EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 33 OF 2011
NATIONAL HEALTH ACT 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.5)
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
PB 93 of 2010 maintains a list of all F1 and F2 drugs that are currently listed on the PBS. This instrument removes one drug, copper sulphate, from F1 as it will no longer be listed on the PBS from 1 May 2011.
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 May 2011.
This instrument constitutes a legislative instrument for the purpose of the
Legislative Instruments Act 2003.
Overview
The National Health Act 1953, enacted by the Australian Parliament, provides the legislative basis for the Pharmaceutical Benefits Scheme (PBS), which ensures Australians have access to affordable and reliable medicines. To address the need for systematic allocation of drugs to the PBS formularies, the National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.5) was introduced. This instrument amends the National Health (Listed drugs on F1 or F2) Determination 2010, aligning with the policy objective of effectively managing the listing and classification of drugs within the PBS. The instrument removes copper sulphate from the F1 formulary, reflecting its removal from the PBS list, effective from 1 May 2011. The determination process involves comprehensive consultation with pharmaceutical companies and recommendations from the Pharmaceutical Benefits Advisory Committee, which comprises experts from various relevant fields. This instrument aims to maintain the integrity and functionality of the PBS by ensuring that drugs are appropriately categorised according to their therapeutic and market characteristics.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.5) amends the National Health (Listed drugs on F1 or F2) Determination 2010, which pertains to the allocation of drugs to the F1 and F2 formularies for the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. The Act applies to listed drugs, which are those declared by the Minister under the Act to be eligible for pharmaceutical benefits. The F1 formulary is intended for single brand drugs, while the F2 formulary is designated for drugs with multiple brands or those in a therapeutic group with multiple brands, subject to statutory price reductions, price disclosure, and a guarantee of supply. This instrument removes copper sulphate from the F1 list as it will cease to be listed on the PBS from 1 May 2011. The amendment affects pharmaceutical companies with medicines listed on the PBS, with decisions regarding drug allocation to formularies being made following consultations with the Pharmaceutical Benefits Advisory Committee (PBAC), which includes representatives from various healthcare interests.
Key Provisions
The National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No. 5) (the Determination) amends the National Health (Listed drugs on F1 or F2) Determination 2010 (No. 93 of 2010). The primary focus of this amendment is the allocation of drugs to the F1 and F2 formularies within the Pharmaceutical Benefits Scheme (PBS), as per section 85AB of the National Health Act 1953 (the Act). Specifically, it removes copper sulphate from F1 as it will no longer be listed on the PBS from 1 May 2011. This amendment reflects the Minister's authority to determine, by legislative instrument, which listed drugs are assigned to F1 or F2, as outlined in subsection 85AB(1). To qualify for F1, a drug must meet specific criteria, such as having no bioequivalent or biosimilar listed brands and not having been on F2 the day before the determination takes effect (subsection 85AB(4)). Conversely, a drug may only be placed on F2 if it fails to meet one or more of the F1 criteria (subsection 85AB(3)).
The Determination imposes several obligations on the parties involved, primarily pharmaceutical companies with medicines listed on the PBS. These companies must adhere to the criteria set forth in the Act for drug allocation to F1 and F2. Before any drug is listed and assigned to a formulary, thorough consultations are mandated with the intended responsible person, and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC) must be considered. The PBAC, which comprises experts from various fields such as consumers, health economists, and medical specialists, provides recommendations following submissions from affected pharmaceutical companies. This ensures that the drug allocation process is both comprehensive and balanced, taking into account the interests of multiple stakeholders.
Failure to comply with the provisions of the Act and the Determination may result in various consequences. While the specific offences, penalties, or consequences for breach are not detailed in the Explanatory Statement, the Act generally provides for both civil and criminal penalties for non-compliance with its provisions. Typically, breaches of the National Health Act 1953 could result in fines, imprisonment, or both, depending on the severity and nature of the breach. For example, under the Act, penalties for providing misleading or deceptive information about a drug listed on the PBS can include fines of up to $11,000 for individuals and $55,000 for corporations, along with potential imprisonment terms. The exact penalties would be determined based on the specific breach and the applicable provisions of the Act.