EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 63 OF 2020
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (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 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 = Diazepam, form = Injection 10 mg in 2mL, manner of administration = injection) is no longer determined to be an exempt item because it is delisting from the PBS as requested by the responsible person.
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 delisting of the specified form of diazepam. No additional consultations with experts was undertaken regarding this determination because consultation with the affected company drew on the knowledge of persons with relevant expertise. Advice from the Pharmaceutical Benefits Advisory Committee (PBAC) was requested regarding the delisting of the specified form of diazepam. Two-thirds of the PBAC membership is from the following interests or professions: consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and medical specialists. The PBAC considered that alternative medicines are available to meet clinical need.
General
The instrument commences on 1 July 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. 2) was enacted to amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017. The objective of this legislation, made under section 84AH of the National Health Act 1953, is to modify the pharmaceutical items deemed exempt from statutory price reductions and price disclosure requirements under Divisions 3A and 3B of Part VII of the Act. This amendment serves to enhance the Pharmaceutical Benefits Scheme (PBS) by allowing the Minister to determine specific pharmaceutical items that are exempt from these requirements if they meet certain criteria outlined in section 84AH. This process is intended to encourage the availability of certain pharmaceutical items with particular formulations of drugs that are used by a demographic subgroup for whom other formulations of the drug are not suitable. The enactment of this legislation by the Parliament of Australia aims to improve access to appropriate medication for specific patient populations.
Scope and Application
The National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Amendment Determination 2020 (No. 2) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination 2017, affecting the pharmaceutical items deemed exempt under the Pharmaceutical Benefits Scheme (PBS) of the National Health Act 1953. The determination applies to pharmaceutical items, specifically drugs and medicinal preparations that are listed under the Act. These items are declared and determined by the Minister, who also specifies their form and manner of administration. The purpose of this amendment is to modify the list of pharmaceutical items that are exempt from statutory price reductions and price disclosure requirements, which is intended to encourage the availability of certain formulations suitable for specific patient subgroups. The amendment specifies that one particular form of diazepam injection is no longer exempt due to its delisting from the PBS. The instrument applies nationally and affects entities and individuals involved in the manufacture, supply, and dispensing of pharmaceutical items listed under the PBS. The changes made by this instrument are effective from 1 July 2020, and the determination relies on the Acts Interpretation Act 1901 for any necessary revocation or variation of the previous determination.
Key Provisions
The main operative sections of this instrument (sections 2-4) are concerned with the amendment of the Pharmaceutical Benefits Scheme (PBS) through the determination of exempt items. Section 2 specifies that the instrument amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 (PB 81 of 2017), by removing the pharmaceutical item containing Diazepam in the form of an Injection 10 mg in 2mL from the list of exempt items. This removal is based on the delisting of this form of diazepam from the PBS as requested by the responsible person. Section 3 and 4 provide the legal basis for these amendments, relying on the National Health Act 1953 and the Acts Interpretation Act 1901 for the revocation and variation of the previous determination. The intent of these changes is to adjust the list of exempt items in response to the delisting of a specific pharmaceutical form, ensuring the PBS list remains current and relevant.
The Act imposes several obligations and requirements on the parties and entities it governs. Firstly, the Minister for Health is tasked with determining pharmaceutical items that are exempt under section 84AH of the Act, based on the criteria outlined in the same section. This involves considering advice from the Pharmaceutical Benefits Advisory Committee (PBAC) and ensuring that the criteria are met for any pharmaceutical item to be deemed exempt. The Act also requires consultation with relevant stakeholders, including pharmaceutical companies and experts, when making changes to the list of exempt items. The Pharmaceutical Benefits Scheme itself imposes obligations on manufacturers, suppliers, and providers to comply with the pricing and listing regulations outlined in the Act and its subsidiary instruments. Finally, the Act mandates that any changes to the PBS, including the determination of exempt items, be made through legislative instruments, ensuring transparency and accountability in the decision-making process.
Breaches of the provisions within the Act may result in both civil and criminal consequences. For instance, section 127 of the Act imposes penalties for non-compliance with the pricing and disclosure requirements for pharmaceutical items listed on the PBS. The maximum penalties for contravening these provisions can include substantial fines and, in serious cases, imprisonment. Additionally, the Act provides for the enforcement of compliance through the courts, allowing for legal action to be taken against entities or individuals who fail to comply with the requirements of the Act. The penalties are designed to deter non-compliance and ensure that the PBS operates effectively to provide affordable access to medicines for all Australians. The specific penalties for different offences are detailed in the Act and its subsidiary instruments, with maximum fines and imprisonment terms varying based on the nature and severity of the breach.