EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 44 OF 2019
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2019 (No. 2)
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 Divisions 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 = Hydromorphone, form = Oral liquid containing hydromorphone hydrochloride 1 mg per mL, 200 mL, manner of administration = oral) is determined to be an exempt item.
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
Consultation on the Amending Determination has taken place with the relevant pharmaceutical company regarding reinstating exempt status on hydromorphone with advice provided by the PBAC under subsection 101(4AB) of the Act.
General
The instrument commences on 1 June 2019.
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 2019 (No. 2), enacted under section 84AH of the National Health Act 1953, aims to amend the previously established determination regarding pharmaceutical items that are exempt from certain statutory requirements under the Pharmaceutical Benefits Scheme (PBS). The PBS is a scheme administered by the Commonwealth to provide affordable access to a range of medicines for all Australians. This determination responds to the need for certain pharmaceutical items to be exempt from specific statutory price reductions and price disclosure requirements, particularly for formulations that are suitable for particular demographic subgroups such as children or geriatric patients. The policy objective is to encourage the availability of suitable pharmaceutical items for these specific subgroups. The enacting body in this case is the Minister for Health, who has the authority to make such determinations under the legislative framework provided by the Act.
Scope and Application
The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2019 (No. 2) amends the Pharmaceutical Benefits Scheme (PBS) by modifying the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements. The determination applies to the Commonwealth of Australia and affects the pharmaceutical industry, specifically the brands and formulations of drugs listed under the PBS. The criteria for an item to be considered an exempt item under section 84AH of the National Health Act 1953 include the item having a unique listed brand, being bioequivalent or biosimilar to any other listed item, and being suitable for a specific patient population due to its form and manner of administration. This amendment process involves the Minister consulting with the Pharmaceutical Benefits Advisory Committee and the relevant pharmaceutical companies. The amendment made by this instrument specifically designates an oral liquid form of hydromorphone as an exempt item. The changes are effective from 1 June 2019, and any variation or revocation of the previous determination is conducted under the authority of the Acts Interpretation Act 1901 unless otherwise specified.
Key Provisions
The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2019 (No. 2) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 (PB 81 of 2017). This amendment, under section 84AH of the National Health Act 1953, determines that a particular pharmaceutical item is exempt from certain statutory price reductions and disclosure requirements. Specifically, the amendment identifies one pharmaceutical item, Hydromorphone in the form of an oral liquid containing hydromorphone hydrochloride 1 mg per mL, 200 mL, administered orally, as an exempt item (section 2). The determination of an exempt item hinges on several criteria, including the uniqueness of the listed brand, the absence of bioequivalent or biosimilar brands, the presence of at least one other pharmaceutical item containing the same listed drug, and the suitability of the drug for a particular patient population or subgroup based on the form and manner of administration (section 84AH).
The Act imposes certain obligations on the parties and entities it governs. The Minister, in making the determination of an exempt item, must consider advice from the Pharmaceutical Benefits Advisory Committee (PBAC) and satisfy specific criteria outlined in section 84AH of the Act. Pharmaceutical companies and other entities must ensure that their products comply with the criteria and requirements set out in the Act and the legislative instrument. The Minister is also responsible for consulting with relevant stakeholders, such as pharmaceutical companies, when making determinations that could affect the availability and pricing of pharmaceutical items (section 101(4AB)).
There are no explicit offences, penalties, or consequences for breach stated within the instrument itself. However, the general legislative framework under which this determination operates includes provisions for compliance and enforcement. Breaches of the National Health Act 1953 or associated regulations could lead to enforcement actions, including fines and other penalties as prescribed by the relevant legislation. For instance, under section 123 of the Act, a person who contravenes any provision of the Act or any regulations made under it may be liable for a penalty. The penalties for such breaches can be substantial, often commensurate with the severity and intent of the offence. It is important for all parties to adhere to the legislative requirements to avoid potential enforcement actions and penalties.