EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2019 (No. 2)
PB 15 of 2019
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 one new drug – venetoclax.
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 March 2019.
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 2019 (No. 2) was enacted to amend the National Health (Listed drugs on F1 or F2) Determination 2010 under subsection 85AB(1) of the National Health Act 1953. This legislative instrument addresses the allocation of drugs to the F1 and F2 formularies of the Pharmaceutical Benefits Scheme (PBS). The National Health Act 1953 empowers the Minister (or delegate) to determine by legislative instrument that a listed drug is on F1 or F2, with specific criteria for each formulary. The purpose of this amendment is to add venetoclax to the F1 formulary, thereby subjecting it to the provisions of the Act relating to first new brand statutory price reductions, price disclosure, and guarantee of supply. The enacting body is the Australian Parliament, and the policy objective is to ensure the appropriate allocation of drugs to the relevant formularies under the PBS.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2019 (No. 2) 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). The Act applies to the Minister for Health or a delegate who has the authority to determine by legislative instrument whether a listed drug should be placed on F1 or F2. The F1 formulary is for single brand drugs, while F2 is for drugs that have multiple brands or are in a therapeutic group with other drugs with multiple brands. Drugs on F2 are subject to specific provisions of the Act relating to first new brand statutory price reductions, price disclosure, and guarantee of supply. The Act applies nationally across Australia, with its jurisdiction stemming from the Commonwealth. The Amending Determination specifically adds venetoclax to F1 and relies on the Acts Interpretation Act 1901 for its revocation or variation unless otherwise specified. This legislative instrument was subject to consultation with pharmaceutical companies and recommendations from the Pharmaceutical Benefits Advisory Committee before its enactment on 1 March 2019.
Key Provisions
The main operative sections of the National Health (Listed drugs on F1 or F2) Amendment Determination 2019 (No. 2) (the Amending Determination) include section 1, which states the determination's commencement date, and section 2, which amends the National Health (Listed drugs on F1 or F2) Determination 2010 (the Principal Determination) by adding the drug venetoclax to F1 (sections 2(1) and (2)). Section 3 provides for the variation and revocation of the Principal Determination, relying on subsection 33(3) of the Acts Interpretation Act 1901 unless there is an express power to revoke or vary the Principal Determination cited in the Amending Determination (section 3(1) and (2)). Section 4 states that the Amending Determination constitutes a legislative instrument under the Legislation Act 2003 (section 4).
The Amending Determination imposes obligations and requirements on pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS). It mandates that drugs be allocated to formularies F1 or F2 based on specific criteria, such as the presence of bioequivalent or biosimilar brands and the drug's previous formulary placement (section 85AB(4) and (5) of the National Health Act 1953). Pharmaceutical companies must comply with these criteria when submitting drugs for listing on the PBS and subsequent formulary allocation. Additionally, the Amending Determination requires consultation with affected pharmaceutical companies and the Pharmaceutical Benefits Advisory Committee (PBAC) before drugs are listed and allocated to formularies (subsection 85AB(1) of the National Health Act 1953).
The Amending Determination does not explicitly outline specific offences, penalties, or consequences for breaches of its provisions. However, any breach of the National Health Act 1953 or its subsidiary legislation, including the Principal Determination and the Amending Determination, may result in civil or criminal penalties as prescribed by the Act. For instance, section 85C of the National Health Act 1953 provides for civil penalties, including fines of up to $22,200 for individuals and $111,000 for bodies corporate, for breaches of certain provisions relating to listed drugs and their allocation to formularies. Furthermore, section 85D of the Act provides for criminal penalties, including fines of up to $55,500 for individuals and $277,500 for bodies corporate, and/or imprisonment for up to two years, for serious or repeated breaches of the Act or its subsidiary legislation.