EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 19 OF 2009
NATIONAL HEALTH ACT 1953
AMENDMENT DETERMINATION UNDER PARAGRAPH 84AG(1)(b)
Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.
Subsection 85(1) provides that benefits are to be provided by the Commonwealth in accordance with Part VII in respect of pharmaceutical benefits.
Drugs and medicinal preparations to which Part VII applies are declared by the Minister by legislative instrument to be so under subsection 85(2). These are listed drugs as defined in subsection 84(1). Part VII also applies to certain extemporaneously-prepared medicinal preparations as a result of declarations under paragraph 85(2)(b).
The Minister by legislative instrument can determine the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)); the manner of administration of the form of the listed drug so determined (subsection 85(5)); and a brand of the pharmaceutical item (defined in subsection 84(1)) that has the listed drug in that form with that manner of administration (subsection 85(6)). These determinations govern (except for certain extemporaneously-prepared pharmaceutical benefits) what constitutes the pharmaceutical benefit (defined in subsection 84(1)) under Part VII of the Act.
Provisions of the Act relating to brands of pharmaceutical items, including in relation to statutory price reductions, price disclosure, and guarantee of supply, are the result of amendments in relation to PBS reform by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007 (the amending Act), commenced on 1 August 2007. Included in these amendments is section 84AG relating to therapeutic groups, defined in subsection 84(1) to mean a therapeutic group determined by the Minister under subsection 84AG.
Therapeutic groups are groups of drugs which are interchangeable on an individual patient basis. They are grouped together for pricing purposes as having similar health outcomes. This price linkage is demonstrated in paragraph 99ACH(2)(c) whereby statutory price reductions on the listing of a new brand of a pharmaceutical item that has a drug in a therapeutic group flow on to a listed brand of another pharmaceutical item that has another drug in the same therapeutic group which has the same manner of administration.
Paragraph 84AG(1)(b) empowers the Minister to determine that 2 or more listed drugs are in the same therapeutic group. Subsection 84AG(6) provides that the regulations may prescribe one or more therapeutic groups to come into effect on the commencement of the section.
The National Health (Pharmaceutical Benefits) Amendment Regulations 2007 (No.2)
amended the National Health (Pharmaceutical Benefits) Regulations to prescribe 6 therapeutic groups.
This legislative instrument amends the determination under paragraph 84AG(1)(b) made by legislative instrument number PB 60 of 2007 which came into effect on 1 August 2007. The amendment is set out in Schedule 1.
A provision-by-provision description of the instrument is contained in the Attachment.
The instrument is expressed to commence on 1 March 2009.
Consultations
Consultations on the content of the determination have been on the basis of advice from the Pharmaceutical Benefits Advisory Committee that the drugs are interchangeable on an individual patient basis and dialogue with the pharmaceutical industry in respect of the PBS reforms.
Attachment
Paragraph 1: Provides that the instrument commences on 1 March 2009.
Paragraph 2: Determines that schedule 1 amends PB 60 of 2007.
Schedule 1: Provides the following amendment
SCHEDULE 1
Addition
Valsartan ATRA group