EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 12)
PB 112 of 2016
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 three new drugs – grazoprevir with elbasvir, mepolizumab and riociguat to F1 and removes the drugs glycomacropeptide and essential amino acids; and milk powder-lactose modified from F1 as these drugs are no longer PBS listed.
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 consultations with affected pharmaceutical companies on allocation of the drugs to formularies having already taken place.
The Amending Determination Instrument commences on 1 January 2017.
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 2016 (No. 12) amends the National Health (Listed drugs on F1 or F2) Determination 2010 under the National Health Act 1953. The primary objective of the Act is to regulate the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). F1 is designated for single brand drugs, while F2 is for drugs with multiple brands or those in therapeutic groups with multiple brands. This amendment responds to the need for updating the formularies to include new drugs and remove those that are no longer listed on the PBS. The determination was enacted by the Minister for Health under subsection 85AB(1) of the National Health Act 1953, which empowers the Minister to assign drugs to the F1 or F2 formularies via legislative instruments. This Instrument adds three new drugs to F1 and removes others that are no longer PBS-listed, reflecting the dynamic nature of the PBS in accommodating new medical treatments and phasing out outdated ones.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 12) amends the National Health (Listed drugs on F1 or F2) Determination 2010 by adjusting the allocation of certain drugs within the Pharmaceutical Benefits Scheme (PBS) formularies, specifically F1 and F2. This determination applies to listed drugs and the entities involved in their manufacture, distribution, and supply within Australia. The F1 formulary is designated for single-brand drugs, whereas F2 is for drugs with multiple brands or within a therapeutic group that includes other drugs with multiple brands. The amendment includes the addition of three new drugs—grazoprevir with elbasvir, mepolizumab, and riociguat—to F1 and the removal of glycomacropeptide and essential amino acids, as well as milk powder-lactose modified, from F1 as these drugs are no longer listed on the PBS. The application of this determination is governed by the provisions of the National Health Act 1953, which is a Commonwealth Act, thereby extending its reach across the entire nation. The Minister (or delegate) is empowered to determine by legislative instrument whether a listed drug is on F1 or F2, and this power is exercised through subordinate instruments such as the Amending Determination. The determination takes effect from 1 January 2017 and operates as a legislative instrument under the Legislation Act 2003.
Key Provisions
The National Health (Listed Drugs on F1 or F2) Amendment Determination 2016 (No. 12) primarily focuses on the allocation of drugs to the F1 and F2 formularies under the Pharmaceutical Benefits Scheme (PBS) as provided by the National Health Act 1953. Section 85AB(1) of the Act empowers the Minister to determine through legislative instruments the placement of listed drugs into either F1 or F2. F1 is designated for single brand drugs, whereas F2 is intended for drugs with multiple brands or those in a therapeutic group with multiple brands (subsection 85AB(4) and (3)). A drug is assigned to F1 if it has no listed brands that are bioequivalent or biosimilar and was not on F2 the day before the determination comes into effect (subsection 85AB(4)). Conversely, a drug may be placed on F2 if it does not meet the criteria for F1 (subsection 85AB(3)).
The obligations under this Act require affected pharmaceutical companies to comply with the determinations regarding the allocation of drugs to either F1 or F2. This includes ensuring that drugs are listed and appropriately categorized according to the criteria outlined in the Act. Pharmaceutical companies must also participate in the consultation process, providing necessary information and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC, consisting of experts from various health-related fields, plays a critical role in advising on the suitability and allocation of drugs to the appropriate formularies. The Act mandates that any determination must be made following these consultations and in line with the criteria set out in the Act.
In terms of consequences, non-compliance with the Act’s provisions can result in legal repercussions. The Act provides mechanisms for the revocation or variation of the Principal Determination, as outlined in subsection 33(3) of the Acts Interpretation Act 1901. Failure to adhere to the criteria for drug placement in F1 or F2, or to comply with the consultation requirements, may lead to administrative or legal actions. While specific penalties are not detailed in the explanatory statement, breaches of the Act could result in civil or criminal penalties depending on the severity and nature of the non-compliance. The penalties for such breaches are determined according to the specific provisions of the National Health Act 1953 and other relevant legislation.