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 70 of 2010)

Administered by Department of Health, Disability and Ageing

Legislation au F2010L02061 Not in force Legislative Instrument

Legislation content

 

EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 70 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 for the purposes of the Pharmaceutical Benefits Scheme (PBS).  This instrument adds seven new drugs to F1 and two new drugs to F2 and Part A of F2. 

 

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 August 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 August 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 methionine and supplemented with docosahexanoic acid, certolizumab pegol, exenatide, ganirelix, golimumab, tocilizumab and vildagliptin to those determined to be on F1 and galantamine and sorbitol with sodium citrate and sodium lauryl sulfoacetate to those determined to be on F2 and in Part A of F2.  The placement of galantamine and sorbitol with sodium citrate and sodium lauryl sulfoacetate on F2A overrides the prescription of these drugs on F1 in the Regulations. 

 

 

 

 

 

 

 

 

 

 

Overview

The National Health Act 1953 was enacted to establish the Pharmaceutical Benefits Scheme (PBS), which provides Australians with reliable, timely, and affordable access to a wide range of medicines. The Act allows the Minister to determine the form, administration, and brand of listed drugs by legislative instrument, and assigns these drugs to formularies F1 and F2. F1 is intended for single brand drugs, while F2 is for drugs with multiple brands or those in therapeutic groups with other multi-brand drugs. The F2 formulary is further divided into Part A and Part T, with Part T intended for drugs with high price competition between brands. The policy objective of this legislation is to ensure that the PBS provides equitable access to necessary medications. The instrument F2010L02061 amends the principal instrument PB 95 of 2007, which lists drugs on F1 and F2, and in Part A of F2. This amendment adds seven new drugs to F1 and two new drugs to F2 and Part A of F2. The placement of these drugs into the appropriate formulary is based on consultations with pharmaceutical companies, the Therapeutic Goods Administration, and the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC, which includes representatives from various interests such as consumers, health economists, and medical specialists, recommends the allocation of drugs into the PBS formularies following submissions from affected pharmaceutical companies.

Scope and Application

The National Health Act 1953, as amended by the instrument PB 70 of 2010, governs the Pharmaceutical Benefits Scheme (PBS) which ensures Australians have access to affordable and reliable medicines. This Act applies to the Commonwealth and involves the Minister in determining which drugs are listed and assigned to formularies F1 and F2 within the PBS. Drugs on F1 are typically those with single brands and no bioequivalent or biosimilar drugs in the same therapeutic group, while drugs on F2 may have multiple brands or belong to therapeutic groups with multiple brands. F2 is further divided into Part A and Part T, with Part T intended for drugs where price competition between brands is high. The instrument amends the 2007 determination by adding seven new drugs to F1 and two new drugs to F2, specifically Part A of F2. The changes apply nationally and affect pharmaceutical companies with medicines listed on the PBS. The instrument does not explicitly state any exclusions or exemptions but relies on the criteria set forth in the Act for the determination of drug placements within the formularies.

Key Provisions

The National Health Act 1953 Amendment Determination (PB 70 of 2010) introduces specific changes to the Pharmaceutical Benefits Scheme (PBS) by adding new drugs to the F1 and F2 formularies, as well as Part A of F2. This amendment aims to refine the categorisation of drugs under the PBS, ensuring they are assigned appropriately based on their therapeutic characteristics and market dynamics. Under section 85AB(1) and 85AC(1), the Minister is empowered to determine which drugs are placed on F1, F2, or Part A and T of F2. These sections provide the legal basis for assigning drugs to different formularies based on criteria such as the presence of bioequivalent or biosimilar drugs, therapeutic grouping, and historical placement. The obligations imposed by the Act on the parties and entities it governs include the requirement for the Minister to determine the placement of drugs on the F1 and F2 formularies. This determination must be based on specific criteria such as the absence of bioequivalent or biosimilar drugs for F1, and the presence of therapeutic groupings for F2. Pharmaceutical companies must ensure their drugs comply with the criteria set out in the Act and regulations for placement on the PBS. The Pharmaceutical Benefits Advisory Committee (PBAC) plays a critical role in advising the Minister on the appropriate categorisation of drugs based on therapeutic and market considerations. Breaches of the provisions outlined in the Act may lead to civil or criminal consequences. For instance, pharmaceutical companies that do not comply with the placement criteria for their drugs could face penalties or legal action. While the specific penalties are not detailed in the Explanatory Statement, the Act provides a framework under which such consequences could be enforced. It is essential for all parties involved to adhere to the regulatory requirements to avoid any adverse outcomes. The amendment determination also includes a consultation process involving the Therapeutic Goods Administration and the PBAC. This ensures that pharmaceutical companies and other stakeholders have an opportunity to provide input on drug listings and formulary placements. This consultative approach helps maintain the integrity and effectiveness of the PBS by incorporating diverse perspectives into the decision-making process.

Legal classification tags

Area of Law
Health Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Reporting & Disclosure Obligations

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.