EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 27 OF 2010
NATIONAL HEALTH ACT 1953
DETERMINATION UNDER SUBSECTION 84AE(3B)
This legislative instrument is made pursuant to subsection 84AE(3B) of the National Health Act 1953 (“the Act”) and determines that certain brands of pharmaceutical item cease to be co-marketed brands of a pharmaceutical item.
Part VII of the Act provides for the supply of drugs and medicinal preparations under Commonwealth subsidy (commonly known as the Pharmaceutical Benefits Scheme - “PBS”), by which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.
Drugs and medicinal preparations to which Part VII applies are declared by the Minister by legislative instrument under subsection 85(2) of the Act. A drug or medicinal preparation for which there is a declaration under subsection 85(2) is a listed drug for the purpose of the PBS. The Act provides for listed drugs to be assigned to formularies, identified as F1 and F2. F1 is intended to be for single brand drugs and F2 is intended to be for drugs that have multiple brands or are interchangeable at the patient level with other drugs.
The Minister may also determine by legislative instrument the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)) and the manner of administration of the form of the listed drug so determined (subsection 85(5)). If a drug has a declaration under subsection 85(2) in force in respect of it and determinations under subsections 85(3) and 85(5) in force in respect of it, then that declared drug in that determined form with that determined manner of administration is a pharmaceutical item. The Minister may also determine, by legislative instrument, brands of pharmaceutical items (subsection 85(6)).
Section 84AE provides for the concept of co-marketed brands. Co-marketed brands of a pharmaceutical item are treated as a single brand of the item for the purposes of the criteria for allocating drugs to formularies in section 85AB. Multiple brand drugs are not eligible for F1 under the criteria set out in section 85AB. However, as co-marketed brands are treated as a single brand, listed drugs in co-marketed brands of a pharmaceutical item are not disqualified from being on F1.
Co-marketed brands that were included on F1 at the commencement of section 84AE (1 August 2007) are prescribed in the National Health (Pharmaceutical Benefits) Regulations 1960 (“the Regulations”).
Paragraph 84AE(3B)(b) provides that the Minister may, by legislative instrument, determine that all brands (“the co-marketed brands”) that are prescribed by the Regulations as being co-marketed brands of a pharmaceutical item (“the co-marketed item”) cease to be co-marketed brands of the co-marketed item if another brand is a listed brand of the co-marketed item.
This legislative instrument provides that brands of a pharmaceutical item specified in columns 2 and 3 of an item specified in column 1 of the Schedule cease to be co-marketed brands of the pharmaceutical item.
The instrument is expressed to commence on 1 April 2010 after PB 16 of 2010 commences.
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. When drugs are listed on the PBS each drug is allocated into a formulary (F1 or F2) from the recommendation of the PBAC.
Co-marketed brands and the criteria used to determine the placement of listed drugs on formularies were introduced into the Act by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007 (“the 2007 PBS Reforms”). The pharmaceutical industry was consulted during both the policy development and implementation phases of the 2007 PBS Reforms. This instrument arises out of the 2007 PBS Reforms and is machinery in nature.
Overview
The National Health Act 1953, enacted by the Parliament of Australia, addresses the regulation of the supply of drugs and medicinal preparations under the Commonwealth subsidy system, known as the Pharmaceutical Benefits Scheme (PBS). This Act ensures that Australians have reliable, timely, and affordable access to a wide range of medicines. Under this Act, the Minister for Health has the authority to declare drugs and medicinal preparations, determine their forms and administration, and assign them to formularies, specifically F1 for single brand drugs and F2 for multiple brand drugs or those interchangeable at the patient level. The concept of co-marketed brands introduced by the National Health Amendment (Pharmaceutical Benefits Scheme) Act 2007 allows multiple brands of a pharmaceutical item to be treated as a single brand for the purposes of formulary allocation, permitting them to remain eligible for F1 placement. The policy objective behind these provisions is to manage the PBS effectively, ensuring that the most suitable drugs are placed in the appropriate formularies to benefit patients while maintaining cost-efficiency.
Scope and Application
The instrument, F2010L00799, is a legislative tool made under subsection 84AE(3B) of the National Health Act 1953. It pertains to the Pharmaceutical Benefits Scheme (PBS), which facilitates affordable access to a range of medicines for all Australians. This instrument specifically addresses co-marketed brands of pharmaceutical items, determining that certain brands cease to be co-marketed for the purposes of the PBS. The Act applies to pharmaceutical companies with medicines listed on the PBS and affects the allocation of these drugs to formularies, specifically F1 and F2. The instrument's scope extends to Commonwealth jurisdiction, and it comes into effect on 1 April 2010. The changes outlined in this instrument are a result of consultations and recommendations from the Therapeutic Goods Administration and the Pharmaceutical Benefits Advisory Committee, reflecting the legislative adjustments introduced by the 2007 PBS Reforms.
Key Provisions
The legislative instrument F2010L00799, made under subsection 84AE(3B) of the National Health Act 1953, outlines the cessation of certain pharmaceutical brands from being co-marketed brands of specific pharmaceutical items. This determination is effective under the Pharmaceutical Benefits Scheme (PBS), which is designed to ensure Australians have access to affordable medications. According to section 84AE(3B), the Minister may, by legislative instrument, decide that specific brands cease to be co-marketed brands of a pharmaceutical item if another brand of the same item is listed on the PBS. This legislative instrument specifies that the brands listed in columns 2 and 3 of the Schedule will no longer be co-marketed brands of the pharmaceutical item listed in column 1.
The Act imposes several obligations on the parties involved. Pharmaceutical companies must ensure that their products comply with the PBS regulations and the criteria for listing on formularies F1 or F2. Companies must also keep abreast of any changes in the determination of co-marketed brands and adjust their marketing and supply strategies accordingly. The Minister has the responsibility to monitor and enforce compliance with the PBS and to make determinations regarding co-marketed brands as necessary. Compliance with these provisions is critical for maintaining the integrity of the PBS and ensuring that Australians can access necessary medications.
Violations of the provisions in the National Health Act 1953 can result in various penalties and consequences. While the Act does not specify criminal penalties for breaches related to the cessation of co-marketed brands, non-compliance with PBS regulations can lead to civil penalties. For instance, pharmaceutical companies may face fines, and in severe cases, the Commonwealth may take action to remove non-compliant drugs from the PBS. Additionally, companies that fail to comply with the criteria for listing drugs on the PBS may face reputational damage and loss of market share, as the PBS is a significant determinant of pharmaceutical market access in Australia.