National Health Act 1953 - Amendment Determination under section 84AH - exempt items (No. PB 10 of 2011)

Administered by Department of Health, Disability and Ageing

Legislation au F2011L00137 Not in force Legislative Instrument

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 EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 10 OF 2011

 

 

NATIONAL HEALTH ACT 1953

 

 

AMENDMENT DETERMINATION UNDER SECTION 84AH (No.2)

 

 

Summary

This instrument amends the principal instrument, PB 58 of 2007, which determines the exempt status of a pharmaceutical item which has a particular form and manner of administration listed on the Pharmaceutical Benefits Scheme (PBS).  This instrument corrects an error in PB 58 of 2007 by amending the description of the exempted form for the drug ondansetron, so that the description correctly identifies a pharmaceutical item.

 

Background

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)), for example a 70 milligram tablet;
  • the manner of administration of the form of the listed drug so determined (subsection 85(5)) for example, oral; 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.

Certain 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 by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007 (the amending Act), expressed to commence on 1 August 2007.  Included in these amendments is the insertion of section 84AH into the Act.

Section 84AH empowers the Minister by legislative instrument to determine that a pharmaceutical item is an “exempt item”.  This is permitted if there is only one listed brand of the pharmaceutical item; there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar; and the listed drug in the pharmaceutical item is common to at least one brand of another pharmaceutical item.  The Minister has also to be satisfied, having regard to any advice from the Pharmaceutical Benefits Advisory Committee (PBAC), that the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population; that the relevant item is suitable for use by a particular subgroup of that patient population because of either or both of the form and manner of administration of the drug in the item; and that no other pharmaceutical item that has that drug is suitable for use by that subgroup due to either or both of the form and manner of administration of the drug in that other item. 

Exempt items are excluded from the statutory price reductions and from price disclosure requirements under the Act.  The intention is to encourage availability of certain, and quite particular, pharmaceutical items by providing exemptions for particular formulations of drugs (eg oral solution) used by a demographic subgroup (eg children or geriatric patients) for whom other formulations of the drug are not suitable.

PB 58 of 2007 was amended by PB 7 of 2011 with effect from 20 January 2011. Amongst others things, PB 7 of 2011 determined a particular form of the drug ondansetron to be an exempt item. However, due to an error in the description of the form, PB 7 of 2011 does not identify any existing pharmaceutical item that has the drug ondansetron. This is because the form described in PB 7 of 2011 is not a form that has been determined under subsection 85(3) to be a form of that listed drug. The effect is that PB 7 of 2011 was not effective in determining a pharmaceutical item with the drug ondansetron to be an exempt item.

This instrument corrects the error in the description of the relevant form so that an existing pharmaceutical item with the drug ondansetron is determined under subsection 84AH to be an exempt item.

Accordingly, this instrument determines, to be an exempt item, a pharmaceutical item that was not included in PB 7 of 2011. Thus, section 46 of the Legislative Instruments Act 2003 does not prevent this instrument from being made.

A provision-by-provision description of the instrument is contained in the Attachment.

The instrument commences on 21 January 2011. 

 

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

 

Consultations

This instrument affects pharmaceutical companies with medicines listed on the PBS.  In relation to the introduction of the exempt items measure in the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007, which commenced on 1 August 2007, pharmaceutical companies have been consulted during both the policy development and implementation phases.

The responsible person for the brand of the pharmaceutical item affected by this instrument has been consulted.

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.

 

 

 

 

 

 

 

Overview

The National Health Act 1953, enacted by the Parliament of Australia, establishes the Pharmaceutical Benefits Scheme (PBS) to provide access to affordable medicines for all Australians. This Act was amended in 2007 through the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007, which introduced the concept of "exempt items" under section 84AH. The purpose of these amendments was to allow for the exemption of certain pharmaceutical items from statutory price reductions and price disclosure requirements, thereby encouraging the availability of specific formulations of drugs suitable for particular patient populations. An error in the description of a form for the drug ondansetron, identified in PB 58 of 2007, was subsequently corrected by PB 7 of 2011, which inadvertently failed to correctly identify an existing pharmaceutical item due to the incorrect form description. This led to the issuance of the instrument F2011L00137, which amends PB 58 of 2007 to accurately describe the form of ondansetron, thereby ensuring that the intended pharmaceutical item is correctly classified as an exempt item. The policy objective remains to ensure that suitable pharmaceutical items are available for those who need them, particularly when other formulations are not appropriate.

Scope and Application

The instrument pertains to the National Health Act 1953, which is the legislative framework for the Pharmaceutical Benefits Scheme (PBS) through which the Commonwealth provides access to a range of medicines. This instrument specifically amends a previous legislative instrument, PB 58 of 2007, which had intended to declare a pharmaceutical item with the drug ondansetron as an exempt item. However, due to an error in the description of the form of the drug, the previous instrument did not effectively designate any pharmaceutical item as exempt. This amendment corrects the error, ensuring that the description now accurately identifies an existing pharmaceutical item, thus allowing it to be designated as an exempt item under the Act. The instrument applies to pharmaceutical companies with medicines listed on the PBS and affects the form and manner of administration of the drug ondansetron. The instrument is effective from 21 January 2011 and is a legislative instrument under the Legislative Instruments Act 2003. Pharmaceutical companies, the responsible person for the brand of the pharmaceutical item, and the Pharmaceutical Benefits Advisory Committee (PBAC) were consulted in the development of this amendment.

Key Provisions

The main operative sections of this instrument pertain to the correction of an error in the description of the form of the drug ondansetron under section 84AH of the National Health Act 1953 (the Act). This amendment rectifies the description so that it accurately identifies a pharmaceutical item that has the drug ondansetron in a particular form, thereby determining it to be an exempt item. This is achieved by aligning the description with the form as determined under subsection 85(3) of the Act. The instrument ensures that the pharmaceutical item with ondansetron is now correctly identified and, therefore, eligible for the exemptions intended by the Act. The Act imposes certain obligations on the parties involved, particularly on pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS). These obligations include ensuring that the descriptions of pharmaceutical forms and brands comply with the determinations under the Act, thereby facilitating accurate identification of exempt items. The responsible person for the brand of the pharmaceutical item is required to ensure that the description of the form is correct and that it aligns with the forms determined by the Minister under subsection 85(3) of the Act. Additionally, the Pharmaceutical Benefits Advisory Committee (PBAC) plays a crucial role by providing advice to the Minister on the suitability of pharmaceutical items for particular subgroups, which informs the Minister's determinations under section 84AH. Failure to comply with the requirements of the Act can result in civil and criminal consequences. While the specific offences and penalties are not detailed in the instrument, the Act generally provides for a range of penalties for non-compliance, including fines and imprisonment. For instance, under subsection 101(4AB) of the Act, if the description of a pharmaceutical item does not meet the requirements set out by the Minister, it may be considered an offence, leading to potential penalties. It is important for pharmaceutical companies and responsible persons to adhere to these requirements to avoid any legal repercussions. This instrument is a legislative measure designed to correct an oversight in the previous determination (PB 7 of 2011) and ensure that the pharmaceutical item with ondansetron is accurately identified as an exempt item. The amendments are intended to maintain the integrity of the PBS by ensuring that the correct items are exempt from certain statutory requirements, thereby facilitating access to suitable pharmaceutical benefits for particular patient populations.

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