EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 97 OF 2018
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2018 (No. 4)
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 = Ethosuximide, form oral solution 250 mg per 5 mL, 200 mL, manner of administration = oral) is determined to be an exempt item.
One pharmaceutical item (listed drug = Hydromorphone, form Oral liquid containing hydromorphone hydrochloride 1 mg per mL, 473 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 additional listing of another pharmaceutical item of the same brand 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 for both the addition of exempt status to ethosuximide and the removal of exempt status on hydromorphone. Consultation had already taken place regarding determining exempt status with the affected pharmaceutical companies
General
The instrument commences on 1 November 2018.
This instrument is a legislative instrument for the purposes of the Legislation Act 2003.