National Health Act 1953 - Amendment determination under subsections 85AB(1) and 85AC(1) - drugs on F1 and drugs in Part A of F2 (No. PB 25 of 2010)

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Legislation au F2010L00684 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 25 OF 2010

 

NATIONAL HEALTH ACT 1953

 

AMENDMENT DETERMINATION UNDER SUBSECTIONS 85AB(1) AND 85AC(1)

 

Summary

This instrument amends the  principal instrument, PB 95 of 2007, which sets out drugs that are on F1 and F2 and are in Part A of F2 for the purposes of the Pharmaceutical Benefits Scheme (PBS).  It adds seven drugs to, and removes one drug from, F1 and adds two drugs to F2A. 

 

Background

Part VII of the National Health Act 1953 (the Act) is the legislative basis of the 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 – Part T is 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 not so determined, prescribed to be so by the regulations.  Under subsection 84AC(2), if there is a determination that a drug is on F2, then it overrides any prescription in the regulations that the drug is in F1.  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 made under subsection 84AD(5).  Subsections 84AC(5) and 84AD(5) provide that the regulations may prescribe the matters referred to for the day on which the section 84AC commenced.

 

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 be determined to be on F2 if it does not satisfy one or more of the criteria for F1.

 

Subsection 85AC(1) empowers the Minister, where a drug has been determined to be on F2, to determine by legislative instrument that the drug is in Part A or Part T of F2.  A drug can only be determined to be in Part A if it does not satisfy either of the criteria for Part T.  The criteria for Part T, as set out in subsection 85AC(4), are that the drug is in the same therapeutic group as a drug in Part T, or was already in Part T before the new determination.

 

Under subsection 84AG(1), the Minister may determine one or more therapeutic groups and that 2 or more listed drugs are in the same therapeutic group.  Single brand drugs that have been prescribed or determined to be on F1 will move to F2 if those single brand drugs become part of a therapeutic group that includes a drug that is on F2 (see subsection 85AB(4)(b)).  

 

A provision-by-provision description of this instrument is contained in the Attachment.  It 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 (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 April 2010.

 

Paragraph 2:  Determines that Schedule 1 amends PB 95 of 2007, which determines drugs on F1 and F2 and in Part A of F2.

 

Schedule 1:     Adds the listed drugs amino acid formula with fat, carbohydrate, vitamins, minerals and trace elements without phenylalanine and tyrosine and supplemented with docosahexanoic acid, dabigatran etexilate, essential amino acids formula, maraviroc, methoxy polyethylene gycol-epoetin beta, nevirapine and vitamins, minerals and trace elements with carbohydrates to those determined to be on F1 and clopidogrel and memantine to those determined to be on F2 and in Part A of F2.  The placement of clopidogrel on F2A overrides the prescription of that drug on F1 in the Regulations.  Memantine has, by a separate instrument (PB 17 of 2010), been removed from F1.  The instrument also removes fludarabine from F1 because that drug has already been placed on F2A by another instrument.  Finally, it amends the name arsenic trioxide to arsenic.

 

 

 

 

 

 

 

 

 

 

Overview

The National Health Act 1953, as amended by the National Health Amendment (Pharmaceutical Benefits Scheme) Determination 2010, provides a framework for the Pharmaceutical Benefits Scheme (PBS), enabling the Commonwealth to ensure reliable, timely, and affordable access to a wide range of medicines for all Australians. This Act addresses the problem of ensuring that the PBS can efficiently manage the provision of medicines, including the classification of drugs into formularies to facilitate price competition and supply guarantees. Enacted by the Parliament, the primary objective is to regulate the form, administration, and brands of listed drugs, ensuring they meet the criteria for inclusion on F1, F2A, or F2T within the PBS. This legislative instrument updates the formulary listings to reflect current therapeutic needs and market conditions, ensuring that the scheme remains effective and responsive to changes in the pharmaceutical landscape. The 2010 amendment determination introduces changes to the formulary listings under the PBS by adding and removing specific drugs from F1 and F2. It ensures that drugs are correctly classified to facilitate price competition and supply guarantees where appropriate. The instrument was developed following consultations with relevant stakeholders, including pharmaceutical companies, the Therapeutic Goods Administration, and the Pharmaceutical Benefits Advisory Committee. The latter, comprising experts from various healthcare professions, recommends drug classifications based on submissions and therapeutic considerations. The determination aims to maintain the PBS's integrity by aligning drug classifications with current market and therapeutic needs.

Scope and Application

This legislation, F2010L00684, amends the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953, impacting the formularies F1 and F2 which govern the availability and pricing of drugs on the PBS. The Act applies to pharmaceutical companies with medicines listed on the PBS, and the amendments are made by legislative instrument under the authority granted by the National Health Act. The geographic reach of this Act is national, as it pertains to the Commonwealth's provision of pharmaceutical benefits across Australia. The amendments add seven drugs to F1 and two drugs to F2, and remove one drug from F1. These changes are effective from 1 April 2010, as stipulated in the instrument. The instrument also acknowledges consultations with pharmaceutical companies and the Pharmaceutical Benefits Advisory Committee, which is composed of representatives from various healthcare professions and consumer interests, ensuring a broad spectrum of perspectives in decision-making.

Key Provisions

This instrument amends the Pharmaceutical Benefits Scheme (PBS) by adjusting the classifications of certain drugs listed under the National Health Act 1953. It introduces seven new drugs into F1, which is designated for single brand drugs, and two new drugs into F2A, which is intended for drugs with multiple brands or within therapeutic groups with multiple brands (subsections 85AB(1) and 85AC(1)). The instrument also removes one drug from F1, based on its previous placement in F2A by another instrument. This legislative amendment impacts the availability and pricing of these pharmaceuticals under the PBS, affecting both pharmaceutical companies and patients. The Act imposes obligations on the Minister to classify drugs into specific formularies, ensuring that each drug is placed appropriately based on criteria such as the number of brands, therapeutic grouping, and bioequivalence. The Minister must determine these classifications through legislative instruments, ensuring that each drug is assigned to either F1, F2A, or F2, as appropriate. The Minister also has the authority to designate therapeutic groups and assign drugs accordingly (subsection 84AG(1)). This regulatory framework ensures that the PBS operates effectively by providing clear guidelines on drug classification and pricing. Breach of the obligations set out in the Act can result in significant consequences. While the specific offences and penalties are not detailed in the instrument, the Act generally provides for enforcement actions, which may include administrative penalties, fines, or other civil or criminal sanctions. The severity of these penalties can vary depending on the nature and extent of the breach. For instance, non-compliance with the drug classification requirements could lead to fines or other enforcement actions as stipulated under the Act. The instrument is designed to enhance the functionality of the PBS by ensuring that drugs are classified correctly, which in turn affects their availability and cost to patients. The classifications are determined through a consultative process involving the Pharmaceutical Benefits Advisory Committee (PBAC), which includes representatives from various healthcare sectors. This ensures that the decisions are informed and balanced, taking into account the needs of both patients and healthcare providers.

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