EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 58 OF 2008
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 “Duloxetine” and “Pramipexole” to F1.
A provision-by-provision description of the instrument is contained in the Attachment.
The instrument is expressed to commence on 1 June 2008.
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 June 2008.
Paragraph 2: Determines that Schedule 1 amends PB 87 of 2007.
Schedule 1: Adds the listed drugs “Duloxetine” and “Pramipexole” to F1.
Overview
The National Health Amendment Determination under Subsection 85AB(1) 2008 (Instrument PB 58 of 2008) is an amendment to the National Health Act 1953 (the Act), enacted by the Parliament of Australia to address the need for better management and regulation of drugs under the Pharmaceutical Benefits Scheme (PBS). The Act forms the legislative basis of the PBS, which ensures Australians have reliable, timely, and affordable access to a wide range of medicines. The objective of this particular amendment is to determine the placement of certain listed drugs, namely Duloxetine and Pramipexole, into formulary F1, which is designated for single-brand drugs and those with no bioequivalent or biosimilar alternatives within their therapeutic group. This amendment was introduced to provide clarity and ensure appropriate pharmaceutical benefits are provided under Part VII of the Act. The instrument commenced on 1 June 2008 and involved consultation with the pharmaceutical industry during its development and implementation phases.
Scope and Application
The National Health Act 1953 Amendment Determination under subsection 85AB(1) applies to pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS). This Act, as amended, facilitates the Commonwealth’s provision of reliable, timely, and affordable access to a wide range of medicines for all Australians by regulating the PBS. The Act applies to all listed drugs declared by the Minister, which are specified in legislative instruments and listed drugs as defined in subsection 84(1). It also applies to certain extemporaneously-prepared medicinal preparations. The Act's jurisdiction covers the entire Commonwealth of Australia. The Minister can determine the form and manner of administration of listed drugs, as well as the brands of pharmaceutical items, through legislative instruments. Drugs are assigned to formularies F1 and F2, with F1 intended for single brand drugs and F2 for drugs with multiple brands or interchangeable at the patient level. F2 is further divided into Part A and Part T, with different provisions for statutory price reductions, price disclosure, and guarantee of supply. The Act allows the Minister to determine by legislative instrument the placement of listed drugs on F1 or F2, subject to specific criteria outlined in the Act. This particular amendment adds the listed drugs “Duloxetine” and “Pramipexole” to F1, effective from 1 June 2008.
Key Provisions
The primary operative sections of the National Health Act 1953 (the Act) relate to the Pharmaceutical Benefits Scheme (PBS) under Part VII, which ensures Australians have access to a wide range of affordable medicines. Specifically, subsection 85(1) mandates that the Commonwealth provides benefits according to Part VII, and subsection 85(2) allows the Minister to declare listed drugs by legislative instrument. These declared drugs are those defined in subsection 84(1). Furthermore, subsections 85(3), 85(5), and 85(6) empower the Minister to determine the form, administration, and brand of pharmaceutical items, respectively. Additionally, the Act includes provisions for statutory price reductions, price disclosure, and supply guarantees, as outlined in the amendments from the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007, which commenced on 1 August 2007.
The Act imposes several obligations and requirements on the parties involved, particularly pharmaceutical companies. These entities must comply with the criteria set out in the Act for the placement of drugs on formularies F1 and F2, which are intended for single-brand and multiple-brand drugs, respectively. Drugs on F2 are further divided into Part A and Part T, where Part A and Part T are intended for drugs with high price competition between brands. The regulations, as referenced in sections 84AC and 84AD, determine the placement of drugs on these formularies. Pharmaceutical companies must ensure that their drugs meet the specified criteria and are appropriately listed to comply with these regulatory requirements.
Breach of the provisions outlined in the Act can lead to various consequences, including both civil and criminal penalties. The Act includes mechanisms for statutory price reductions, price disclosure, and ensuring the guarantee of supply, and failure to comply with these can result in sanctions. The maximum penalties for non-compliance are not explicitly stated in the provided text, but they generally encompass fines and other legal repercussions. Additionally, the Act may provide for civil actions, such as lawsuits for damages, and criminal actions, which can result in imprisonment, depending on the severity and nature of the breach. Compliance with the Act is crucial to avoid these penalties and ensure the continued provision of affordable medicines under the PBS.