EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 7)
PB 81 of 2018
Authority
This Instrument, made under subsection 85AB(1) of the National Health Act 1953 (the Act), amends the National Health (Listed drugs on F1 or F2) Determination 2010 (PB 93 of 2010) (the Principal Determination).
The Principal Determination provides for the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS).
Purpose
The Act provides that listed drugs may be assigned to formularies identified as F1 and F2.
F1 is intended for single brand drugs and F2 for drugs that have multiple brands, or are in a therapeutic group with other drugs with multiple brands. Drugs on F2 are subject to the provisions of the Act relating to first new brand statutory price reductions, price disclosure and guarantee of supply.
Section 84AC of the Act provides that a drug is on F1 or F2 if there is a determination in force under section 85AB that the drug is on F1 or F2.
Subsection 85AB(1) of the Act empowers the Minister (or delegate) 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. It also requires that the drug was not on F2 the day before the determination comes into effect. A drug may only be determined to be on F2 if it does not satisfy one or more of the criteria for F1 (subsection 85AB(3)).
When subsection 85AB(5) of the Act applies, which relates to listed drugs with a single brand combination item on the PBS, the listed drug is not placed on F1 or F2, but on the administrative combination drug list.
This Instrument (the Amending Determination) amends the Principal Determination by adding to F1 three new drugs – baricitinib; guanfacine; and perfluorohexyloctane.
Variation and revocation
Unless there is an express power to revoke or vary PB 93 of 2010 cited in this Instrument and explanatory statement, subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to revoke or vary PB 93 of 2010.
Consultation
The Amending Determination affects pharmaceutical companies with medicines listed on the PBS. Before drugs are listed and allocated to formularies, there are detailed consultations about the drug with the intended responsible person, and a recommendation is received from the Pharmaceutical Benefits Advisory Committee (PBAC). Any PBAC recommendation is made following receipt of submissions by affected pharmaceutical companies. 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. Further consultation on the Amending Determination was deemed unnecessary due to the consultation on allocation of the drugs to formularies with affected pharmaceutical companies that had already taken place.
The Amending Determination Instrument commences on 1 September 2018.
This Instrument constitutes a legislative instrument for the purpose of the
Legislation Act 2003.
Overview
The National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 7) was introduced to amend the National Health (Listed drugs on F1 or F2) Determination 2010 under the authority of subsection 85AB(1) of the National Health Act 1953. This amendment was enacted to address the need to update the allocation of certain drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). The F1 formulary is designated for single brand drugs, while F2 is for drugs that have multiple brands or are in therapeutic groups with other drugs that have multiple brands. The National Health Act 1953 empowers the Minister or a delegate to determine by legislative instrument whether a listed drug should be on F1 or F2, with criteria for F1 including the absence of bioequivalent or biosimilar listed brands of pharmaceutical items. The Amending Determination adds three new drugs—baricitinib, guanfacine, and perfluorohexyloctane—to F1. The amendment also revokes or varies the Principal Determination under the authority of subsection 33(3) of the Acts Interpretation Act 1901, where no express power to revoke or vary is cited in this Instrument and explanatory statement. Extensive consultation with pharmaceutical companies and the Pharmaceutical Benefits Advisory Committee preceded this amendment.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 7) applies to the allocation of listed drugs on the Pharmaceutical Benefits Scheme (PBS) formularies, specifically adding three new drugs to the F1 formulary. This determination is made under the authority of the National Health Act 1953, which allows the Minister or a delegate to determine by legislative instrument whether a listed drug is assigned to the F1 or F2 formularies. The F1 formulary is intended for single brand drugs, while the F2 formulary accommodates drugs that have multiple brands or belong to a therapeutic group with other drugs that have multiple brands. Drugs on F2 are subject to certain provisions of the Act, including first new brand statutory price reductions, price disclosure, and guarantee of supply. The Amending Determination affects pharmaceutical companies that have medicines listed on the PBS, and it is based on recommendations from the Pharmaceutical Benefits Advisory Committee, which includes members from various healthcare and consumer interests. The determination does not require further consultation beyond what has already occurred in the process of allocating drugs to the formularies. This instrument revokes or varies the National Health (Listed drugs on F1 or F2) Determination 2010, unless there is an express power cited in the Amending Determination, in which case subsection 33(3) of the Acts Interpretation Act 1901 is relied upon.
Key Provisions
The key sections of the National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 7) amend the National Health (Listed drugs on F1 or F2) Determination 2010 by adding three new drugs to F1: baricitinib, guanfacine, and perfluorohexyloctane (section 2). This determination is made under subsection 85AB(1) of the National Health Act 1953, which empowers the Minister to allocate listed drugs to formularies F1 or F2 based on certain criteria. F1 is designated for single brand drugs, while F2 is for drugs with multiple brands or those in a therapeutic group with other drugs having multiple brands. Drugs on F2 are subject to statutory price reductions, price disclosure, and supply guarantee provisions (section 3).
The obligations imposed by this amendment require that the drugs added to F1 meet the criteria set out in subsection 85AB(4) of the National Health Act 1953. Specifically, there should be no listed brands of pharmaceutical items that have the drug that are bioequivalent or biosimilar, and there should be no listed brands of pharmaceutical items that have another drug in the same therapeutic group that are bioequivalent or biosimilar. Additionally, the drug must not have been on F2 the day before the determination comes into effect (section 4). The amendment also specifies that for listed drugs with a single brand combination item on the Pharmaceutical Benefits Scheme (PBS), they are not placed on F1 or F2 but on the administrative combination drug list (subsection 85AB(5)).
There are no specific offences or penalties outlined in this determination. However, breaches of the National Health Act 1953 or the regulations made under it could result in civil or criminal consequences, depending on the nature of the breach. Penalties for breaches of the National Health Act 1953 can include fines and imprisonment. The maximum penalties are specified in the relevant sections of the Act and may vary depending on the type and severity of the offence. The determination itself does not specify any penalties but relies on the overarching legislative framework of the National Health Act 1953 for enforcement and consequences of non-compliance.