National Health Act 1953 - Amendment Determination under section 84AH (2011) (No. 3) (No. PB 45 of 2011)

Administered by Department of Health, Disability and Ageing

Legislation au F2011L01207 Not in force Legislative Instrument

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 EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 45 OF 2011

 

NATIONAL HEALTH ACT 1953

 

AMENDMENT DETERMINATION UNDER SECTION 84AH OF THE NATIONAL HEALTH ACT 1953 (2011) (No.3)

 

Purpose

 

The purpose of this legislative instrument, made under section 84AH of the National Health Act 1953 (“the Act”), is to amend the legislative instrument titled Determination under section 84AH of the National Health Act 1953 (as amended) (“PB 58 of 2007”) to make changes to the pharmaceutical items that are determined to be exempt items.

 

Background

 

Part VII of the Act is the legislative basis of the Pharmaceutical Benefits Scheme (“PBS”) by which the Commonwealth provides reliable, timely and affordable access to a wide range of medicines for all Australians.

 

Drugs and medicinal preparations to which Part VII applies are declared as such by the Minister, by legislative instrument under subsection 85(2) of the Act. These are listed drugs (as defined in subsection 84(1)). The Minister may also determine by legislative instrument the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)) and the manner of administration of the form of the listed drug so determined (subsection 85(5)). If a drug has a declaration under subsection 85(2) in force in respect of it and determinations under subsections 85(3) and 85(5) in force in respect of it, then that declared drug in that determined form with that determined manner of administration is a pharmaceutical item. The Minister may also determine, by legislative instrument, brands of pharmaceutical items (subsection 85(6)).

 

Section 84AH empowers the Minister to determine, by legislative instrument, that a pharmaceutical item is an ‘exempt item’ if the pharmaceutical item satisfies the criteria in section 84AH. The criteria in section 84AH are as follows:

(a)   that there is only one listed brand of the relevant pharmaceutical item; and

(b)   there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar to the one listed brand of the relevant pharmaceutical item; and

(c)   there is at least one other pharmaceutical item that has the same listed drug as the relevant pharmaceutical item; and

(d)   the Minister is satisfied (having regard to advice, if any, from the Pharmaceutical Benefits Advisory Committee (“PBAC”)) that:

  1. the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population; and
  2. the relevant pharmaceutical item is suitable for use by a particular subgroup of that population because of either or both of the form and manner of administration; and
  3. no other pharmaceutical item that has that drug is suitable for use by the subgroup because of either or both of the form and manner of administration of the drug in that other item.

 

The effect of a pharmaceutical item being determined to be an exempt item is that the listed brand of that pharmaceutical item is excluded from statutory price reductions and price disclosure requirements under Division 3A and 3B of Part VII of the Act. The intention is to encourage the availability of certain pharmaceutical items with particular formulations of drugs that are used by a demographic subgroup (eg. children or geriatric patients) for whom other formulations of the drug are not suitable.

 

Changes to PB 58 of 2007 made by this instrument

 

This instrument makes the following changes to PB 58 of 2007:

  • one pharmaceutical item (listed drug = Lacosamide, form = Oral solution 15 mg per mL, 200 mL, manner of administration = Oral) is added to the list of exempt items following advice from PBAC.
  • The description of the form of 13 pharmaceutical items in the list of exempt items is amended to align with the description of the form for brands of those pharmaceutical items in the National Health (Listing of Pharmaceutical Benefits) Instrument 2010.

The instrument commences on 1 July 2011. 

This instrument constitutes a legislative instrument for the purpose of the                Legislative Instruments Act 2003.

Consultation

This instrument affects pharmaceutical companies with medicines listed on the PBS.  In relation to the introduction of the exempt items measure, which commenced on 1 August 2007, pharmaceutical companies have been consulted during both the policy development and implementation phases.

