EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 20 OF 2011
NATIONAL HEALTH ACT 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.3)
Purpose
This instrument, made under subsection 85AB(1) of the National Health Act 1953 (the Act), amends the principal determination, the National Health (Listed drugs on F1 or F2) Determination 2010 (PB 93 of 2010) to provide for allocation of drugs to the F1 and F2 formularies for the Pharmaceutical Benefits Scheme (PBS).
Background
Part VII of the National Health Act 1953 (the Act) is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the 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 under subsection 85(2). These are listed drugs as defined in subsection 84(1).
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 statutory price reductions, price disclosure and guarantee of supply.
Section 84AC relevantly 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) 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. 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)).
Details of this Instrument
This instrument places drugs into the F1 or F2 formulary for the PBS. It adds the listed drug Citrulline with carbohydrate to F1, and moves the listed drug Docetaxel from F1 to F2. Minor clarification amendments to F1 and F2 have also been made to correct one typographical error in each formulary.
Consultation
The instrument 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.
General
This instrument commences on 1 March 2011.
This instrument constitutes a legislative instrument for the purpose of the
Legislative Instruments Act 2003.
Overview
The National Health (Listed Drugs on F1 or F2) Amendment Determination 2011 (No. 3) was enacted in 2011 to amend the National Health (Listed Drugs on F1 or F2) Determination 2010. This legislative instrument was introduced to address the need for the allocation of drugs to the F1 and F2 formularies for the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. The Act, which was enacted by the Australian Parliament, aims to ensure reliable, timely, and affordable access to a wide range of medicines for all Australians through the PBS. The policy objective of this amendment is to refine the classification of drugs within the PBS by adjusting their placement in the F1 and F2 formularies, thereby facilitating better management and regulation of pharmaceutical benefits. This amendment was made under the authority provided by the National Health Act 1953 and came into effect on 1 March 2011.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.3) applies to the Pharmaceutical Benefits Scheme (PBS), which is overseen by the Commonwealth under the National Health Act 1953. The Act mandates the Commonwealth to provide reliable, timely, and affordable access to a wide range of medicines for all Australians. The legislation applies to entities involved in the pharmaceutical industry, specifically pharmaceutical companies that have drugs listed on the PBS. The instrument amends the National Health (Listed drugs on F1 or F2) Determination 2010 by allocating drugs to either the F1 or F2 formularies within the PBS. Drugs on F1 are typically single brand items, while those on F2 can have multiple brands or fall within a therapeutic group with other multiple-brand drugs. This determination involves the allocation of the drug Citrulline with carbohydrate to F1 and the movement of Docetaxel from F1 to F2. The instrument also contains minor clarification amendments to correct typographical errors within each formulary. The changes made by this instrument are applicable nationally across Australia and are effective from 1 March 2011. This instrument constitutes a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Key Provisions
The main sections of the National Health (Listed Drugs on F1 or F2) Amendment Determination 2011 (No.3) (the Determination) are subsections 85AB(1), 85AB(3), and 85AB(4) of the National Health Act 1953 (the Act). Subsection 85AB(1) empowers the Minister to determine by legislative instrument that a listed drug is on F1 or F2. A drug may only be determined to be on F1 if it satisfies the criteria in subsection 85AB(4), which 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)). The Determination itself allocates the listed drug Citrulline with carbohydrate to F1 and moves the listed drug Docetaxel from F1 to F2. Minor clarification amendments to F1 and F2 have also been made to correct one typographical error in each formulary.
The Act imposes certain obligations on parties and entities it governs. Pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS) are affected by this Determination. 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. These consultations and recommendations are integral to the process of determining which formulary a drug should be allocated to.
The Act provides for offences, penalties, or civil/criminal consequences for breach. However, the Determination itself does not specify any penalties for breach of its provisions. Instead, any breach of the Act or its regulations would be subject to the penalties provided in the Act itself. For example, subsection 85AA(3) of the Act provides that a person who contravenes a determination under section 85AB is liable to a penalty of up to $22,200. This penalty is subject to the Crimes Act 1914 and is the maximum penalty for an individual. The Determination therefore operates within the broader framework of the Act, which provides for enforcement and penalties in the event of non-compliance.