EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 9)
PB 88 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 moving one currently PBS listed drug – imatinib from F1 to F2. In addition, it removes the drug megestrol from F1 as this drug is 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.
The Amending Determination Instrument commences on 1 October 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. 9) amends the National Health (Listed drugs on F1 or F2) Determination 2010, which concerns the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). Enacted by the Parliament of Australia under the authority of the National Health Act 1953, the purpose of this legislation is to adjust the formulary placement of specific drugs on the PBS to better align with their therapeutic group and brand characteristics, ensuring efficient management and equitable access to medications. The policy objective of the amendment is to maintain the integrity of the PBS by ensuring that drugs are appropriately categorised within the scheme, facilitating better price control and supply guarantees for consumers.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 9) amends the National Health (Listed drugs on F1 or F2) Determination 2010 to adjust the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). The National Health Act 1953 governs this process, with the Act providing that listed drugs may be assigned to formularies identified as F1 and F2, with F1 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. The Minister (or delegate) has the authority to determine by legislative instrument that a listed drug is on F1 or F2, and this instrument specifically moves imatinib from F1 to F2 and removes megestrol from F1 as it is no longer PBS listed. The Amending Determination applies to pharmaceutical companies with medicines listed on the PBS and affects their conduct in relation to these drugs. It is a legislative instrument for the purposes of the Legislation Act 2003 and the determination commences on 1 October 2016.
Key Provisions
The main operative sections of the National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 9) include the amendment of the National Health (Listed drugs on F1 or F2) Determination 2010 (subsection 85AB(1) of the National Health Act 1953). This amendment involves moving a currently PBS listed drug, imatinib, from F1 to F2 and removing the drug megestrol from F1 because it is no longer listed on the PBS (section 2). Section 84AC of the Act specifies 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.
The Act imposes obligations and requirements on parties and entities it governs, particularly pharmaceutical companies with medicines listed on the PBS. These entities must adhere to the criteria set forth in the Act and the Principal Determination for drugs to be allocated to F1 or F2 formularies. This includes satisfying the criteria outlined in subsection 85AB(4) for F1, 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. Additionally, the drug must not have been on F2 the day before the determination comes into effect.
The Act also provides for specific offences and penalties for breaches. Subsection 85AB(5) states that listed drugs with a single brand combination item on the PBS are not placed on F1 or F2 but on the administrative combination drug list. Any failure to comply with the requirements and provisions outlined in the Act and the Amending Determination may result in legal consequences. Although the explanatory statement does not specify maximum penalties, it is clear that non-compliance could lead to legal action, administrative penalties, or other civil/criminal consequences as determined by relevant authorities.
In summary, the National Health (Listed drugs on F1 or F2) Amendment Determination 2016 (No. 9) specifies the amendments to the National Health (Listed drugs on F1 or F2) Determination 2010, including the movement of imatinib from F1 to F2 and the removal of megestrol from F1. The Act imposes obligations on pharmaceutical companies and provides for potential penalties for non-compliance, although the specific maximum penalties are not detailed in the explanatory statement.