EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 80 OF 2009
NATIONAL HEALTH ACT 1953
DETERMINATION UNDER SUBSECTION 84AG(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 to be so 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.
Division 3A of Part VII contains a scheme for certain statutory price reductions under the PBS for listed brands of pharmaceutical items. For these pricing purposes listed drugs can be determined to belong to therapeutic groups. These are groups of drugs which are interchangeable on an individual patient basis. They are grouped together for pricing purposes as having similar health outcomes. This price linkage is demonstrated in paragraph 99ACH(2)(c) whereby statutory price reductions on the listing of a new brand of a pharmaceutical item that has a drug in a therapeutic group flow on to a listed brand of another pharmaceutical item that has another drug in the same therapeutic group which has the same manner of administration.
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. The National Health (Pharmaceutical Benefits) Regulations also prescribe therapeutic groups as authorised by subsection 84AG(6) with effect from the commencement of section 84AG. Where the Minister proposes to determine a new therapeutic group the advice in writing of the Pharmaceutical Benefits Advisory Committee (PBAC) must be obtained (subsection 84AG(1A)). In making a determination that listed drugs are in a therapeutic group, the Minister may have regard to any advice of the PBAC on whether a drug should or should not be treated as interchangeable on an individual patient basis with another drug (subsection 84AG(3)).
This legislative instrument repeals the current determination as amended under subsection 84AG(1) which determines the listed drugs that are in the therapeutic groups presently prescribed by regulation. It remakes that instrument and determines a new therapeutic group, the HMG Co-A reductase inhibitor higher potency group (the Statins-HP group) and that the drugs Atorvastatin and Rosuvastatin are in that group. This measure is in accordance with advice of the PBAC.
A provision-by-provision description of the instrument is contained in the Attachment.
The instrument is expressed to commence on 1 September 2009.
Consultations
Consultations on the content of the determination have been on the basis of advice from the PBAC in relation to the new therapeutic group and that the drugs to be included in the group are interchangeable on an individual patient basis. 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. The Department has also consulted with the drug companies responsible for these drugs.
Attachment
Paragraph 1: Provides that the instrument commences on 1 September 2009.
Paragraph 2: Repeals PB 60 of 2007.
Paragraph 3: Defines the therapeutic groups by reference to the shorter terminology for the groups used in the table in Schedule 1.
Paragraph 4: Determines the new therapeutic group - the HMG Co-A reductase inhibitor higher potency group.
Paragraph 5: Determines that the listed drugs as set out in Schedule 1 belong to the therapeutic groups mentioned for them and are therefore in the same therapeutic group as other listed drugs for which the therapeutic group is mentioned.
Schedule 1: Schedule 1 sets out the therapeutic groups and the listed drugs belonging to them in accordance with the above. The content of Schedule 1 is the same as in repealed PB 60 of 2007 with the addition of the new therapeutic group and the listed drugs Atorvastatin and Rosuvastatin for that group.