National Health Act 1953 - Amendment determination under subsections 85AB(1) and 85AC(1) (No. PB 97 of 2007)

Administered by Department of Health, Disability and Ageing

Legislation au F2007L04577 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

 

INSTRUMENT NUMBER PB 97 OF 2007

 

 

NATIONAL HEALTH ACT 1953

 

 

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

 

 

Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which 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 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 not so determined, prescribed to be so by regulations.  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 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 prescribe the matters referred to for   the day on which the section 84AC commenced.

 

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(1) 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 all the criteria in subsection 85AB(4). This requires that there are no other 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 immediately 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.

 

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 already in Part T, or was already in Part T before the new determination.

 

This legislative instrument amends instrument number PB 95 of 2007 by removing “irbesartan with hydrochlorothiazide” from the drugs to be placed on F2 under subsection 85AB(1) and from the drugs to be placed in Part A of F2 under subsection 85AC(1).

 

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

 

The instrument is expressed to commence at 8pm on 30 November 2007 and is intended to have effect before commencement of PB 95 of 2007, which commences on 1 December 2007.

 

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 the implementation phases.

 


Attachment

 

 

Paragraph 1:  Provides that the instrument commences at 8pm on 30 November 2007.

 

Paragraph 2:   Determines that Schedule 1 amends PB 95 of 2007

 

Item 1 of Schedule 1:  omits “irbesartan with hydrochlorothiazide” from the drugs to be placed on F2

 

Item 2 of Schedule 1:  omits the word “and” after the word  “octreotide” in Item 3 of PB 95 of 2007

 

Item 3 of Schedule 1: omits “irbesartan with hydrochlorothiazide” from the drugs to be placed in Part A of F2.

 

 

 

 

 

Overview

The National Health Act 1953, amended in 2007, serves as the legislative foundation for the Pharmaceutical Benefits Scheme (PBS), ensuring that all Australians have reliable, timely, and affordable access to a broad spectrum of medicines. This Act is administered by the Parliament of Australia and aims to facilitate the provision of pharmaceutical benefits by the Commonwealth, as detailed in Part VII. In addressing the need for a more structured and efficient PBS, the Act introduced formularies F1 and F2 to classify listed drugs based on their brand exclusivity and therapeutic interchangeability, with specific provisions for statutory price reductions, price disclosure, and supply guarantees. This amendment determination, made under subsections 85AB(1) and 85AC(1), rectifies an earlier legislative instrument by removing "irbesartan with hydrochlorothiazide" from the list of drugs placed on F2 and subsequently from Part A of F2, effective before the commencement of another legislative instrument on 1 December 2007. This change was implemented following consultations with the pharmaceutical industry to ensure the policy's effectiveness and fairness in the market.

Scope and Application

The National Health Act 1953, as amended, establishes the Pharmaceutical Benefits Scheme (PBS), providing Australians with access to a range of medicines. The Act applies to the Commonwealth, which provides pharmaceutical benefits in accordance with Part VII of the Act. Drugs and medicinal preparations subject to the Act are declared by the Minister and are listed drugs as defined in the Act. The Act applies to both listed drugs and certain extemporaneously-prepared medicinal preparations. The Minister has the power to determine the form, manner of administration, and brand of pharmaceutical items, governing what constitutes a pharmaceutical benefit under Part VII. The Act provides for listed drugs to be assigned to formularies F1 and F2, with drugs on F1 intended for single brand drugs, and F2 for drugs with multiple brands or those interchangeable at the patient level. Drugs on F2 are further divided into Part A and Part T, intended for drugs where price competition between brands is high. These provisions apply to drugs determined to be on F1 or F2 by the Minister through legislative instruments or prescribed by regulations. The Act includes provisions for statutory price reductions, price disclosure, and guarantee of supply for drugs on F2. This legislative instrument amends a previous instrument by removing "irbesartan with hydrochlorothiazide" from the drugs to be placed on F2 and from the drugs to be placed in Part A of F2, effective before the commencement of the previous instrument.

Key Provisions

The operative sections of this legislative instrument primarily amend the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. Section 85AB(1) allows the Minister to determine by legislative instrument the placement of a listed drug on F1 or F2, while section 85AC(1) permits the Minister to determine by legislative instrument the placement of a drug on Part A or Part T of F2. This particular instrument removes "irbesartan with hydrochlorothiazide" from being placed on F2 and in Part A of F2, as specified in Schedule 1 of the instrument. These amendments are intended to have effect before the commencement of the previous legislative instrument, PB 95 of 2007. The obligations and requirements imposed by the Act on parties governed by it include the declaration of listed drugs by the Minister, as per subsection 85(2). The Act mandates that drugs and certain extemporaneously-prepared medicinal preparations must be declared by the Minister through a legislative instrument. Additionally, the Minister has the authority to determine the form of a listed drug, its administration, and its brand, as stipulated in subsections 85(3), 85(5), and 85(6), respectively. The Act further requires the assignment of listed drugs to formularies, specifically F1 and F2, and further divides F2 into Part A and Part T, based on the criteria set out in subsections 85AB(4) and 85AC(4). Under the Act, there are various civil and criminal consequences for breaches. While the specific penalties are not detailed in the Act, breaches of the PBS provisions may result in fines, imprisonment, or both. The penalties for breaches can vary depending on the severity and nature of the offence, and the courts have the discretion to impose appropriate sanctions. It is important to note that the specific penalties are not outlined in the provided text, and further research would be required to determine the exact penalties for breaches of the PBS provisions. In summary, this legislative instrument amends the placement of "irbesartan with hydrochlorothiazide" under the PBS by removing it from F2 and Part A of F2. The National Health Act 1953 governs the PBS and imposes obligations on the Minister to declare listed drugs and assign them to formularies. Breaches of the PBS provisions may result in civil and criminal consequences, including fines and imprisonment. However, the specific penalties for breaches are not detailed in the provided text.

Legal classification tags

Area of Law
Health Law
Instrument
Regulation
Concepts
Definitions & Interpretation
Regulatory Standards
Licensing & Registration

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.