EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 96 OF 2007
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 remove the pharmaceutical items fluconazole, solution for intravenous infusion 100 mg in 50 mL, and fluconazole, solution for intravenous infusion 200 mg in 100 mL, from the list of exempt items; and to add the pharmaceutical items octreotide, injection (modified release) 10 mg (base) vial and diluent syringe, octreotide, injection (modified release) 20 mg (base) vial and diluent syringe and octreotide, injection (modified release) 30 mg (base) vial and diluent syringe 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 December 2007.
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 December 2007.
Paragraph 2: Determines that Schedule 1 amends PB 58 of 2007.
Schedule 1: Sets out the pharmaceutical items to be deleted from and added to the list of exempt items.
Overview
The National Health Act 1953, enacted by the Australian Parliament, provides the legislative basis for the Pharmaceutical Benefits Scheme (PBS), ensuring Australians have access to reliable, timely, and affordable medicines. The Act was amended in 2007 to introduce the concept of "exempt items," allowing the Minister for Health to exempt certain pharmaceutical items from statutory price reductions and price disclosure requirements. This was introduced to address the problem of ensuring suitable therapies are available for specific patient populations, particularly where other formulations of the same drug are unsuitable due to factors such as form and manner of administration. The policy objective behind these amendments is to encourage the availability of particular drug formulations that cater to the needs of demographic subgroups, such as children or geriatric patients. This legislative instrument amends the list of exempt items, removing fluconazole solutions for intravenous infusion and adding octreotide injection formulations, effective from 1 December 2007.
Scope and Application
The National Health Act 1953, as amended, governs the Pharmaceutical Benefits Scheme (PBS) under which the Commonwealth ensures Australians have access to affordable medicines. Specifically, Part VII of the Act governs the provision of pharmaceutical benefits, with drugs and medicinal preparations declared by the Minister through legislative instruments. This legislation applies to all persons and entities within Australia, ensuring a uniform approach to the provision and regulation of pharmaceutical benefits across the nation. The Act does not exclude any specific demographic or geographic area from its application. The Minister, with consideration of the Pharmaceutical Benefits Advisory Committee, can designate certain pharmaceutical items as "exempt items" under section 84AH of the Act. These exemptions apply when there is only one listed brand of the pharmaceutical item, no bioequivalent or biosimilar listed brands of other pharmaceutical items, and the listed drug is common to at least one brand of another pharmaceutical item. Additionally, the Minister must be satisfied that the item represents suitable therapy for a particular patient population due to the form and manner of drug administration, and no other suitable item exists for that subgroup. Exempt items are excluded from statutory price reductions and price disclosure requirements, aiming to encourage availability for specific demographics such as children or geriatric patients. This legislative instrument, effective from 1 December 2007, amends a previous instrument to remove certain fluconazole items from the exempt list and adds several octreotide items to it, illustrating the dynamic nature of the regulations within the PBS framework.
Key Provisions
The National Health Act 1953, as amended, provides the legal framework for the Pharmaceutical Benefits Scheme (PBS), ensuring Australians have access to affordable medicines. Section 85(1) mandates the Commonwealth to offer benefits under the PBS, while section 85(2) empowers the Minister to declare drugs and medicinal preparations to be listed under the scheme. Section 85(3) to 85(6) further allow the Minister to determine specific forms, administration methods, and brands of pharmaceutical items. The insertion of section 84AH, through amendments by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007, allows the Minister to designate certain pharmaceutical items as "exempt items". These exemptions apply if there is only one listed brand, no bioequivalent or biosimilar listed brands, and the drug is common to at least one other brand. Additionally, the Minister must be satisfied, with advice from the Pharmaceutical Benefits Advisory Committee (PBAC), that the item is suitable for a specific patient subgroup due to its form and manner of administration, and no other item is suitable for that subgroup for the same reasons.
The obligations imposed by the Act on parties such as pharmaceutical companies and the Minister are significant. Pharmaceutical companies must ensure that their listed drugs comply with the criteria set out in sections 85(2) to 85(6). The Minister has the responsibility to declare drugs and medicinal preparations as listed items and to determine the forms, administration methods, and brands of pharmaceutical items. Furthermore, under section 84AH, the Minister must make informed decisions on whether to classify specific pharmaceutical items as "exempt items" based on suitability for particular patient populations, considering advice from the PBAC. These obligations are crucial in maintaining the integrity and effectiveness of the PBS.
Breaches of the provisions set out in the National Health Act 1953 can result in various consequences. While the explanatory statement does not detail specific penalties for non-compliance, it is understood that breaches of legislative instruments made under the Act can lead to civil or criminal penalties, depending on the nature and severity of the breach. Pharmaceutical companies failing to comply with declarations and determinations could face legal action, fines, or other enforcement measures. For the Minister, incorrect determinations might result in judicial review or other administrative actions to correct non-compliant decisions. The specific maximum penalties are not outlined in the explanatory statement but are typically governed by the broader legislative framework and associated regulations.