EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 6)
PB 60 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 moving six currently listed drugs – bosentan, chorionic gonadotrophin, nortriptyline, pregabablin, tenofovir and valganciclovir from F1 to F2. In addition, it also moves another currently listed drug – tenofovir with emtricitabine from the single brand Combinaton Drug List (CDL) 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 August 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, governs the administration of nationally funded health services. The Act provides for the listing of drugs and the allocation of these drugs to formularies within the Pharmaceutical Benefits Scheme (PBS). The National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 6) amends the National Health (Listed drugs on F1 or F2) Determination 2010 to reallocate certain drugs from F1 to F2, thereby addressing the need for more effective management of pharmaceutical costs and access. This amendment was made under the authority of subsection 85AB(1) of the Act, empowering the Minister or their delegate to determine drug allocations by legislative instrument. The policy objective of this amendment is to ensure appropriate pharmaceutical pricing and supply mechanisms are in place, thereby optimising the availability and affordability of necessary medications to the Australian public.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 6) amends the National Health (Listed drugs on F1 or F2) Determination 2010, which provides for the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). This Act applies to pharmaceutical companies with medicines listed on the PBS and involves the classification of drugs into specific formularies based on their therapeutic group and brand status. The Amendment Determination moves six drugs from F1 to F2 and one drug from the Combination Drug List to F2, reflecting changes in their therapeutic status and market competition. This legislative instrument is made under the authority of the National Health Act 1953 and commences on 1 August 2017. The Act applies nationally across Australia, and while the primary focus is on the PBS, it impacts all stakeholders involved in the supply and consumption of these drugs. There are no stated exclusions or exemptions in this Determination, and the amendment is effective across all jurisdictions governed by the Commonwealth’s health legislation.
Key Provisions
The National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 6) amends the National Health (Listed drugs on F1 or F2) Determination 2010, altering the allocation of drugs within the Pharmaceutical Benefits Scheme (PBS). Specifically, it moves six drugs—bosentan, chorionic gonadotrophin, nortriptyline, pregabalin, tenofovir, and valganciclovir—from the F1 formulary to the F2 formulary. Additionally, it moves tenofovir with emtricitabine from the single brand Combination Drug List (CDL) to the F2 formulary. This change is intended to align with the PBS's structure, where F1 is for single-brand drugs and F2 for drugs with multiple brands or those in therapeutic groups with multiple brands.
The amendment imposes specific criteria on the Minister or delegate when determining the allocation of drugs to F1 or F2. For a drug to be placed on F1, it must not have any listed brands that are bioequivalent or biosimilar, and it must not have been on F2 the day before the determination comes into effect. Conversely, a drug may only be placed on F2 if it does not meet the criteria for F1. This ensures that the formulary allocation is based on the therapeutic group and brand equivalency of the drugs.
The Act also outlines the obligations of pharmaceutical companies and the consequences of non-compliance. Pharmaceutical companies must ensure that their drugs are correctly allocated to the appropriate formulary as per the determination. Failure to comply with the determinations could result in legal consequences, including potential penalties under the Act. The exact penalties are not detailed in the explanatory statement but could include fines or other sanctions as prescribed by the Act.
Offences under the National Health Act 1953 can lead to both civil and criminal consequences. For instance, non-compliance with the determinations may result in civil penalties, including fines, while more severe breaches could lead to criminal charges. The maximum penalties for such offences are not explicitly stated in the explanatory statement but are likely to be detailed elsewhere in the Act. These provisions ensure that the provisions of the PBS are enforced effectively, maintaining the integrity of the scheme.