EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 21 OF 2008
NATIONAL HEALTH ACT 1953
AMENDMENT DETERMINATION UNDER SECTION 84AH
Purpose and operation
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 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 or manner of administration of the drug in the item.
Exempt items are excluded from the statutory price reductions and from price disclosure requirements under the Act. The intention is to encourage availability 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.
This instrument amends instrument number PB 58 of 2007 to add the pharmaceutical items glyceryl trinitrate, sublingual spray, 400 micrograms per dose and oestradiol, vaginal tablet, 25 micrograms to the list of exempt items.
A provision-by provision description of the instrument is contained in the Attachment.
The instrument is expressed to commence on 1 February 2008.
Consultations
This instrument affects pharmaceutical companies with medicines listed on the PBS. In relation to the introduction of the exempt items measure, pharmaceutical companies have been consulted during both the policy development and implementation phases.
ATTACHMENT
Paragraph 1: Provides that the instrument commences on 1 February 2008.
Paragraph 2: Determines that Schedule 1 amends PB 58 of 2007.
Schedule 1: Sets out the pharmaceutical items to be added to the list of exempt items.
Overview
The National Health Act 1953 was enacted to establish the Pharmaceutical Benefits Scheme (PBS) under which the Commonwealth ensures the provision of reliable, timely, and affordable access to a wide range of medicines for all Australians. The Act, as amended, empowers the Minister for Health to make legislative determinations regarding pharmaceutical items, including the listing of drugs and medicinal preparations, their forms, and manners of administration. This legislative framework ensures that the PBS remains responsive to the needs of patients and the healthcare system. The policy objective of the Act is to provide a structured mechanism through which the Commonwealth can manage and regulate the availability and pricing of pharmaceutical items listed under the PBS, ultimately aiming to enhance public health outcomes by ensuring that essential medications are accessible and affordable to all Australians.
Scope and Application
The National Health Act 1953, as amended by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007, governs the Pharmaceutical Benefits Scheme (PBS), through which the Commonwealth ensures that all Australians have reliable, timely, and affordable access to a wide range of medicines. The Act applies to pharmaceutical benefits provided in accordance with Part VII, which encompasses declared drugs and medicinal preparations, including those that are extemporaneously prepared. The Minister has the authority to declare the form and manner of administration of listed drugs and to determine brands of pharmaceutical items. Notably, section 84AH allows the Minister to designate certain pharmaceutical items as "exempt items" if specific conditions are met, such as the presence of a single listed brand, the absence of bioequivalent or biosimilar brands, and suitability for a particular patient subgroup. These exempt items are excluded from statutory price reductions and price disclosure requirements, aiming to enhance availability for specific patient populations where other formulations may not be suitable. This legislative framework extends its application nationally, impacting pharmaceutical companies with medicines listed on the PBS. The instrument in question, commencing on 1 February 2008, amends a previous instrument to include glyceryl trinitrate, sublingual spray, 400 micrograms per dose, and oestradiol, vaginal tablet, 25 micrograms, among the exempt items.
Key Provisions
The National Health Act 1953 (the Act) provides the legislative basis for the Pharmaceutical Benefits Scheme (PBS) which ensures that Australians have access to a wide range of affordable medicines. Section 85(1) of the Act specifies that the Commonwealth provides pharmaceutical benefits in accordance with Part VII, which applies to drugs and medicinal preparations declared by the Minister under subsection 85(2) (subsection 84(1) defines what constitutes a listed drug). The Minister can determine various aspects of a listed drug, including its form (subsection 85(3)), manner of administration (subsection 85(5)), and brand (subsection 85(6)). These determinations are crucial in defining what constitutes a pharmaceutical benefit under the Act.
The Act imposes several obligations on the parties involved. Pharmaceutical companies must ensure their products comply with the provisions of the Act and Part VII, including adhering to any declarations made by the Minister regarding the form, manner of administration, and brand of pharmaceutical items. The Minister, in turn, must consult with the Pharmaceutical Benefits Advisory Committee (PBAC) and satisfy certain conditions before determining that a pharmaceutical item is an “exempt item” under section 84AH. Exempt items are excluded from statutory price reductions and price disclosure requirements, aiming to encourage the availability of suitable formulations for specific patient populations.
Breaches of the Act may result in various penalties and consequences. While the Act does not explicitly state maximum penalties for non-compliance, it is governed by general provisions of Australian administrative law. Offences under the Act could lead to fines and other civil penalties, and serious breaches might result in criminal charges, depending on the specific nature of the violation. Pharmaceutical companies that fail to comply with the provisions of the Act may face enforcement actions, which could include fines, legal proceedings, or other administrative measures to ensure compliance.
This legislative instrument amends instrument number PB 58 of 2007 to include two new pharmaceutical items, glyceryl trinitrate, sublingual spray, 400 micrograms per dose and oestradiol, vaginal tablet, 25 micrograms, in the list of exempt items. These additions are made to ensure that suitable formulations of these drugs are available for specific patient populations, where other formulations are not appropriate. This amendment is intended to facilitate access to necessary medications that are tailored to the needs of particular demographic subgroups, thereby enhancing the effectiveness and suitability of treatment options under the PBS.