National Health Act 1953 - Amendment determination under subsection 85AB(1) - drugs on F1 (No. PB 17 of 2010)

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Legislation au F2010L00675 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 17 OF 2010

 

 

NATIONAL HEALTH ACT 1953

 

 

AMENDMENT DETERMINATION UNDER SUBSECTION 85AB(1)

 

 

Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the 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 as such 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 in relation to PBS reform by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007 (the amending Act), which commenced on 1 August 2007. 

 

The Act provides for listed drugs to be assigned to formularies, identified as F1 and F2.  F1 is intended for single brand drugs, F2 for drugs that have multiple brands, or are interchangeable at the patient level with other drugs with multiple brands.  F2 is in turn divided into Part A and Part T, intended for drugs where price competition between brands is high.  Drugs on F2 are subject to the provisions of the Act relating to statutory price reductions (with different outcomes for Part A and Part T); price disclosure; and guarantee of supply.

 

Section 84AC relevantly provides that a drug is on F1 if determined to be so under section 85AB, or if prescribed to be so by regulations. A drug may also be determined to be on F1 under s99AEJ of the Act. A drug is on F2 if determined to be so under section 85AB, or prescribed to be so by the regulations.  Section 84AD provides that a drug is in Part A or

Part T of F2 if determined to be so under section 85AC or if prescribed to be so in the regulations under subsection 85AD(5).  Subsections 84AC(5) and 84AD(5) provide that the regulations may, on the day on which section 84AC commenced, prescribe the matters referred.

 

Drugs on F1 and F2 (in Parts A and T) were prescribed with effect from 1 August 2007 in the National Health (Pharmaceutical Benefits) Regulations.

 

Subsection 85AB empowers the Minister to determine by legislative instrument that a listed drug is on F1 or F2.  For a drug to be on F1, it must satisfy the criteria in subsection 85AB(4). This requires that there are no listed brands of pharmaceutical items that have the drug, or another drug in the same therapeutic group, that are bioequivalent or biosimilar.  It also requires that the drug was not on the day before, on F2.  A drug may only be determined to be on F2 if it does not satisfy one or more of the criteria for F1.

 

This instrument amends instrument number PB 87 of 2007 by removing the listed drug “Memantine” from F1.

 

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

 

The instrument is expressed to commence on 1 April 2010.

 

Consultations

This instrument affects pharmaceutical companies with medicines listed on the PBS.  Consultation has occurred through a company submission to the Therapeutic Goods Administration and the Pharmaceutical Benefits Advisory Committee for a drug to be listed on the PBS.  When drugs are listed on the PBS each drug is allocated into a formulary, F1, F2A or F2T from the recommendation of the PBAC. 

     
Attachment

 

 

Paragraph 1:  Provides that this instrument commences on 1 April 2010.

Paragraph 2:  Determines that Schedule 1 amends PB 87 of 2007.

Schedule 1:     Removes the listed drug “Memantine” from F1.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

The National Health Amendment Determination under Subsection 85AB(1) 2010 (F2010L00675) is an instrument that amends the National Health Act 1953 (the Act) to alter the pharmaceutical benefits formulary classification of listed drugs under the Pharmaceutical Benefits Scheme (PBS). The Act, enacted by the Australian Parliament, serves to provide reliable, timely, and affordable access to a range of medicines for all Australians. This particular amendment was introduced to address a specific gap in the PBS by altering the classification of the drug Memantine. The instrument, which commenced on 1 April 2010, was made under the authority of the Minister for Health pursuant to subsection 85AB(1) of the Act, with the policy objective of ensuring appropriate pharmaceutical benefits are provided under the PBS by adjusting the formulary classification of listed drugs to better align with therapeutic needs and market conditions.

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) which ensures reliable, timely, and affordable access to a wide range of medicines for Australians. Under this Act, the Minister can determine the form of a listed drug, the manner of its administration, and the brand of pharmaceutical items that are covered. Drugs are assigned to formularies F1 and F2, with F1 intended for single brand drugs and F2 for drugs that have multiple brands or are interchangeable at the patient level. F2 is further divided into Part A and Part T for drugs where price competition between brands is high. Drugs on F2 are subject to statutory price reductions, price disclosure, and guarantee of supply provisions. The Act empowers the Minister to determine by legislative instrument whether a drug is placed on F1 or F2, based on specific criteria. This particular amendment, commencing on 1 April 2010, removes the listed drug “Memantine” from F1, thereby affecting pharmaceutical companies with medicines listed on the PBS. Consultations on these changes have been conducted through submissions to the Therapeutic Goods Administration and the Pharmaceutical Benefits Advisory Committee.

Key Provisions

The primary operative sections of this legislation are found in Part VII of the National Health Act 1953, which governs the Pharmaceutical Benefits Scheme (PBS) (s 85). The Act enables the Minister to declare drugs and medicinal preparations listed under subsection 85(2) and determine their form, administration, and brand (s 85(3), s 85(5), s 85(6)). Furthermore, the Act mandates the assignment of listed drugs to formularies F1 and F2, with F2 further divided into Part A and Part T (s 84AC, s 84AD). The legislation also provides for statutory price reductions, price disclosure, and guarantee of supply for drugs on F2 (s 84AC, s 84AD). The obligations imposed on the parties by this Act include the Minister's responsibility to determine the form, administration, and brand of listed drugs (s 85(3), s 85(5), s 85(6)). Pharmaceutical companies must comply with the requirements for price disclosure and guarantee of supply for drugs on F2 (s 84AC, s 84AD). Patients and healthcare professionals must be aware of the formulary (F1 or F2) to which a drug has been assigned to ensure appropriate access to pharmaceutical benefits under the PBS. Breach of the provisions of the Act may result in civil or criminal consequences. For example, failure to comply with the price disclosure requirements for drugs on F2 may result in fines or other penalties as determined by the relevant authorities. Additionally, the Minister has the power to remove a listed drug from F1 or F2 if it no longer meets the criteria for its assignment, as demonstrated by the removal of "Memantine" from F1 in this instrument (Schedule 1). Maximum penalties for breaches of the Act are not specified in the text; however, penalties may vary depending on the nature and severity of the offence.

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