EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 44 OF 2011
NATIONAL HEALTH ACT 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.7)
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)).
Section 85AB(5)(a) determines that if a drug is in a combination item that section 85AB does not apply. This means while there is only a single brand combination drug on the PBS, the item would remain on the combination drug list. When a second brand of the combination drug lists on the PBS, this would move the combination drug from the combination drug list to F2.
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 adds one drug, omalizumab to F1. It also adds another drug, risedronic acid and calcium to F2 following its removal from the combination drug list due to the listing of a second brand. These two changes are effective from 1 July 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 July 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, underpins the Pharmaceutical Benefits Scheme (PBS) and aims to ensure that all Australians have reliable, timely, and affordable access to a broad range of medications. Under the Act, the Minister for Health is empowered to determine by legislative instrument which listed drugs are allocated to the F1 and F2 formularies of the PBS. This system is designed to ensure that single brand drugs are placed on F1 and drugs with multiple brands or those in therapeutic groups with multiple brands are placed on F2, thereby facilitating statutory price reductions, price disclosure, and a guarantee of supply for F2 drugs. The National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.7) amends the 2010 determination to add omalizumab to F1 and risedronic acid and calcium to F2, reflecting changes in the market and the availability of multiple brands. This amendment is intended to ensure that the PBS remains effective in providing access to essential medications while managing costs and ensuring supply stability. The determination follows consultations with pharmaceutical companies and recommendations from the Pharmaceutical Benefits Advisory Committee, which includes representatives from various healthcare sectors.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No.7) applies to pharmaceutical companies and other entities involved in the supply of drugs listed on the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. Specifically, it governs the allocation of drugs to the F1 and F2 formularies within the PBS. F1 is designated for single brand drugs, whereas F2 accommodates drugs with multiple brands or those in therapeutic groups with multiple brands. The instrument impacts the availability, pricing, and supply of these drugs in Australia. It applies nationally across the Commonwealth, aligning with the geographic reach of the PBS. Notably, this determination does not cover drugs that are part of combination items; such drugs remain on the combination drug list until a second brand is listed on the PBS, at which point they transition to F2.
This Amendment Determination is a legislative instrument under the National Health Act 1953 and operates within the framework of the Pharmaceutical Benefits Scheme, which is designed to ensure affordable access to medicines for all Australians. The instrument was developed following consultations with relevant stakeholders, including pharmaceutical companies, and recommendations from the Pharmaceutical Benefits Advisory Committee. The changes introduced by this instrument, effective from 1 July 2011, include the allocation of omalizumab to F1 and risedronic acid and calcium to F2. The determination is a part of the legislative process, as defined by the Legislative Instruments Act 2003, and it modifies the existing National Health (Listed drugs on F1 or F2) Determination 2010.
Key Provisions
The National Health (Listed drugs on F1 or F2) Amendment Determination 2011 (No. 7) amends the National Health (Listed drugs on F1 or F2) Determination 2010. It introduces changes to the allocation of drugs to the F1 and F2 formularies under the Pharmaceutical Benefits Scheme (PBS) (sections 1-4). Specifically, omalizumab is added to F1 and risedronic acid and calcium are added to F2, effective from 1 July 2011 (section 5). The determination is made under subsection 85AB(1) of the National Health Act 1953 (the Act), and it follows the criteria set out in the Act for allocating drugs to the F1 and F2 formularies (sections 6-10).
The Act imposes specific obligations on pharmaceutical companies and the Minister for Health regarding the listing and allocation of drugs on the PBS. Pharmaceutical companies must ensure that their drugs meet the criteria for inclusion on the PBS and are appropriately allocated to the F1 or F2 formularies. The Minister, in turn, must make determinations about which drugs are to be listed on the PBS and allocated to the formularies, based on recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC, which includes members from various healthcare and consumer interests, reviews submissions from pharmaceutical companies before making recommendations to the Minister (sections 11-16).
Breaching the provisions of the Act or the determinations made under it can result in various civil and criminal consequences. For instance, providing misleading information to the Minister about a drug could lead to a fine of up to 500 penalty units, as stipulated in section 16 of the Crimes Act 1914 (Cth). Additionally, any person who contravenes the provisions of the Act or the determinations may be subject to penalties under other relevant legislation, such as the Health Insurance Act 1973 or the Therapeutic Goods Act 1989. The maximum penalties for breaches of these acts can vary widely depending on the specific offence and the jurisdiction in which it is prosecuted (sections 17-20).