EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 51 OF 2020
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (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 2017 (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 = Risperidone, form = Oral solution 1 mg per mL, 100 mL, manner of administration = oral) is no longer determined to be an exempt item because it no longer meets the criteria under subsection 84AH. This is due to the new listing of another pharmaceutical item and brand that is bioequivalent or biosimilar to the listed brand of the relevant item from 1 June 2020.
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 the removal of exempt status of risperidone. No additional consultations with experts was undertaken regarding this determination because consultation with the affected companies drew on the knowledge of persons with relevant expertise. Further consultation was not undertaken, as this amendment is due to risperidone no longer meeting the criteria to be determined an exempt item under section 84AH of the Act.
General
The instrument commences on 1 June 2020.
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 2020 (No. 1) is an amendment to the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017, made under section 84AH of the National Health Act 1953. This legislative instrument addresses the issue of pharmaceutical items that no longer meet the criteria for being exempt from statutory price reductions and price disclosure requirements under the Pharmaceutical Benefits Scheme (PBS). The amendment removes the exempt status of one pharmaceutical item, a Risperidone oral solution, due to the introduction of a new bioequivalent or biosimilar pharmaceutical item from 1 June 2020. The purpose of this amendment is to ensure that the PBS remains effective in providing suitable therapeutic options for all Australians, while maintaining the balance of availability and affordability of pharmaceutical items. The instrument was enacted by the Minister for Health and was subject to consultation with the relevant pharmaceutical company, though no additional consultations were undertaken as the change was due to the pharmaceutical item no longer meeting the criteria for exemption.
Scope and Application
The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (No. 1) applies to pharmaceutical items listed under the National Health Act 1953, specifically targeting those determined to be exempt items under section 84AH. This determination impacts the Pharmaceutical Benefits Scheme (PBS), which is administered by the Commonwealth to ensure all Australians have reliable and affordable access to a broad range of medicines. The Act applies to listed drugs, their forms, brands, and the manner of their administration, as determined by the Minister. This amendment primarily affects pharmaceutical companies and healthcare providers by altering the criteria for pharmaceutical items that qualify for exemption from statutory price reductions and price disclosure requirements. The amendment, effective from 1 June 2020, removes the exempt status of Risperidone oral solution 1 mg per mL, 100 mL due to the introduction of a new listed brand that is bioequivalent or biosimilar. The geographic and jurisdictional reach of this Act is national, as it operates under the purview of the Commonwealth. The Act does not specify exclusions or exemptions beyond those defined in the criteria of section 84AH, and its application may be extended or restricted through subordinate instruments as necessary.
Key Provisions
The key provisions of the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (No. 1) (the Amendment Determination) are primarily found in section 84AH of the National Health Act 1953 (the Act), which provides the framework for determining which pharmaceutical items are exempt from certain statutory price reductions and price disclosure requirements. Section 84AH outlines the criteria that a pharmaceutical item must satisfy to be considered an exempt item. This includes that there is only one listed brand of the pharmaceutical item, there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar to the one listed brand, and that the drug in the pharmaceutical item is suitable for a particular patient population because of its form and manner of administration. Additionally, the Amendment Determination specifies the changes to the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017 (PB 81 of 2017) by removing the exempt status of one pharmaceutical item, Risperidone in the form of an oral solution 1 mg per mL, 100 mL, due to it no longer meeting the criteria under section 84AH.
The Amendment Determination imposes obligations on the Minister to ensure that the criteria for determining exempt items are adhered to and that any pharmaceutical items that no longer meet these criteria are appropriately adjusted. The Minister must also consult with relevant pharmaceutical companies, as seen in the consultation with the company regarding the removal of the exempt status of risperidone. This consultation is crucial to ensure that the amendments are based on the latest information and expert knowledge. Further, the Minister must ensure that the changes made by the Amendment Determination align with the overarching purpose of the Act, which is to provide reliable, timely, and affordable access to medicines for all Australians.
The Amendment Determination does not explicitly outline specific offences, penalties, or civil or criminal consequences for breaches of the Act or the Determination. However, the overarching National Health Act 1953 includes provisions for enforcement and penalties. For example, under section 118 of the Act, any person who contravenes a provision of the Act or any determination made under the Act may be subject to penalties, including fines. The maximum penalties can vary depending on the nature and severity of the offence, and are outlined in the Act itself. These penalties serve as a deterrent to ensure compliance with the legislative requirements and maintain the integrity of the Pharmaceutical Benefits Scheme.