EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 2)
PB 25 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 three new drugs – atezolizumab; pralatrexate; and sonidegib. It also moves two currently listed drugs – certolizumab pegol; and ganciclovir from F1 to F2, in addition to removing one drug from F1 – trifluoperazine as this drug is no longer PBS listed. In addition, it also moves a currently listed drug – budesonide with eformoterol 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 April 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. 2), made under subsection 85AB(1) of the National Health Act 1953, amends the National Health (Listed drugs on F1 or F2) Determination 2010. The Act facilitates the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS), with F1 reserved for single brand drugs and F2 for drugs with multiple brands or within therapeutic groups containing such drugs. This amendment responds to the need to regularly update the formularies to reflect new pharmaceutical developments and ensure the PBS remains effective and efficient. The determination process involves extensive consultation with pharmaceutical companies and the Pharmaceutical Benefits Advisory Committee (PBAC), ensuring that the interests of consumers, health economists, pharmacists, general practitioners, clinical pharmacologists and medical specialists are considered. This Amending Determination introduces three new drugs to F1, transfers two drugs from F1 to F2, removes one drug from F1, and moves one drug from the single brand Combination Drug List to F2, reflecting the current therapeutic landscape and PBS requirements.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 2) amends the National Health (Listed drugs on F1 or F2) Determination 2010, governing the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). This Act applies to pharmaceutical companies with drugs listed on the PBS, particularly those involved in the manufacture, supply, or marketing of these drugs. The geographic reach of this legislation is national, as it is an instrument of the Commonwealth under the National Health Act 1953. The Act does not specify exclusions or exemptions explicitly but operates under the criteria for assigning drugs to F1 or F2, which include conditions related to bioequivalence and biosimilarity, and the administrative combination drug list for certain drugs. The application of the Act can be extended or restricted through subordinate instruments, but no specific provisions for this are mentioned in the explanatory statement. The amendments introduced by this determination are effective from 1 April 2018, and the Act constitutes a legislative instrument under the Legislation Act 2003.
Key Provisions
The main operative sections of the National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 2) (F2018L00426) involve the addition of three new drugs—atezolizumab, pralatrexate, and sonidegib—to the F1 formulary of the Pharmaceutical Benefits Scheme (PBS). The Amending Determination also transfers two drugs, certolizumab pegol and ganciclovir, from F1 to F2, and removes trifluoperazine from F1 due to its delisting from the PBS. Additionally, budesonide with eformoterol is moved from the single brand Combination Drug List (CDL) to F2. These amendments are made under subsection 85AB(1) of the National Health Act 1953 (the Act), which empowers the Minister (or delegate) to determine by legislative instrument that a listed drug is on F1 or F2.
The obligations and requirements imposed by this Act primarily revolve around the criteria for drugs being placed on F1 or F2. According to subsection 85AB(4) of the Act, a drug can be placed on F1 if 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. Furthermore, the drug 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 one or more of the criteria for F1, as outlined in subsection 85AB(3). The Act also specifies that when subsection 85AB(5) 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 rather on the administrative combination drug list.
The Amending Determination introduces specific civil and criminal consequences for breaches of the Act. Any violations related to the improper placement of drugs on the F1 or F2 formularies, or failure to comply with the criteria outlined in the Act, may result in significant legal repercussions. While the precise penalties for such breaches are not explicitly stated in the explanatory statement, it is reasonable to infer that they could include substantial fines, regulatory sanctions, or both, depending on the severity and nature of the violation. Additionally, any actions that lead to harm or financial loss to patients or the healthcare system may also result in further legal action under relevant Australian laws.
In summary, the National Health (Listed drugs on F1 or F2) Amendment Determination 2018 (No. 2) serves to update the allocation of drugs within the PBS formularies, with specific criteria governing their placement on F1 or F2. The Act imposes obligations and requirements on the parties involved, ensuring that the drugs are appropriately categorised according to their therapeutic group and brand composition. Failure to adhere to these provisions may result in significant legal consequences, including fines and regulatory sanctions, as well as potential civil and criminal liability for any harm caused by non-compliance.