EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 5)
PB 49 of 2017
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 two new drugs – pirfenidone and vorinostat to F1. In addition, it also moves one currently listed drug – cefuroxime 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. Further consultation on the Amending Determination was deemed unnecessary due to the consultation on allocation of the drugs to formularies with affected pharmaceutical companies that had already taken place.
The Amending Determination Instrument commences on 1 July 2017.
This Instrument constitutes a legislative instrument for the purpose of the
Legislation Act 2003.
Overview
The National Health Act 1953, enacted by the Parliament of Australia, addresses the regulation and administration of drugs listed under the Pharmaceutical Benefits Scheme (PBS). One of the gaps it sought to fill is the allocation of drugs to appropriate formularies to ensure efficient management and accessibility of medications within the PBS. In 2017, the National Health (Listed drugs on F1 or F2) Amendment Determination was introduced to amend the National Health (Listed drugs on F1 or F2) Determination 2010, further refining the criteria and process for assigning drugs to F1 or F2 formularies. The policy objective of the Amendment Determination is to provide a clear framework for the allocation of drugs to F1 or F2, ensuring that single brand drugs are placed in F1 and multi-brand or therapeutic group drugs are placed in F2, thereby facilitating statutory price reductions, price disclosure, and guaranteed supply as outlined in the Act. The determination process involves consultation with the Pharmaceutical Benefits Advisory Committee and pharmaceutical companies to ensure that the allocation of drugs is based on thorough consideration and expert advice.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 5) amends the National Health (Listed drugs on F1 or F2) Determination 2010, which governs the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). This legislation applies to pharmaceutical companies with drugs listed on the PBS, particularly those involved with the drugs pirfenidone, vorinostat, and cefuroxime. The F1 formulary is designated for drugs with a single brand, while the F2 formulary is for drugs with multiple brands or those in a therapeutic group with multiple brands. The Act outlines the criteria for assigning drugs to these formularies and provides mechanisms for determining the formulary placement of listed drugs, including the power of the Minister to make such determinations through legislative instruments. The amendment moves cefuroxime from F1 to F2, and adds pirfenidone and vorinostat to F1. The Act's provisions extend across Australia, as it is a Commonwealth Act. The Amending Determination, made under the authority of the National Health Act 1953, revokes and varies the Principal Determination unless there is an express power to the contrary.
Key Provisions
The National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 5) amends the National Health (Listed drugs on F1 or F2) Determination 2010 by altering the formulary allocation for specific drugs on the Pharmaceutical Benefits Scheme (PBS). Under this determination, two new drugs, pirfenidone and vorinostat, are assigned to the F1 formulary (sections 1 and 2). Additionally, the drug cefuroxime is moved from the F1 formulary to the F2 formulary (section 2). These changes aim to refine the categorisation of drugs based on their therapeutic characteristics and market dynamics, ensuring that the PBS formularies are appropriately populated with drugs that meet the criteria for their respective categories.
The Act imposes obligations on the Minister or their delegate to ensure that drugs are correctly allocated to the F1 or F2 formularies based on specific criteria. For a drug to be placed on the F1 formulary, it must not have any listed brands that are bioequivalent or biosimilar, and it must not have been on the F2 formulary the day before the determination comes into effect (subsection 85AB(4)). Conversely, a drug can only be placed on the F2 formulary if it fails to meet the criteria for F1 (subsection 85AB(3)). This process is overseen by detailed consultations with pharmaceutical companies and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC), ensuring that the decisions are well-informed and balanced.
Failure to comply with the provisions of the Act can result in various consequences. While the explanatory statement does not specify particular offences or penalties, it is clear that non-compliance with the Act’s requirements for drug allocation could lead to legal challenges, administrative penalties, or the need for corrective actions to ensure that the PBS remains compliant with legislative requirements. The Act empowers the Minister to take necessary actions to enforce the correct allocation of drugs to the appropriate formularies, ensuring that the PBS operates effectively and fairly.
The National Health Act 1953 and its amendments provide a structured framework for the allocation of drugs to the PBS formularies. This involves a rigorous process of evaluation, consultation, and determination by the Minister or their delegate. The legislative instrument ensures that drugs are appropriately categorised based on their therapeutic characteristics and market dynamics, which is crucial for maintaining the integrity and efficiency of the PBS. By adhering to the criteria and processes outlined in the Act, the PBS can continue to provide affordable and accessible pharmaceutical benefits to Australians.