EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 1)
PB 10 of 2018
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 to F1 two new drugs – glycomacropeptide formula with long chain polyunsaturated fatty acids and docosahexaenoic acid and low in phenylalanine; and ocrelizumab. It also removes three drugs from F1 – coal tar-prepared; cyproheptadine; and ticarcillin with clavulanic acid as these drugs are no longer PBS listed. In addition, it also moves a currently listed drug – abacavir with lamivudine from the single brand Combination 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 February 2018.
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 2018 (No. 1) was enacted to amend the National Health (Listed drugs on F1 or F2) Determination 2010. This amendment responds to changes in the Pharmaceutical Benefits Scheme (PBS) listing of drugs and their allocation to the F1 and F2 formularies. The Act was enacted by the Parliament of Australia to provide for the allocation of listed drugs to specific formularies within the PBS, ensuring efficient and effective healthcare provision. The policy objective is to maintain a streamlined and well-managed PBS by ensuring drugs are appropriately allocated to the most suitable formularies based on their therapeutic characteristics and market presence. The National Health Act 1953 governs this process, allowing for amendments through legislative instruments such as the Amending Determination.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 1) 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) under the National Health Act 1953. The Amending Determination applies to pharmaceutical companies with medicines listed on the PBS, as it modifies the allocation of certain drugs to the F1 and F2 formularies, or the single brand Combination Drug List. F1 is designated for single brand drugs, while F2 is for drugs with multiple brands or those in a therapeutic group with other multi-brand drugs. The amendment process involves detailed consultations with the intended responsible parties and recommendations from the Pharmaceutical Benefits Advisory Committee (PBAC), which includes members from various health-related professions and consumer representatives. The geographic reach of this Act is national, as it pertains to the PBS, a Commonwealth-wide scheme. The Amending Determination does not introduce any exclusions or exemptions beyond those already specified in the Principal Determination. The Act's application may be extended or restricted through subordinate instruments, although no such actions are specified in the Amending Determination itself.
Key Provisions
The National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 1) 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) (sections 1-2). The F1 formulary is for drugs with a single brand, while the F2 formulary is for drugs with multiple brands or those in a therapeutic group with other multi-brand drugs. The F2 formulary is subject to specific provisions in the Act, including first new brand statutory price reductions, price disclosure, and a guarantee of supply (section 3). The determination process is governed by section 85AB of the National Health Act 1953, which allows the Minister or a delegate to allocate drugs to F1 or F2 based on specific criteria (section 4). For F1, there must be no bioequivalent or biosimilar brands of the drug or any drug in the same therapeutic group. Additionally, the drug must not have been on F2 the day before the determination comes into effect. A drug is placed on F2 if it does not meet the criteria for F1 (section 5).
The Amending Determination introduces two new drugs to the F1 formulary: glycomacropeptide formula with long chain polyunsaturated fatty acids and docosahexaenoic acid and low in phenylalanine, and ocrelizumab. It also removes three drugs from F1—coal tar-prepared, cyproheptadine, and ticarcillin with clavulanic acid—because these drugs are no longer listed on the PBS (section 6). Furthermore, it moves abacavir with lamivudine from the single brand Combination Drug List (CDL) to F2 (section 7). The determination relies on subsection 33(3) of the Acts Interpretation Act 1901 for the power to revoke or vary the Principal Determination, as no express power is cited in this instrument (section 8). The Pharmaceutical Benefits Advisory Committee (PBAC) plays a key role in recommending drug allocations to the formularies, with its two-thirds membership comprising consumers, health economists, community pharmacists, general practitioners, clinical pharmacologists, and medical specialists. Further consultation on this amendment was deemed unnecessary due to prior consultations with pharmaceutical companies (section 9). The Amending Determination comes into effect on 1 February 2018 and is considered a legislative instrument under the Legislation Act 2003 (section 10).
Entities and parties governed by this determination, primarily pharmaceutical companies, must adhere to the criteria and allocations specified in the determination. This includes ensuring their drugs are appropriately listed and allocated to the correct formulary on the PBS. Failure to comply with the criteria set out in section 85AB of the Act could result in the drug not being eligible for the intended formulary, potentially affecting its availability and pricing on the PBS (section 4). Pharmaceutical companies must also ensure that their drugs meet the criteria for F1 or F2 as outlined in the determination, or face the possibility of their drugs being placed on the administrative combination drug list if they do not meet the necessary criteria (section 5).
The Act does not explicitly detail offences, penalties, or civil/criminal consequences for non-compliance with the determination. However, non-compliance with the criteria for drug allocation to the PBS formularies could indirectly result in administrative actions or legal challenges. For instance, if a drug is incorrectly allocated to a formulary, it could lead to disputes over pricing, supply, and availability, potentially resulting in legal actions to correct the allocation. Additionally, failing to meet the criteria for F1 or F2 could impact the commercial viability of the drug, leading to financial losses for the pharmaceutical company (section 6).