EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 90 OF 2017
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2017 (No. 1)
Purpose
The purpose of this legislative instrument, made under section 84AH of the National Health Act 1953 (the Act), is to amend the legislative instrument titled National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination (as amended) (PB 81 of 2017) to make changes to the pharmaceutical items that are determined to be exempt items.
Background
Part VII of the Act is the legislative basis of the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely and affordable access to a wide range of medicines for all Australians.
Drugs and medicinal preparations to which Part VII applies are declared as such by the Minister, by legislative instrument under subsection 85(2) of the Act. These are listed drugs (as defined in subsection 84(1)). The Minister may also determine by legislative instrument the form or forms of a listed drug by reference to strength, type of unit, size of unit or otherwise (subsection 85(3)) and the manner of administration of the form of the listed drug so determined (subsection 85(5)). If a drug has a declaration under subsection 85(2) in force in respect of it and determinations under subsections 85(3) and 85(5) in force in respect of it, then that declared drug in that determined form with that determined manner of administration is a pharmaceutical item. The Minister may also determine, by legislative instrument, brands of pharmaceutical items (subsection 85(6)).
Section 84AH empowers the Minister to determine, by legislative instrument, that a pharmaceutical item is an ‘exempt item’ if the pharmaceutical item satisfies the criteria in section 84AH. The criteria in section 84AH are as follows:
(a) that there is only one listed brand of the relevant pharmaceutical item; and
(b) there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar to the one listed brand of the relevant pharmaceutical item; and
(c) there is at least one other pharmaceutical item that has the same listed drug as the relevant pharmaceutical item; and
(d) the Minister is satisfied (having regard to advice, if any, from the Pharmaceutical Benefits Advisory Committee (PBAC)) that:
- the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population; and
- the relevant pharmaceutical item is suitable for use by a particular subgroup of that population because of either or both of the form and manner of administration; and
- no other pharmaceutical item that has that drug is suitable for use by that subgroup because of either or both of the form and manner of administration of the drug in that other item.
The effect of a pharmaceutical item being determined to be an exempt item is that the listed brand of that pharmaceutical item is excluded from statutory price reductions and price disclosure requirements under Division 3A and 3B of Part VII of the Act. The intention is to encourage the availability of certain pharmaceutical items with particular formulations of drugs that are used by a demographic subgroup (eg. children or geriatric patients) for whom other formulations of the drug are not suitable.
Changes to PB 81 of 2017 made by this instrument
This instrument makes the following changes to PB 81 of 2017:
One pharmaceutical item (listed drug = Cefuroxime, form = Powder for oral suspension 125 mg (as axetil) per 5 mL, 70 mL, manner of administration = oral) is no longer determined to be an exempt item because it no longer meets subsection 84AH(d)(iii). This is due to the listing of another pharmaceutical item that would be suitable for use by the same patient population.
Variation and revocation
Unless there is an express power to revoke or vary PB 81 of 2017 cited in this Instrument and explanatory statement, subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to revoke or vary PB 81 of 2017.
Consultation
The Amending Determination affects pharmaceutical companies with medicines listed on the PBS. Before drugs are determined to be exempt, there are detailed consultations about the drug with the 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. For all pharmaceutical items that are determined to be exempt, affected pharmaceutical companies have previously sought exempt item status and the Pharmaceutical Benefits Advisory Committee (PBAC) has previously provided advice (where appropriate) to the Minister or the Minister’s Delegate under subsection 101(4AB) of the Act. Further consultation on the Amending Determination was deemed unnecessary due to the consultation on determining exempt status with the affected pharmaceutical company had already taken place.
General
The instrument commences on 1 November 2017.
This instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Overview
The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2017 (No. 1) was enacted to address the need for updating the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements under the National Health Act 1953. This instrument, made under section 84AH of the Act, amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 (PB 81 of 2017) by removing a pharmaceutical item from the list of exempt items due to the introduction of another suitable pharmaceutical item for the same patient population. The objective of this amendment is to ensure that only those pharmaceutical items which meet the specific criteria set out in section 84AH of the Act are exempt from the statutory price reductions and price disclosure requirements. The instrument was enacted by the Parliament of Australia and commenced on 1 November 2017.
Scope and Application
This determination amends the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953, specifically addressing the criteria for determining pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements. The amendment is made under section 84AH of the Act, and the determination applies to pharmaceutical items that are deemed exempt based on the criteria set out in section 84AH. These criteria include the presence of a single listed brand, the absence of bioequivalent or biosimilar listed brands, and the suitability of the pharmaceutical item for a particular patient population based on its form and manner of administration. The amendment affects pharmaceutical companies with medicines listed on the PBS, specifically altering the status of one pharmaceutical item to no longer be exempt due to the listing of another suitable pharmaceutical item for the same patient population. The changes take effect from 1 November 2017, and the instrument relies on the Acts Interpretation Act 1901 for any revocation or variation unless explicitly stated otherwise.
Key Provisions
The main operative sections of the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2017 (No. 1) (the Amendment Determination) are found in section 3. This section details the changes made to the pharmaceutical items determined to be exempt items under the National Health Act 1953 (the Act). Specifically, it states that one pharmaceutical item (listed drug = Cefuroxime, form = Powder for oral suspension 125 mg (as axetil) per 5 mL, 70 mL, manner of administration = oral) is no longer determined to be an exempt item due to the listing of another pharmaceutical item that would be suitable for use by the same patient population (subsection 3(1)(a)).
The Amendment Determination imposes several obligations and requirements on the parties and entities it governs. Firstly, pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS) must ensure that their products comply with the criteria for exempt items as outlined in section 84AH of the Act. This includes meeting the criteria that there is only one listed brand of the relevant pharmaceutical item, there are no bioequivalent or biosimilar listed brands of other pharmaceutical items, there is at least one other pharmaceutical item with the same listed drug, and the Minister is satisfied that the drug represents suitable therapy for a particular patient population and is suitable for use by a particular subgroup of that population because of the form and manner of administration. If a pharmaceutical item no longer meets these criteria, it will be removed from the list of exempt items.
Furthermore, the Minister is required to consult with the Pharmaceutical Benefits Advisory Committee (PBAC) and affected pharmaceutical companies before determining whether a pharmaceutical item should be designated as an exempt item. This consultation process ensures that all relevant parties have an opportunity to provide input and advice on the suitability of the pharmaceutical item for exemption. The Amendment Determination also requires that any changes to the list of exempt items be made by legislative instrument, as per the provisions of the Act.
The Amendment Determination outlines several potential consequences for non-compliance with its provisions. Firstly, if a pharmaceutical company fails to ensure that its products comply with the criteria for exempt items, it may result in the exclusion of the pharmaceutical item from the PBS, which could have significant financial and operational implications for the company. Additionally, failure to consult with the PBAC and affected pharmaceutical companies before determining whether a pharmaceutical item should be designated as an exempt item could result in legal challenges or other consequences. However, the Amendment Determination does not specify any particular offences, penalties, or civil or criminal consequences for breach. Instead, it relies on the general legal framework provided by the Act and other relevant legislation to address any instances of non-compliance.