Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Hansard source

The duration of the first price disclosure cycle, commencing on 1 December 2010, is 16 months, including a data collection period of 10 months and a six-month processing period. As price disclosure is based on sales data for a drug, a reasonable period is required on which to base the price changes. A reasonable data collection period is required to ensure that seasonal fluctuations and short-term changes in the market are balanced by figures on standard month-to-month sales, so giving a complete picture of market activity and not just a one-off sample. As you would understand, Senator, pharmaceutical use changes according to the season, so a decent length of time is needed to pick up winter and other times when there are different levels of use for various medications. The six-month processing period provides for data submission, new price calculations, price adjustment notifications and opportunities for industry to ask questions or appeal the new prices they are being asked to accept. Any truncating of those time lines would put at risk the accuracy of the pricing and calculations and deny affected companies the due process.

I understand that the motivation of your amendment is to bring this on earlier, and we too would like to do that as quickly as we possibly can. But we truly think that the time frame as described in the legislation is the most sensible period we could have to collect the data required to make a sensible decision and to deal with the process questions that will follow. Your second question goes to what will happen after the first data collection period. I am advised that subsequent cycles will be 18 months in duration. The next cycle will start on 1 October 2011 and include 12 months—a full year—for data collection and that data collection will be followed by six months for data processing, the review rights et cetera.