National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2018 (No. 3) (PB 72 of 2018)

Administered by Department of Health, Disability and Ageing

Legislation au F2018L01074 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 72 OF 2018

 

NATIONAL HEALTH ACT 1953

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2018 (No. 3)

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:

  1. the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population; and
  2. 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
  3. 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 = Clozapine, form Oral liquid 50 mg per mL, 100 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 temporary listing of another pharmaceutical item and brand that would be suitable for use by the same patient population.

In addition, this instrument also changes the form description for two drugs – levodopa with carbidopa and mercaptopurine.  The form description is changing for levodopa with carbidopa from tablet 200 mg‑50 mg (anhydrous) (modified release) to tablet (modified release) 200 mg-50 mg (as monohydrate).  The form description is changing for mercaptopurine from oral suspension 20 mg per mL, 100 mL to oral suspension containing mercaptopurine monohydrate 20 mg per mL, 100 mL. These changes are due to the International Harmonisation of Ingredient Names reform.

 

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 for both the removal of exempt status on clozapine and the administrative changes due to the International Harmonisation of Ingredient Names (IHIN) reform.  Consultation had already taken place regarding determining exempt status with the affected pharmaceutical company, in addition, to the administrative nature of the changes due to the IHIN reform.  Both IHIN changes in this instrument are amendments to the description of the two forms in column two consistent with the naming conventions adopted by the IHIN reform.

 

General

The instrument commences on 1 August 2018.

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 2018 (No. 3) is an amendment to the National Health Act 1953, enacted to address the need for updating the list of pharmaceutical items exempt from certain statutory price reductions and price disclosure requirements under the Pharmaceutical Benefits Scheme (PBS). This legislation is made under the authority of the Minister for Health, and the policy objective is to ensure that the PBS remains responsive to the evolving therapeutic needs of specific patient populations, particularly those for whom certain drug formulations are unsuitable. The determinations made under this Act include changes to the status of specific pharmaceutical items, reflecting both therapeutic considerations and the need to align with international standards of drug naming and formulation descriptions. The changes are implemented to maintain the efficacy and accessibility of the PBS while ensuring that the scheme adapts to scientific and pharmaceutical advancements. The National Health Act 1953, through this amendment, aims to refine the criteria for exempt pharmaceutical items, ensuring that the PBS continues to provide reliable and affordable access to medicines for all Australians. This includes the removal of exempt status from certain drugs where new therapeutic alternatives have emerged, as well as updates to drug descriptions to reflect international standards. This legislative instrument, which commences on 1 August 2018, underscores the importance of ongoing consultation with relevant stakeholders, including pharmaceutical companies and the Pharmaceutical Benefits Advisory Committee, to ensure that the PBS remains effective and relevant in meeting the health needs of the Australian population.

Scope and Application

This instrument amends the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017, which applies to pharmaceutical items listed under the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. The Pharmaceutical Benefits Scheme is a Commonwealth initiative that provides access to affordable medicines for all Australians. The instrument applies to pharmaceutical companies and their listed drugs, specifically those that meet the criteria for being designated as exempt items. The instrument provides for the exclusion of certain pharmaceutical items from statutory price reductions and price disclosure requirements if they meet the criteria outlined in section 84AH of the Act. The changes to the instrument include the removal of exempt status for one pharmaceutical item and changes to the form descriptions of two other pharmaceutical items due to the International Harmonisation of Ingredient Names reform. The instrument revokes and varies the previous instrument, PB 81 of 2017, and relies on subsection 33(3) of the Acts Interpretation Act 1901 unless there is an express power to revoke or vary the previous instrument cited in this instrument and explanatory statement. The instrument is effective from 1 August 2018 and is a legislative instrument for the purposes of the Legislation Act 2003.

Key Provisions

The main operative sections of this instrument, made under section 84AH of the National Health Act 1953, are those that amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination 2017 (PB 81 of 2017). Section 2 of the instrument removes the exemption status of a particular pharmaceutical item (Clozapine, oral liquid 50 mg per mL, 100 mL) as it no longer meets the criteria in section 84AH(d)(iii) of the Act. Sections 3 and 4 revise the form descriptions of two other pharmaceutical items, levodopa with carbidopa and mercaptopurine, due to the International Harmonisation of Ingredient Names reform. The instrument also includes provisions for variation and revocation of the previous determination under subsection 33(3) of the Acts Interpretation Act 1901, unless otherwise specified. This Act imposes several obligations on the parties involved. Pharmaceutical companies must ensure their products comply with the criteria for exempt items as outlined in section 84AH of the Act. The Minister, with advice from the Pharmaceutical Benefits Advisory Committee (PBAC), is responsible for determining whether a pharmaceutical item meets the criteria for exemption. Affected pharmaceutical companies must engage in detailed consultations with the Minister and receive recommendations from the PBAC before any pharmaceutical item is determined to be exempt. The changes made by this instrument follow these consultations, as further consultation was deemed unnecessary due to the administrative nature of the changes. Under the Act, breaches of the provisions related to exempt items could lead to civil and criminal consequences. While the Act does not specify penalties for breaches of the criteria for exempt items, general provisions in the National Health Act 1953 and related legislation could apply. For instance, misleading or deceptive conduct in relation to pharmaceutical benefits could be subject to penalties under the Competition and Consumer Act 2010. Additionally, failure to comply with the Act could result in administrative actions such as fines or legal proceedings to enforce compliance. In summary, the instrument amends the determination of exempt pharmaceutical items under the National Health Act 1953, ensuring that only those items meeting the specific criteria continue to be exempt from statutory price reductions and price disclosure requirements. Pharmaceutical companies must ensure their products comply with these criteria, and the Minister has the authority to determine exemption status based on advice from the PBAC. While specific penalties for breaches are not outlined in the Act, general provisions in related legislation could apply, and non-compliance could lead to civil or criminal consequences.

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