National Health Act 1953 - Amendment determination under subsection 85AB(1) - drugs on F1 (No. PB 5 of 2009)

Administered by Department of Health, Disability and Ageing

Legislation au F2009L00046 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 5 OF 2009

 

 

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 adding the listed drugs “Desvenlafaxine”, “Sorafenib”, “Triptorelin” and “Voriconazole” to F1.

 

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

 

The instrument is expressed to commence on 1 February 2009.

 

Consultations

This instrument affects pharmaceutical companies with medicines listed on the PBS.  In relation to the introduction of formularies and the criteria used to determine the placement of drugs on formularies, the pharmaceutical industry has been consulted during both the policy development and implementation phases. 

     
Attachment

 

 

Paragraph 1:  Provides that this instrument commences on 1 February 2009.

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

Schedule 1:     Adds the listed drugs “Desvenlafaxine”, “Sorafenib”, “Triptorelin”                 and “Voriconazole” to F1.              

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overview

The National Health Act 1953 (the Act) serves as the foundation for the Pharmaceutical Benefits Scheme (PBS), which ensures that all Australians have access to reliable, timely, and affordable medicines. The Act empowers the Commonwealth to provide pharmaceutical benefits in accordance with Part VII, with the Minister having the authority to declare listed drugs through legislative instruments. In 2007, the National Health Amendment (Pharmaceutical Benefits Scheme) Act introduced amendments that established formularies F1 and F2, with the latter further divided into Part A and Part T, to facilitate price competition and transparency in the PBS. This legislative instrument, PB 5 of 2009, amends the National Health (Pharmaceutical Benefits) Regulations 2007 by adding four listed drugs, "Desvenlafaxine," "Sorafenib," "Triptorelin," and "Voriconazole," to formulary F1, effective from 1 February 2009. This amendment aims to refine the categorisation of drugs within the PBS, thereby enhancing the scheme's efficiency and effectiveness in delivering pharmaceutical benefits to the Australian public.

Scope and Application

The National Health Act 1953 governs the Pharmaceutical Benefits Scheme (PBS) which ensures all Australians have reliable, timely, and affordable access to a wide range of medicines. The Act applies to pharmaceutical benefits provided by the Commonwealth under Part VII, which includes listed drugs and certain extemporaneously-prepared medicinal preparations. The Minister determines the form, manner of administration, and brand of listed drugs through legislative instruments. The Act also establishes formularies, F1 and F2, for listed drugs, with F1 intended for single brand drugs and F2 for drugs with multiple brands or interchangeable drugs. Drugs on F2 are subject to statutory price reductions, price disclosure, and guarantee of supply provisions. The Act includes mechanisms for the Minister to determine the placement of listed drugs into these formularies, and amendments in 2007 introduced these provisions, which commenced on 1 August 2007. This particular instrument, which commenced on 1 February 2009, adds the listed drugs “Desvenlafaxine”, “Sorafenib”, “Triptorelin”, and “Voriconazole” to F1. This affects pharmaceutical companies with medicines listed on the PBS, as the instrument specifies the criteria for determining the placement of drugs into formularies F1 and F2, and such criteria were developed with consultation from the pharmaceutical industry.

Key Provisions

The main operative sections of the F2009L00046 Instrument pertain to amendments under the Pharmaceutical Benefits Scheme (PBS) as per Part VII of the National Health Act 1953. Specifically, this instrument adds four drugs—Desvenlafaxine, Sorafenib, Triptorelin, and Voriconazole—to Formulary 1 (F1) (Schedule 1). This determination is made under the authority of subsection 85AB(1) and section 85AB(4) of the Act, which empowers the Minister to classify listed drugs based on specific criteria. The obligations imposed by this Act on the entities it governs primarily revolve around the classification and administration of pharmaceutical benefits. Pharmaceutical companies with drugs listed under the PBS must comply with the new classifications set forth in the instrument. This includes ensuring that their products are appropriately listed under F1, as determined by the Minister. The Act also requires these companies to adhere to the criteria for brand determinations, including strength, unit type, and size, as outlined in subsections 85(3) and 85(6). Furthermore, the pharmaceutical companies must comply with the statutory requirements for price reductions, price disclosure, and guarantee of supply as stipulated in the Act. In terms of consequences for non-compliance, the Act does not explicitly state specific offences or penalties for breaches related to the classification of drugs under the PBS. However, the overarching legal framework under which these classifications operate implies that non-compliance with the Act’s provisions could result in regulatory actions, fines, or other legal repercussions as determined by the relevant authorities. While the exact penalties are not detailed in this particular instrument, general provisions within the National Health Act 1953 provide a basis for enforcement actions against those who fail to comply with the Act’s requirements.

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