EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 38 OF 2010
NATIONAL HEALTH ACT 1953
AMENDMENT DETERMINATION UNDER SUBSECTION 85AB(1)
This instrument amends the principal instrument, PB 87 of 2007, which determines drugs on F1 for the purposes of the Pharmaceutical Benefits Scheme (PBS). It adds two drugs which meet the criteria 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)), 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 a pharmaceutical benefit (defined in subsection 84(1)) under
Part VII of the Act.
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 in a therapeutic group with other drugs with multiple brands. F2 is in turn divided into Part A and Part T. 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 section 99AEJ 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 the PBS as at 1 August 2007 were prescribed in the National Health (Pharmaceutical Benefits) Regulations 1960 (the Regulations) to be on F1 and F2 (in Parts A and T) with effect from 1 August 2007.
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.
A provision-by-provision description of the instrument is contained in the Attachment. It is expressed to commence on 1 May 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 (PBAC) for a drug to be listed on the PBS. Two-thirds of the PBAC membership is from the following interests or professions: consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and medical specialists. When drugs are listed on the PBS each drug is allocated into a formulary, F1, F2A or FT from the recommendation of the PBAC, which is made following receipt of submissions by affected pharmaceutical companies.
Attachment
Paragraph 1: Provides that this instrument commences on 1 May 2010.
Paragraph 2: Determines that Schedule 1 amends PB 87 of 2007, which determines drugs on F1.
Schedule 1: Adds the listed drugs Lacosamide and Methoxyflurane to those determined to be on F1.