Assistant Secretary of the Pricing and Policy Branch who is the person responsible on behalf of the Commonwealth.  Alternatively, the sponsor can approach the Department for clarification or to outline perceived issues at any stage of the process.

Each deed contains a specific clause to outline the obligations of both parties should a dispute arise.

Recovery Action  

Where recovery action is required, this action is initiated by the Department, on behalf of the Government. This is a data-driven process based on the number of processed prescriptions and involves the production and dissemination of an invoice when the relevant terms of an arrangement in a deed are triggered. Processed prescription is defined as a pharmaceutical benefit in relation to which a Subsidy is validly paid as reported by the Department.

Where recovery action is required, it is reconciled either monthly or annually depending on the specific arrangements and involves directly invoicing the relevant sponsor.


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