EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 36 OF 2021
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2021 (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:
Two pharmaceutical items (listed drug = Cefuroxime, form = Powder for oral suspension 125 mg (as axetil) per 5 mL, 100 mL, manner of administration = Oral) and (listed drug = Paracetamol, form = Suppository 500 mg, manner of administration = Rectal) are determined to be exempt items.
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 companies regarding reinstating exempt status on cefuroxime, powder for oral suspension 125 mg (as axetil) per 5 mL, 100 mL, oral and paracetamol, suppository 500 mg, rectal with previous advice provided by the PBAC under subsection 101(4AB) of the Act. 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 April 2021.
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 2021 (No. 1) was enacted in 2021 to amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017, addressing a gap in the availability of specific pharmaceutical formulations suitable for particular patient demographics. The Act was enacted by the Parliament of Australia, aiming to enhance access to certain medications by excluding them from statutory price reductions and price disclosure requirements under the National Health Act 1953, thus encouraging their continued availability. The Pharmaceutical Benefits Advisory Committee provided advice, drawing on expertise from various relevant fields, ensuring the determination aligns with public health needs. This legislative instrument commenced on 1 April 2021 and is subject to the provisions of the Legislation Act 2003.
Scope and Application
The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2021 (No. 1) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 to determine which pharmaceutical items are exempt under section 84AH of the National Health Act 1953. This Act applies to the Commonwealth and is administered by the Minister for Health, who has the authority to make determinations regarding pharmaceutical items listed under the Pharmaceutical Benefits Scheme (PBS). The amendment specifies that certain pharmaceutical items are exempt from statutory price reductions and price disclosure requirements to ensure their availability for particular patient populations, such as children or geriatric patients, for whom other formulations of the drugs may not be suitable. This legislative instrument applies to the pharmaceutical items identified in the amendment and is effective from 1 April 2021. The instrument does not specify exclusions or exemptions beyond the criteria outlined in section 84AH of the Act. The instrument may be varied or revoked in accordance with the provisions of the Acts Interpretation Act 1901, unless otherwise stated in the amendment.
Key Provisions
The National Health (Pharmaceutical Benefits Scheme-Exempt Items - Section 84AH) Amendment Determination 2021 (No. 1) (the Determination) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination 2017 (PB 81 of 2017) to determine two pharmaceutical items as exempt items under section 84AH of the National Health Act 1953 (the Act). Specifically, the Determination identifies cefuroxime powder for oral suspension 125 mg (as axetil) per 5 mL, 100 mL, for oral administration, and paracetamol suppository 500 mg, for rectal administration, as exempt items. The effect of this determination is that the listed brands of these pharmaceutical items will be excluded from statutory price reductions and price disclosure requirements under Divisions 3A and 3B of Part VII of the Act (sections 84AH and 84AH(2)).
The Determination imposes obligations on the Minister to determine which pharmaceutical items are exempt under section 84AH of the Act, in accordance with the criteria set out in section 84AH of the Act. The Minister is required to consider advice from the Pharmaceutical Benefits Advisory Committee (PBAC) before making a determination. The PBAC is a committee of experts with a broad range of expertise, including consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and medical specialists. The Determination also imposes obligations on the pharmaceutical companies that manufacture and supply the identified pharmaceutical items to ensure that they comply with the requirements of the Act and the Determination.
The Determination does not create any new offences or penalties. However, breaches of the Act or the Determination may result in civil or criminal consequences, including fines and imprisonment. The maximum penalties for breaches of the Act or the Determination depend on the nature and severity of the breach. For example, section 101A of the Act provides for a maximum penalty of 200 penalty units ($42,000) for contravening certain provisions of the Act relating to the supply of pharmaceutical benefits. Section 101AA of the Act provides for a maximum penalty of 500 penalty units ($105,000) for contravening certain provisions of the Act relating to the supply of pharmaceutical benefits that are likely to cause death or serious injury.
In summary, the Determination amends the PB 81 of 2017 to determine two pharmaceutical items as exempt items under section 84AH of the Act. The Determination imposes obligations on the Minister and pharmaceutical companies to comply with the requirements of the Act and the Determination. Breaches of the Act or the Determination may result in civil or criminal consequences, including fines and imprisonment.