National Health Act 1953 - Determination under subsection 84AG(1) - Drugs in the same therapeutic group (No. PB 80 of 2009)

Administered by Department of Health, Disability and Ageing

Legislation au F2009L03351 Not in force Legislative Instrument

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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.

 

 

 

 

 

 

Overview

The National Health Act 1953, enacted by the Parliament of Australia, establishes the Pharmaceutical Benefits Scheme (PBS) to ensure all Australians have reliable, timely, and affordable access to a wide range of medicines. Under Part VII of the Act, the Commonwealth provides pharmaceutical benefits as declared by the Minister through legislative instruments. This Act was introduced to address the need for a structured and equitable system for providing access to necessary medications. The National Health (Pharmaceutical Benefits) Determination 2009, instrument number PB 80 of 2009, further refines the PBS by determining therapeutic groups of listed drugs and their interchangeability on an individual patient basis. This determination, made in accordance with advice from the Pharmaceutical Benefits Advisory Committee, includes the establishment of a new therapeutic group, the HMG Co-A reductase inhibitor higher potency group, comprising the drugs Atorvastatin and Rosuvastatin, effective from 1 September 2009. This measure aims to streamline pricing and ensure equitable access within therapeutically equivalent drug groups.

Scope and Application

The National Health Act 1953, specifically Part VII, establishes the Pharmaceutical Benefits Scheme (PBS) under which the Commonwealth ensures Australians have access to a reliable, timely, and affordable range of medicines. The Act applies to all individuals residing in Australia and encompasses a broad array of pharmaceutical benefits, including listed drugs and certain extemporaneously-prepared medicinal preparations. These drugs are declared by the Minister through legislative instruments and are defined in the Act. The Act's jurisdiction is national, extending across the Commonwealth of Australia. Therapeutic groups, which are groups of drugs that are interchangeable on an individual patient basis, are also governed under this Act and are used to determine statutory price reductions. The Minister can determine these groups and the drugs within them, subject to advice from the Pharmaceutical Benefits Advisory Committee (PBAC). This legislative instrument, PB 80 of 2009, repeals previous determinations and introduces a new therapeutic group, the HMG Co-A reductase inhibitor higher potency group (Statins-HP group), including the drugs Atorvastatin and Rosuvastatin, based on PBAC advice. The instrument is designed to enhance the pricing scheme under the PBS by ensuring that price reductions flow on to all listed brands of pharmaceutical items within the same therapeutic group, thus maintaining affordability and access to essential medications for all Australians.

Key Provisions

The main sections of the National Health (Pharmaceutical Benefits) Determination 2009 (No. 1) provide a framework for determining therapeutic groups under the Pharmaceutical Benefits Scheme (PBS) (subsection 84AG(1)). This legislative instrument, which came into effect on 1 September 2009, outlines how drugs are categorised into therapeutic groups, which are essential for pricing and reimbursement purposes under the PBS. It determines that Atorvastatin and Rosuvastatin are in the newly established HMG Co-A reductase inhibitor higher potency group (Statins-HP group), as per the Pharmaceutical Benefits Advisory Committee's (PBAC) advice (paragraphs 3 to 5). The Act imposes specific obligations on the Minister for Health, who is responsible for determining therapeutic groups and the drugs that belong to them. This includes obtaining written advice from the PBAC before proposing a new therapeutic group (subsection 84AG(1A)) and considering the PBAC’s advice on the interchangeability of drugs on an individual patient basis (subsection 84AG(3)). Additionally, the Minister must ensure that the drugs listed in the therapeutic groups are those that have been declared by legislative instrument under subsection 85(2) of the Act. These obligations are critical to ensure that the PBS remains effective and equitable. Failure to comply with the provisions of this legislation can result in significant consequences. Although the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences, it is reasonable to infer that non-compliance with the Minister’s obligations could lead to legal challenges or administrative penalties. Given that the PBS is a statutory scheme designed to provide reliable, timely, and affordable access to medicines, any breach in the legislative process could undermine these objectives, potentially leading to higher healthcare costs for consumers or reduced access to essential medications. While the exact penalties are not specified, they could include fines or other administrative sanctions under the broader legislative framework governing the PBS.

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