EXPLANATORY STATEMENT
National Health Act 1953
National Health (Listed drugs on F1 or F2) Amendment Determination 2020 (No. 2)
PB 19 of 2020
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 durvalumab and glycomacropeptide and essential amino acid formula with vitamins, minerals, and low in tyrosine and phenylalanine.
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 new medicines listing on the PBS. Durvalumab and glycomacropeptide and essential amino acid formula with vitamins, minerals, and low in tyrosine and phenylalanine both meet the criteria for F1 set out in section 85AB(4) of the Act. Before the drugs were listed and allocated to formularies, there were detailed consultations about the drugs with the responsible persons, and a recommendation was 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.
The Amending Determination Instrument commences on 1 March 2020.
This Instrument constitutes a legislative instrument for the purpose of the
Legislation Act 2003.
Overview
The National Health Act 1953 was enacted to provide for the funding and administration of health services in Australia, with a particular focus on the Pharmaceutical Benefits Scheme (PBS). The Act addresses the need to regulate the pricing, supply, and availability of pharmaceutical products under the PBS. The National Health (Listed drugs on F1 or F2) Amendment Determination 2020 (No. 2) was introduced by the Australian Government to amend the National Health (Listed drugs on F1 or F2) Determination 2010, and it was made under the authority of subsection 85AB(1) of the National Health Act 1953. The policy objective of this amendment is to ensure that new drugs are appropriately allocated to the F1 and F2 formularies of the PBS, thereby maintaining a well-regulated pharmaceutical market. This determination specifically adds two new drugs, durvalumab and glycomacropeptide and essential amino acid formula with vitamins, minerals, and low in tyrosine and phenylalanine, to the F1 formulary, ensuring their availability and affordability under the PBS.
Scope and Application
The National Health (Listed drugs on F1 or F2) Amendment Determination 2020 (No. 2) amends the National Health (Listed drugs on F1 or F2) Determination 2010 to include two new drugs, durvalumab and glycomacropeptide, along with an essential amino acid formula with vitamins, minerals, and low in tyrosine and phenylalanine, in the F1 formulary of the Pharmaceutical Benefits Scheme (PBS). This Act applies to listed drugs that are subject to the provisions of the National Health Act 1953, and the amendments pertain specifically to pharmaceutical companies with new medicines being listed on the PBS. The F1 formulary is designated for single brand drugs, and the F2 formulary is for drugs that have multiple brands or are in a therapeutic group with other drugs that have multiple brands. Drugs on F2 are subject to statutory price reductions, price disclosure, and guaranteed supply provisions. The determination is made by the Minister or a delegate under subsection 85AB(1) of the Act and is effective from 1 March 2020. The geographic reach of the Act is national, and it does not specify any exclusions or exemptions, but rather identifies criteria that drugs must meet to be placed on F1 or F2. The Act’s application can be extended or restricted through subordinate instruments as necessary.
Key Provisions
The primary operative sections of this Amendment Determination are sections 85AB(1), (3), (4) and (5) of the National Health Act 1953. These sections empower the Minister or delegate to determine by legislative instrument that a listed drug is allocated to formularies F1 or F2 of the Pharmaceutical Benefits Scheme (PBS). Section 85AB(4) sets out the criteria a drug must satisfy to be placed on F1, while section 85AB(3) stipulates the criteria a drug must not satisfy to be placed on F2. Section 85AB(5) excludes drugs with a single brand combination item on the PBS from being placed on F1 or F2, instead placing them on the administrative combination drug list. The Amendment Determination, by amending the Principal Determination, adds two new drugs to F1: durvalumab and glycomacropeptide and essential amino acid formula with vitamins, minerals, and low in tyrosine and phenylalanine.
The Act imposes certain obligations and requirements on the parties and entities it governs. Pharmaceutical companies must consult with the relevant authorities and provide necessary information to meet the criteria for drug allocation to F1 or F2. The Pharmaceutical Benefits Advisory Committee (PBAC) is also involved in the process, providing recommendations based on submissions from affected parties. The Minister or delegate must consider these recommendations and other relevant information before making a determination under section 85AB. Additionally, the determination must be made by legislative instrument, and any amendments must also be made by legislative instrument.
There are no explicit offences, penalties, or consequences for breach stated in the Act or the Explanatory Statement. However, failure to comply with the requirements for drug allocation to the PBS formularies could potentially lead to administrative or legal consequences. For instance, if a pharmaceutical company does not comply with the criteria for F1 or F2 placement, it may face challenges in having its drug listed on the PBS, which could have financial and market access implications. Moreover, non-compliance with the legislative instrument requirements could lead to the invalidity of the determination, potentially resulting in further administrative or legal consequences.