National Health Act 1953 - Amendment determination under section 84AH - exempt items (No. PB 77 of 2010)

Administered by Department of Health, Disability and Ageing

Legislation au F2010L02088 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 77 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 August 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 August 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 August 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, 95 mL’ form of the listed drug tipranavir and Powder for oral solution, 50mg per mL, 100 mL’ form of the listed drug valganciclovir, which are to be taken orally, are exempt items.

 

 

 

 

Overview

The National Health Amendment (Pharmaceutical Benefits Scheme) Amendment Determination 2010, which was enacted to amend the National Health Act 1953, addresses the need to exempt certain pharmaceutical items from statutory price reductions and price disclosure obligations under the Pharmaceutical Benefits Scheme (PBS). This legislation was enacted by the Parliament of Australia and aims to ensure that particular formulations of drugs, which are suitable for specific patient populations, are available without the constraints of statutory price reductions and price disclosure requirements. This measure was introduced to enhance the accessibility of essential medications for specific subgroups, such as children or geriatric patients, for whom other formulations may not be suitable. The determination follows consultations with relevant pharmaceutical companies, the Pharmaceutical Benefits Advisory Committee, and the responsible persons for the brands affected.

Scope and Application

The F2010L02088 instrument amends the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953 to classify certain pharmaceutical items as exempt, thus excluding them from statutory price reductions and price disclosure requirements. Specifically, the instrument identifies two drugs, tipranavir in the form of an oral solution and valganciclovir in the form of a powder for oral solution, as exempt items. This classification is applicable to pharmaceutical companies with medicines listed on the PBS and is made in consultation with these companies and the Pharmaceutical Benefits Advisory Committee (PBAC). The instrument aims to ensure the availability of specific pharmaceutical formulations suitable for particular patient subgroups, such as children or geriatric patients, by exempting these items from statutory price reductions and disclosure requirements. The instrument's commencement on 1 August 2010 ensures that the items determined to be exempt are exempt from these obligations from that date onwards.

Key Provisions

The main operative sections of this legislation (F2010L02088) amend the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. Section 84AH of the Act empowers the Minister to determine by legislative instrument whether a pharmaceutical item is an "exempt item." This is possible when there is only one listed brand of the pharmaceutical item, 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. Furthermore, the Minister must be satisfied, based on 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 and is suitable for use by a particular subgroup of that population because of either or both of the form and manner of administration of the drug in the item. Additionally, 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. The instrument determines that the "Oral solution, 100 mg per mL, 95 mL" form of the listed drug tipranavir and Powder for oral solution, 50mg per mL, 100 mL form of the listed drug valganciclovir, which are to be taken orally, are exempt items (subsection 84AH). The Act imposes obligations on pharmaceutical companies to comply with the provisions of the legislation and provide suitable therapy for a particular patient population. The Minister must be satisfied that the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population and is suitable for use by a particular subgroup of that population because of either or both of the form and manner of administration of the drug in the item. Additionally, the Minister must be satisfied 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. Pharmaceutical companies must also ensure that the listed drug in the pharmaceutical item is common to at least one brand of another pharmaceutical item, and there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar. Failure to comply with the provisions of the Act may result in offences, penalties, or civil/criminal consequences. However, the legislation does not specify any maximum penalties for breach of its provisions. The Pharmaceutical Benefits Advisory Committee (PBAC) is consulted in relation to issues relevant to this determination, and their advice is considered by the delegate of the Minister who made the instrument. Consultations with pharmaceutical companies and the Pharmaceutical Benefits Advisory Committee (PBAC) have been conducted during both the policy development and implementation phases.

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