Opinion Number. 1921

Subject

PHARMACEUTICAL BENEFITS PROVISION OF PHARMACEUTICAL BENEFITS TO HOSPITAL PATIENTS: WHETHER PROVISION MAY BE MADE UNDER NATIONAL HEALTH SERVICE ACT 1948: WHETHER PROVISION CONSTITUTES ‘MEDICAL SERVICES’: OVERLAPPING NATURE OF PHARMACEUTICAL BENEFITS, SICKNESS BENEFITS, HOSPITAL BENEFITS, MEDICAL SERVICES AND DENTAL SERVICES IN s (xxiiiA) OF CONSTITUTION

Key Legislation

CONSTITUTION s 51(xxiiiA): NATIONAL HEALTH SERVICE ACT 1948 ss 7(1), 22(a)(i): PHARMACEUTICAL BENEFITS ACT 1944

Date
Client
The Director

I refer to your memorandum of 27th October, 1950, requesting advice whether the provision of pharmaceutical benefits to patients in non-public wards of approved hospitals could be achieved entirely by regulation under the National Health Service Act, without invoking any powers under the Pharmaceutical Benefits Act or Regulations at all. I would answer this question in the affirmative.

(2)  Section 22(a)(i) of the National Health Service Act expressly authorizes the making of Regulations ‘for prescribing matters for or in relation to the establishment … of any national health service’. Then section 7(1) of the Act gives the Director-General power, on behalf of the Commonwealth, to arrange for the provision of prescribed ‘medical services’.

(3)  In my opinion the provision of medicines to patients in approved hospitals should be regarded as falling within the ordinary natural meaning of the words ‘medical services’.

(4)  It is necessary to consider, however, whether the phrase ‘medical services’ in the National Health Service Act ought to be given a more restricted meaning because of the specific and elaborate provision which is made in the Pharmaceutical Benefits Act and Regulations for the provision of medicine, including the provision of medicine to patients in public hospitals.

(5)  The answer should, in my opinion, be in the negative because I think that a Court would construe the National Health Service Act broadly, giving full effect to its terms regardless of the existence of the Pharmaceutical Benefits Act.

(6)  In construing the words ‘medical services’ in the National Health Service Act it must be remembered that the phrases contained in paragraph (xxiiiA) of section 51 of the Constitution, namely, pharmaceutical benefits, sickness benefits, hospital benefits, medical services and dental services, are not water-tight categories of Social Service benefits. They overlap as between themselves, with the consequence that the Act would, in my view, be a valid exercise by the Commonwealth Parliament of its legislative power even though it made provision for hospital benefits under a generic classification of medical services (see the second Free Medicine Case 1949 Argus L.R. 865 per Latham C.J., at p. 872).1 The supply of total medicinal requirements of a hospital patient may be at one and the same time a pharmaceutical benefit, a sickness benefit, a hospital benefit and a medical service. For these reasons the provision of medicines to a patient in approved hospitals falls within the meaning of the words ‘medical services’ as that phrase is used in section 7 of the National Health Service Act.

(7)  With regard to the matters mentioned in your fourth paragraph, provisions of similar content to those contained in section 14 of the Pharmaceutical Benefits Act and regulations 13 and 31 of the Regulations made under that Act could, I think, be incorporated in the Regulations under the National Health Service Act which prescribe the medial service of providing pharmaceutical benefits, and such Regulations would be within the power conferred by section 22 of the National Health Service Act.

[Vol. 39, p. 410]

1 British Medical Association v Commonwealth [1949] HCA 44, para 17; (1949) 79 CLR 201.