National Health Act 1953 - Amendment determination under section 84AH - exempt items (No. PB 26 of 2010)

Administered by Department of Health, Disability and Ageing

Legislation au F2010L01008 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 26 OF 2010

 

 

NATIONAL HEALTH ACT 1953

 

 

AMENDMENT DETERMINATION UNDER SECTION 84AH

 

 

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).  It adds two drugs which meet the criteria under section 84AH.

 

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.

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

The instrument is expressed to commence on 1 May 2010.  The instrument is expressed to commence in this way so that the items determined to be exempt by the instrument are exempt from statutory price reductions and any price disclosure obligations, including those occurring on 1 May 2010.

 

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.

 

 

 

 

ATTACHMENT

Paragraph 1: Provides that the instrument will commence on 1 May 2010.

Paragraph 2: Determines that Schedule 1 amends PB 58 of 2007.

Schedule 1: Determines, under section 84AH that the ‘Oral solution, 100 mg per mL, 300 mL’ form of the listed drug Levetiracetam and Oral suspension, 10 mg per mL, 240 mL’ form of the listed drug Nevirapine, which are to be taken orally, are exempt items.

 

 

 

 

Overview

The National Health Act 1953 was enacted to establish a framework for the provision of health services and benefits in Australia. This Act serves as the legislative basis for the Pharmaceutical Benefits Scheme (PBS), through which the Commonwealth ensures Australians have access to a broad range of affordable and reliable medicines. The Act was amended in 2007 to introduce provisions allowing the Minister to determine certain pharmaceutical items as "exempt items," which are excluded from statutory price reductions and price disclosure requirements. This measure aims to encourage the availability of specific pharmaceutical formulations that are suitable for particular patient subgroups for whom other formulations may not be appropriate. The 2010 amendment determination under Section 84AH adds two drugs to the list of exempt items, ensuring that these particular formulations remain accessible and affordable for their intended patient populations. The determination was made following consultations with relevant stakeholders, including pharmaceutical companies, the responsible persons for the affected brands, and the Pharmaceutical Benefits Advisory Committee (PBAC).

Scope and Application

The National Health Act 1953, as amended by the instrument PB 26 of 2010, governs the Pharmaceutical Benefits Scheme (PBS), which ensures Australians have access to affordable and reliable medicines. Under this Act, the Minister for Health has the authority to determine specific forms and manners of administration of listed drugs, thereby governing what constitutes a pharmaceutical benefit. This legislative framework applies to pharmaceutical companies with medicines listed on the PBS and is administered at the Commonwealth level. The instrument amends the 2007 instrument, PB 58, by adding two new drugs, Levetiracetam and Nevirapine, to the list of exempt items under section 84AH. These drugs are designated as exempt items if they meet the criteria set by the Minister, such as being the sole listed brand of the drug, having no bioequivalent or biosimilar brands, and being suitable for particular patient populations due to their form and manner of administration. Exempt items are excluded from statutory price reductions and price disclosure requirements, aiming to encourage the availability of certain formulations for specific demographics. The instrument, which commenced on 1 May 2010, ensures that the newly designated exempt items are exempt from price reductions and disclosure obligations from that date.

Key Provisions

The primary operative sections of this legislation are sections 84AH and the associated schedule, which specify the amendments made to the National Health Act 1953 (the Act). Section 84AH empowers the Minister to determine by legislative instrument whether a pharmaceutical item is an “exempt item.” This determination is possible if there is only one listed brand of the pharmaceutical item, no listed brands of other pharmaceutical items are bioequivalent or biosimilar, and the listed drug in the pharmaceutical item is common to at least one brand of another pharmaceutical item (subsection 84AH(2)). The Minister must also 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 (subsection 84AH(3)). The instrument amending the principal instrument, PB 58 of 2007, determines the exempt status of two pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS): ‘Oral solution, 100 mg per mL, 300 mL’ form of the listed drug Levetiracetam and Oral suspension, 10 mg per mL, 240 mL’ form of the listed drug Nevirapine. The obligations and requirements imposed by the Act on the parties or entities it governs primarily concern the Minister and pharmaceutical companies. The Minister must ensure that the pharmaceutical items determined to be exempt under section 84AH meet the criteria specified in the Act and the advice from the PBAC. Pharmaceutical companies, on the other hand, must comply with the determinations made by the Minister and ensure that their products are listed correctly on the PBS. They must also be aware of any changes in the status of their products, such as becoming exempt items, and adjust their operations accordingly. The Act also imposes obligations on the PBAC to provide advice to the Minister if it is satisfied of certain matters concerning the suitability of pharmaceutical items for use by particular subgroups. The legislation outlines specific offences, penalties, or civil/criminal consequences for breaches. While the Act does not explicitly state the penalties for non-compliance, breaches of legislative instruments made under the Act can generally result in fines, imprisonment, or both, depending on the severity and nature of the breach. For instance, non-compliance with the PBS regulations can lead to fines of up to $22,200 for individuals and $111,000 for corporations, along with potential criminal penalties. The exact penalties would depend on the specific breach and the discretion of the court. It is essential for pharmaceutical companies and other entities governed by the Act to adhere to the requirements to avoid any legal repercussions.

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