EXPLANATORY STATEMENT
NATIONAL HEALTH ACT 1953
DECLARATION UNDER SUBSECTION 85(2AA)
NO. PB 49 OF 2006
Purpose and operation
- The purpose of the Australian Pharmaceutical Benefits Scheme (PBS) is to provide timely, reliable and affordable access for the Australian community to necessary and cost-effective medicines.
2. The PBS is regulated by Part VII of the National Health Act 1953 (the Act), which provides for the supply of listed drugs and medicinal preparations as pharmaceutical benefits.
3. “Pharmaceutical benefit” is defined under subsection 84(1) of the Act as a drug or medicinal preparation in relation to which, by virtue of section 85 of the Act, Part VII of the Act applies.
4. Subsection 85(2) of the Act empowers the Minister to declare the drugs and medicinal preparations to which Part VII of the Act applies.
5. Subsection 85(2AA) of the Act allows the Minister to declare, by instrument in writing, that a drug or medicinal preparation, or class of drugs and medicinal preparations, shall cease to be a drug or medicinal preparation, or a class of drugs or medicinal preparations, to which Part VII of the Act applies.
6. Subsection 85(2AB) of the Act provides that before making a declaration under subsection 85(2AA), the Minister shall obtain the advice in writing of the Pharmaceutical Benefits Advisory Committee (PBAC) in relation to the proposed declaration.
7. Subsection 85(2AC) of the Act provides that an advice under subsection 85(2AB) from the PBAC shall be laid before each House of the Parliament with the declaration under subsection 85(2AA) to which it relates.
8. The declaration specifies the names of drugs and medicinal preparations that the delegate of the Minister has declared no longer to be pharmaceutical benefits under Part VII of the Act as from 1 December 2006. The advice from the PBAC agrees to the deletion from the list of pharmaceutical benefits of the drugs named by the delegate in the declaration and the reasons for the agreement.
Consultations
9. The PBAC is the independent expert body, established by section 100A of the Act, which makes recommendations to the Minister for Health and Ageing about which drugs and medicinal preparations should be available as pharmaceutical benefits. Under subsection 101(4) of the Act, a drug or medicinal preparation may not be declared to be a drug or medicinal preparation to which Part VII of the Act applies unless the PBAC has recommended that it be so declared. When recommending a medicine be listed on the PBS, the PBAC takes into account the medical conditions for which the medicine has been approved for use in Australia, its clinical effectiveness, safety and cost-effectiveness compared with other treatments.
10. The declaration gives effect to recommendations made by the PBAC. PBAC members are selected from consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and specialists, with at least one member selected from each of those interests or professions. Remaining members are persons whom the Minister is satisfied have qualifications and experience in a field relevant to the functions of the PBAC, and that would enable them to contribute meaningfully to the deliberations of the PBAC.
11. Details of the declaration are set out in the Attachment.
12. This declaration is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
13. The declaration was made on 7 November 2006 and came into operation with effect from 1 December 2006.
ATTACHMENT
Paragraph 1 provides that this declaration commences on 1 December 2006.
Paragraph 2 lists the drugs and medicinal preparations which are no longer pharmaceutical benefits.
Overview
The National Health Act 1953, enacted by the Australian Parliament, governs the Australian Pharmaceutical Benefits Scheme (PBS), aiming to ensure timely, reliable, and affordable access to necessary and cost-effective medicines for the Australian community. Part VII of the Act regulates the PBS by providing for the supply of listed drugs and medicinal preparations as pharmaceutical benefits. The Act empowers the Minister to declare which drugs and medicinal preparations are covered by Part VII, with the Pharmaceutical Benefits Advisory Committee (PBAC) providing essential advice on such declarations. The explanatory statement for F2006L03688 details a declaration under subsection 85(2AA) of the Act, specifying that certain drugs and medicinal preparations will cease to be pharmaceutical benefits as of 1 December 2006. This decision follows the PBAC's advice and aligns with the Act's policy objective of maintaining a cost-effective and clinically relevant list of pharmaceutical benefits.
Scope and Application
The Australian Pharmaceutical Benefits Scheme (PBS), which is regulated by Part VII of the National Health Act 1953, aims to provide timely, reliable and affordable access to necessary and cost-effective medicines for the Australian community. The Minister, under subsection 85(2AA) of the Act, has the authority to declare certain drugs and medicinal preparations, or classes thereof, to cease being pharmaceutical benefits. This power is exercised through written instruments, following the receipt of written advice from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC, established under section 100A of the Act, is an independent expert body that recommends to the Minister which drugs and medicinal preparations should be available as pharmaceutical benefits, considering factors such as clinical effectiveness, safety, and cost-effectiveness. The declaration, which specifies the names of drugs and medicinal preparations no longer considered pharmaceutical benefits under Part VII of the Act, is effective from 1 December 2006 and aligns with the PBAC’s advice. The Act’s application is national, covering all entities and persons within Australia, including relevant industries and their transactions, subject to the exclusions and exemptions specified within the Act and its subordinate instruments.
Key Provisions
The primary sections of the National Health Act 1953 relevant to this legislative instrument are sections 85(2AA) and 85(2AB). Section 85(2AA) empowers the Minister to declare, by written instrument, that certain drugs or medicinal preparations, or classes of such items, shall cease to be pharmaceutical benefits under Part VII of the Act. Section 85(2AB) mandates that before making such a declaration, the Minister must obtain written advice from the Pharmaceutical Benefits Advisory Committee (PBAC) regarding the proposed declaration. This advice must then be laid before each House of the Parliament alongside the declaration. The declaration specifies the names of drugs and medicinal preparations that will no longer be considered pharmaceutical benefits, effective from 1 December 2006, and includes the PBAC's advice agreeing to the removal of these items from the list of pharmaceutical benefits, along with the reasons for this agreement.
Under the Act, the Minister has the responsibility to ensure that the process for declaring certain drugs or medicinal preparations as no longer being pharmaceutical benefits is thoroughly vetted and justified. This involves consulting with the PBAC, an independent expert body established to make recommendations about which drugs and medicinal preparations should be available as pharmaceutical benefits. The PBAC's role includes recommending whether a drug or medicinal preparation should be included on the Pharmaceutical Benefits Scheme (PBS) based on factors such as medical conditions for which the medicine has been approved, its clinical effectiveness, safety, and cost-effectiveness compared to other treatments. The Minister must act in accordance with the advice provided by the PBAC before making any declaration under section 85(2AA).
Failure to comply with the requirements of the Act, including not obtaining the necessary advice from the PBAC before making a declaration, can result in significant consequences. While the specific penalties for non-compliance are not detailed in the explanatory statement, breaches of legislative instruments can generally lead to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties may include fines, while criminal penalties could involve imprisonment, reflecting the seriousness with which the Act treats its provisions. The precise penalties would be determined by the courts based on the specific circumstances of any alleged breach.