EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 3)
PB 26 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 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 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; amino acid formula with fat, carbohydrate without phenylalanine; citrulline; and nadroparin to F1. It also moves one already PBS listed drug, modafinil, from F1 to F2.
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.
The Amending Determination Instrument commences on 1 April 2016.
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. 3) amends the National Health (Listed Drugs on F1 or F2) Determination 2010, which allocates drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). The National Health Act 1953 was enacted to provide for the funding and administration of the PBS, among other things. The 2016 Amendment Determination was introduced to address the need for updating the allocation of certain drugs within the PBS formularies. This Instrument, made under subsection 85AB(1) of the National Health Act 1953, aims to improve access to certain medications by ensuring appropriate allocation in the F1 or F2 formularies. The policy objective is to ensure that drugs are appropriately placed within the formularies based on their therapeutic group and brand availability, thereby facilitating equitable access to necessary medications for the Australian public. The Amending Determination was made by the Minister for Health and commenced on 1 April 2016.
Scope and Application
The National Health Act 1953, as amended by the National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 3), governs the allocation of drugs to the F1 and F2 formularies within the Pharmaceutical Benefits Scheme (PBS). This legislation applies to all entities involved in the pharmaceutical industry, particularly pharmaceutical companies with drugs listed on the PBS. It also applies to the Minister for Health, who has the authority to make determinations under the Act regarding the classification of drugs. The Act has a national jurisdictional reach across Australia, affecting the availability, pricing, and supply of pharmaceutical drugs. The Act does not specify any exclusions or exemptions, but it does establish thresholds and criteria that drugs must meet to be allocated to either F1 or F2, with F1 being designated for single brand drugs and F2 for drugs with multiple brands or those in therapeutic groups with multiple brands. The application of the Act may be extended or restricted through subordinate instruments, which rely on the Acts Interpretation Act 1901 for the power to revoke or vary previous determinations.
Key Provisions
The main operative sections of the National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 3) amend the National Health (Listed drugs on F1 or F2) Determination 2010 by adding three new drugs to the F1 formulary and moving one drug, modafinil, from F1 to F2. The determination under section 85AB(1) of the National Health Act 1953 (the Act) requires the Minister to specify which listed drugs are allocated to formularies F1 or F2. This process is governed by the criteria set out in sections 85AB(4) and 85AB(3) of the Act, which provide that drugs can only be allocated to F1 if there are no bioequivalent or biosimilar listed brands in the same or similar therapeutic group, and if the drug was not on F2 the day before the determination comes into effect. Drugs that do not meet the criteria for F1 may be placed on F2. The Amending Determination adds amino acid formula with fat, carbohydrate without phenylalanine; citrulline; and nadroparin to F1, and moves modafinil from F1 to F2.
The obligations imposed by this Act on parties and entities include the requirement for pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS) to comply with the allocation of drugs to formularies F1 or F2. Pharmaceutical companies must ensure that their drugs meet the criteria specified in the Act for placement in the appropriate formulary. This involves engaging in detailed consultations with the intended responsible person and receiving recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC). The PBAC, which consists of two-thirds members from relevant interests or professions such as consumers, health economists, and medical specialists, provides recommendations following submissions from affected pharmaceutical companies. Compliance with these processes is essential for the proper allocation of drugs to the F1 and F2 formularies, ensuring that they are appropriately managed within the PBS.
The Act outlines specific offences, penalties, and consequences for breaches. While the Explanatory Statement does not provide explicit details on penalties for non-compliance with the formulary allocations, the general legislative framework under the National Health Act 1953 may impose penalties for non-compliance with provisions relating to the PBS. Typically, penalties for breaches of health-related legislation can include fines, imprisonment, or both, depending on the severity of the offence and the specific provisions breached. It is important for pharmaceutical companies and other affected entities to adhere strictly to the requirements set out in the Act and its associated determinations to avoid potential legal repercussions. Non-compliance could lead to significant civil or criminal penalties, impacting both the company’s operations and its reputation within the healthcare sector.