EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 7)
PB 68 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 – idelalisib and pegvisomant to F1.
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 September 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 2017 (No. 7) was enacted to amend the National Health (Listed drugs on F1 or F2) Determination 2010. This amendment was introduced to address the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS) as stipulated by the National Health Act 1953. The F1 formulary is intended for single brand drugs, while F2 is designated for drugs that have multiple brands or are in a therapeutic group with other drugs with multiple brands. This legislation was enacted by the Parliament of Australia to ensure that listed drugs are appropriately assigned to the relevant formularies, subject to certain criteria such as the absence of bioequivalent or biosimilar listed brands. The policy objective of this amendment is to refine the allocation of drugs within the PBS, ensuring that the appropriate formulary is selected based on the drug’s characteristics and therapeutic classification.
Scope and Application
The National Health Act 1953 governs the administration of health services and related matters in Australia, and the National Health (Listed drugs on F1 or F2) Amendment Determination 2017 (No. 7) amends the National Health (Listed drugs on F1 or F2) Determination 2010. This instrument specifies the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). The Act applies to the Minister for Health, who is authorised to determine by legislative instrument the placement of listed drugs on either F1 or F2, subject to specific criteria. The F1 formulary is for single brand drugs, while F2 is for drugs with multiple brands or those in a therapeutic group with other multi-brand drugs, subject to statutory price reductions, price disclosure, and guaranteed supply provisions. The amendment determination adds two drugs, idelalisib and pegvisomant, to F1. The determination's scope encompasses pharmaceutical companies with medicines listed on the PBS, with prior consultation having taken place with these companies and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC), which comprises experts from various health-related professions and interests. The amendment commences on 1 September 2017 and is subject to the provisions of the Acts Interpretation Act 1901 for revocation or variation.
Key Provisions
The National Health (Listed Drugs on F1 or F2) Amendment Determination 2017 (No. 7) (F2017L01110) amends the National Health (Listed Drugs on F1 or F2) Determination 2010 (PB 93 of 2010) to allocate two new drugs to the F1 formulary of the Pharmaceutical Benefits Scheme (PBS). This Act, under section 84AC, allows for the assignment of listed drugs to the F1 and F2 formularies, with F1 intended for single brand drugs and F2 for drugs with multiple brands or those in a therapeutic group with other multiple brand drugs. F2 drugs are subject to specific provisions in the Act concerning first new brand statutory price reductions, price disclosure, and guarantee of supply. To be placed on F1, a drug must meet the criteria set out in subsection 85AB(4) of the National Health Act 1953, which includes having no listed brands that are bioequivalent or biosimilar and not having been on F2 the day before the determination comes into effect. Conversely, a drug can only be placed on F2 if it does not meet the criteria for F1 (subsection 85AB(3)).
The Amendment Determination requires pharmaceutical companies to comply with the allocation of drugs to the appropriate formularies as determined by the Minister or delegate under subsection 85AB(1) of the Act. This process involves detailed consultations with the intended responsible person and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC), which comprises representatives from various health-related interests and professions. Once a drug is determined to be placed on F1 or F2, pharmaceutical companies must adhere to the pricing, supply, and other requirements applicable to those formularies.
Any breach of the provisions of the National Health Act 1953 or the Amending Determination could result in significant legal consequences. Offences under the Act may lead to civil or criminal penalties, including fines and imprisonment. The maximum penalties for contraventions of the Act can vary depending on the specific offence, but they are designed to ensure compliance with the regulatory requirements for the PBS. Civil penalties could include substantial fines, while criminal penalties might involve imprisonment for individuals or fines for corporations, depending on the severity and nature of the breach. It is crucial for pharmaceutical companies and other stakeholders to fully understand and comply with the requirements to avoid these consequences.