EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 94 OF 2010
NATIONAL HEALTH ACT 1953
NATIONAL HEALTH (LISTED DRUGS IN PART A
OR PART T OF F2) DETERMINATION 2010
Summary
This legislative instrument determines, under subsection 85AC(1) of the National Health Act 1953 (the Act), which Pharmaceutical Benefits Scheme listed drugs on F2 are on Part A of F2, and which are on Part T of F2. It revokes two instruments made under s85AB(1) and 85AC(1) of the Act.
Background
Part VII of the Act is the legislative basis for the Pharmaceutical Benefits Scheme (PBS) through which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines to all Australians.
Subsection 85(1) states that pharmaceutical benefits shall be provided by the Commonwealth in accordance with Part VII.
Subsection 85(2) provides that the Minister may by legislative instrument declare that Part VII applies to particular drugs and medicinal preparations. These then become ‘listed drugs’ as defined in subsection 84(1).
The Minister can by legislative instrument determine:
- the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)), for example, a 70 milligram tablet;
- the manner of administration of the form of the listed drug so determined (subsection 85(5)) for example, oral; 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)).
The Act provides that listed drugs may be assigned to one of two formularies, identified as F1 and F2. F1 contains single brand drugs, while F2 is made up of drugs that have been or are either (i) available in multiple brands, or (ii) in a ‘therapeutic group’ with at least one drug that has been or is available in multiple brands. All drugs on F2 are subject to the provisions of the Act relating to price reductions, price disclosure, and guarantee of supply.
Subsection 85AB 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 the criteria in subsection 85AB(4). This requires that there are no listed brands of pharmaceutical items that have the drug that are bioequivalent or biosimilar, and no listed brands of pharmaceutical items that have another drug in the same ‘therapeutic group’ as the first drug that are bioequivalent or biosimilar. The criteria also requires that the drug was not on F2 on the day before the F1 determination comes into force. 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 to determine by legislative instrument that drugs on F2 are in Part A or Part T of F2. F2 Part T contains multiple brand medicines subject to high levels of price competition, plus single brand medicines which belong to a therapeutic group which contains at least one multiple brand medicine subject to high levels of competition. The remainder of F2 drugs may be listed in Part A. The division of F2 into two parts will cease on 1 January 2011, or earlier if amendments proposed in the National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2010 (the Bill) come into force to merge the F2 formulary before that day.
Drugs are also allocated to formularies under the National Health (Pharmaceutical Benefits) Regulations 1960 (the Regulations). The Act provides that an instrument determining a drug to be on F2 overrides any prescription of that drug to be on F1 in the Regulations.
As a result of allocation of drugs to formularies both under the Regulations and in instruments made under subsections 85AB(1) and 85AC(1) since 1 August 2007, the current formulary status for drugs is not always easy to identify.
This Instrument
It is therefore intended that this instrument, along with a consolidating instrument allocating drugs to F1 and F2, provide a consolidation of formulary allocations. This will improve efficiency in administering the PBS, transparency and public access to the law.
This Determination affects pharmaceutical companies with medicines listed on the PBS that are allocated to F2A or F2T. In recent years, prior to the introduction of legislation in 2007 which established the formularies, there was extensive consultation with the pharmaceutical industry. Companies affected by formulary allocations have been involved in detailed consultations about listing of their drugs and changes to listing status.
A provision-by-provision description of the instrument is contained in the Attachment.
This Determination is expressed to commence upon the commencement of the National Health (Listed drugs on F1 or F2) Determination 2010. That Determination is expressed to commence on 11 October 2010.
This Determination is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
ATTACHMENT
Section 1 – Name of Determination
This section provides for the name of the determination.
Section 2 - Commencement
This section provides that the determination commences on the commencement of the National Health (Listed drugs on F1 or F2) Determination 2010, which is expressed to commence on 11 October 2010.
Section 3 - Repeal
This section repeals two earlier determinations made under subsections 85AB(1) and 85AC(1) of the National Health Act 1953 – PB 75 of 2007 made on 7 September 2007, and PB 95 of 2007 made on 5 November 2007.
Section 4 - Definition
This section defines ‘the Act’ to mean the National Health Act 1953.
Section 5 – Drugs on Part A of F2
This section provides that the drugs listed in Schedule 1 are on Part A of F2.
Section 6 - Drugs on Part T of F2
This section provides that the drugs listed in Schedule 2 are on Part T of F2.
Schedule 1 – Drugs on Part A of F2
Schedule 1 lists drugs in Part A of F2.
Schedule 2 – Drugs on Part T of F2
Schedule 2 lists drugs in Part T of F2.