EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 120 OF 2020
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (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 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 = Paracetamol, form = Suppositories 500 mg, 24 manner of administration = rectal) is no longer determined to be an exempt item because another smaller quantity of the same pharmaceutical item is listing on 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
The instrument affects one pharmaceutical company with a pharmaceutical item that will no longer meet the criteria to remain as an exempt item from 1 December 2020. Advice from the Pharmaceutical Benefits Advisory Committee (PBAC) was requested regarding the listing of the new specified form of paracetamol which is sponsored by the same company. 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. No additional consultations with experts was undertaken regarding this determination because consultation with the PBAC drew on the knowledge of persons with relevant expertise.
General
The instrument commences on 1 December 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 84 AH) Amendment Determination 2020 (No. 3) was enacted to amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017. This amendment was introduced to address the need for adjustments to the pharmaceutical items deemed exempt under the Pharmaceutical Benefits Scheme (PBS) as per the National Health Act 1953. The determination was made by the Minister of Health under section 84AH of the Act, which empowers the Minister to designate specific pharmaceutical items as exempt if they meet certain criteria, such as being the sole listed brand of a drug, having no bioequivalent or biosimilar brands, and being suitable for a specific patient subgroup due to its form and manner of administration. The objective is to ensure that certain formulations of drugs, particularly those suitable for specific demographic subgroups, remain accessible while avoiding statutory price reductions and disclosure requirements that apply to other pharmaceutical items. This amendment affects one pharmaceutical company by removing the exempt status of a paracetamol suppository item due to the listing of a new smaller quantity form on the PBS, effective from 1 December 2020.
Scope and Application
This legislation, the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (No. 3), amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 to alter the pharmaceutical items that are classified as exempt items under the National Health Act 1953. The Act applies to pharmaceutical items listed under the Pharmaceutical Benefits Scheme (PBS), which is administered by the Commonwealth to provide Australians with affordable access to a range of medicines. The Minister for Health determines which pharmaceutical items are exempt, based on specific criteria such as the uniqueness of the brand, the bioequivalence of other brands, and the suitability of the pharmaceutical item for certain patient populations, as advised by the Pharmaceutical Benefits Advisory Committee (PBAC). The changes made by this amendment mean that certain pharmaceutical items will no longer be exempt from statutory price reductions and price disclosure requirements, effective from 1 December 2020. The determination revokes the exemption for one specific pharmaceutical item, paracetamol suppositories 500 mg, 24, due to the listing of another smaller quantity of the same pharmaceutical item on the PBS. This legislative instrument is subject to the Acts Interpretation Act 1901 for its revocation or variation, and it is a legislative instrument under the Legislation Act 2003.
Key Provisions
This legislative instrument, the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2020 (No. 3), amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination 2017 (PB 81 of 2017) by altering the pharmaceutical items that are exempt from certain provisions of the National Health Act 1953 (the Act) (sections 2 and 3). Specifically, it addresses the criteria for determining pharmaceutical items as exempt, which include the existence of only one listed brand of the relevant pharmaceutical item, the absence of bioequivalent or biosimilar listed brands, and the suitability of the listed drug for particular patient populations due to the form and manner of administration (section 84AH). An exempt pharmaceutical item is excluded from statutory price reductions and price disclosure requirements under Divisions 3A and 3B of Part VII of the Act (section 84AH(5)).
Under the Act, the Minister is responsible for determining the pharmaceutical items that are exempt under section 84AH, and the criteria for such determinations are specified in section 84AH. The Minister must ensure that the pharmaceutical items meet the criteria mentioned above, including having regard to advice from the Pharmaceutical Benefits Advisory Committee (PBAC) regarding the suitability of the drug for particular patient populations (section 84AH). The Act also outlines the process for listing drugs and determining their forms and manner of administration (subsections 85(2) to 85(5)). The Pharmaceutical Benefits Scheme (PBS) is governed by Part VII of the Act, which aims to provide reliable, timely, and affordable access to a wide range of medicines for all Australians (section 7).
The legislation imposes obligations on the Minister and the pharmaceutical industry to ensure that the criteria for determining exempt pharmaceutical items are met, and that the suitability of the drug for particular patient populations is considered. The Minister must consult with the PBAC and consider their advice when determining whether a pharmaceutical item is exempt (section 84AH). Pharmaceutical companies must provide information about their pharmaceutical items to the Minister to enable the determination of whether they meet the criteria for exemption (subsection 84AH(4)).
There are no specific offences, penalties, or civil/criminal consequences mentioned in the legislation for breach of the provisions related to exempt pharmaceutical items. However, failure to comply with the requirements of the Act or the determinations made under it may result in legal action being taken against the relevant parties, such as the Minister or pharmaceutical companies. The maximum penalties for breaches of the Act depend on the specific offence committed and may include fines and/or imprisonment. For example, section 126 of the Act imposes a maximum penalty of $22,200 for contravening certain provisions related to the supply of pharmaceutical benefits.