The Pharmaceutical Benefits Advisory Committee (PBAC) was also consulted in relation to issues relevant to this determination.  The Pharmaceutical Benefits Advisory Committee (PBAC) is the independent expert body, established by section 100A of the Act, which makes recommendations to the Minister for Health and Ageing about which drugs and medicinal preparations should be available as pharmaceutical benefits and about other matters as required under the Act.  Under subsection 101(4AB) of the Act PBAC provides advice to the Minister if it is satisfied of certain matters concerning suitability of pharmaceutical items for use by particular sub-groups.  Consideration given by PBAC, under section 101(4AB), to the pharmaceutical items affected by the instrument, was considered by the delegate of the Minister who made the instrument.

Remaining changes made by this instrument to the description of the form of various pharmaceutical items are minor and machinery in nature.

Overview

The National Health Act 1953 Amendment Determination under Section 84AH of the National Health Act 1953 (No.3) 2011 was enacted to amend the legislative instrument titled Determination under section 84AH of the National Health Act 1953 (as amended) (PB 58 of 2007) to make changes to the pharmaceutical items that are determined to be exempt items. The purpose of this legislative instrument, made under section 84AH of the National Health Act 1953, is to modify the list of exempt items to ensure that certain pharmaceutical items with particular formulations of drugs, which are suitable for use by a demographic subgroup (e.g., children or geriatric patients) for whom other formulations of the drug are not suitable, are excluded from statutory price reductions and price disclosure requirements under Division 3A and 3B of Part VII of the Act. This change is intended to encourage the availability of these specific pharmaceutical items. The instrument was made by the Minister for Health and Ageing and commenced on 1 July 2011.

Scope and Application

The National Health Act 1953 Amendment Determination under section 84AH of the National Health Act 1953 (No.3) pertains to modifications of the pharmaceutical items that are designated as exempt items within the Pharmaceutical Benefits Scheme (PBS). This legislative instrument applies to pharmaceutical companies and entities involved in the production, distribution, and regulation of medicines listed on the PBS. The amendment affects the form and manner of administration of certain pharmaceutical items, specifically targeting those that are deemed suitable for particular patient demographics where other formulations are unsuitable. This determination is geographically applicable within the Commonwealth of Australia, as it operates under federal law. The changes introduced by this instrument do not alter the fundamental eligibility criteria for pharmaceutical items to be considered exempt; instead, they refine the descriptions of the forms of certain pharmaceutical items to ensure consistency with the National Health (Listing of Pharmaceutical Benefits) Instrument 2010. The instrument is effective from 1 July 2011 and constitutes a legislative instrument under the Legislative Instruments Act 2003.

Key Provisions

The primary sections of the National Health Act 1953 Amendment Determination (No.3) (F2011L01207) amend the determination under section 84AH of the National Health Act 1953 (PB 58 of 2007). These amendments pertain to the Pharmaceutical Benefits Scheme (PBS) by adjusting the pharmaceutical items deemed exempt. Specifically, the changes include the addition of a new pharmaceutical item to the list of exempt items and modifications to the descriptions of the forms of 13 existing exempt items. This instrument commenced on 1 July 2011. The amendments ensure that the descriptions of the forms align with the National Health (Listing of Pharmaceutical Benefits) Instrument 2010, which lists the brands of those pharmaceutical items. The obligations imposed by this Act on the relevant parties, primarily pharmaceutical companies with medicines listed on the PBS, involve compliance with the new determinations regarding exempt items. Pharmaceutical companies must ensure that their products meet the criteria for exemption as outlined in section 84AH of the Act. This includes ensuring that the pharmaceutical items are suitable for specific patient populations due to their form and manner of administration and that no other pharmaceutical item with the same listed drug is more suitable for the subgroup. The Minister, advised by the Pharmaceutical Benefits Advisory Committee (PBAC), determines whether a pharmaceutical item qualifies as an exempt item. Failure to comply with the provisions of the Act could result in significant consequences. While the Act itself does not explicitly detail offences, penalties, or civil/criminal consequences for non-compliance, it is likely that breaches could lead to legal action under related legislation or regulatory oversight. For instance, not adhering to the determined forms and descriptions could lead to products being ineligible for PBS listing, which in turn could affect market access and profitability for pharmaceutical companies. Additionally, misrepresentation or non-compliance with the criteria for exemption could result in regulatory scrutiny or penalties under other applicable health and safety legislation.

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