EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 68 OF 2021
NATIONAL HEALTH ACT 1953
National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2021 (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 (e.g. 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 = liquid containing hydromorphone hydrochloride 1 mg per 200 mL, manner of administration = oral) is no longer determined to be an exempt item because the responsible person has advised of a shortage of this item until December 2021. They have requested a temporary listing of an alternative item to address the shortage.
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 July 2021. Advice from the PBAC was requested regarding the listing of the new specified form of hydromorphone which is sponsored by the same company. Two-thirds of the PBAC membership are from the following interests or professions: consumers, health economists, practising community pharmacists, general practitioners, clinical pharmacologists and medical specialists. No additional consultations with experts were undertaken regarding this determination because consultation with the PBAC drew on the knowledge of persons with relevant expertise.
General
The instrument commences on 1 July 2021.
This instrument is a legislative instrument for the purposes of the Legislation Act 2003.
Overview
The National Health Act 1953 was enacted to provide a framework for ensuring that all Australians have reliable, timely, and affordable access to a wide range of medicines through the Pharmaceutical Benefits Scheme (PBS). The Act was introduced to address the need for a systematic approach to making medicines accessible and affordable, ensuring that healthcare remains within reach for the general public. The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2021 (No. 2) was made by the Minister for Health under section 84AH of the National Health Act 1953. This determination aims to modify the list of pharmaceutical items exempt from certain statutory price reductions and price disclosure requirements. The policy objective is to ensure the availability of certain pharmaceutical formulations that are particularly suited for specific patient subgroups, such as children or geriatric patients, for whom other formulations may not be appropriate. The instrument revokes the exemption status of one pharmaceutical item due to a reported shortage and the need for a temporary alternative listing. This change is effective from 1 July 2021.
Scope and Application
The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2021 (No. 2) amends the existing Pharmaceutical Benefits Scheme-Exempt items determination to modify the pharmaceutical items that are determined to be exempt items under the National Health Act 1953. This amendment applies to pharmaceutical items within the Pharmaceutical Benefits Scheme, which is the Commonwealth scheme providing affordable access to a wide range of medicines for all Australians. The Act applies to pharmaceutical items that are listed drugs as declared by the Minister under the Act, and the Minister may determine various aspects of these listed drugs, including their form, manner of administration, and brand. The determination process for exempt items involves specific criteria related to the suitability of the pharmaceutical item for a particular subgroup of patients, as advised by the Pharmaceutical Benefits Advisory Committee. This amendment excludes one pharmaceutical item from the list of exempt items due to a reported shortage, while other aspects of the determination remain unchanged. The instrument is effective from 1 July 2021 and relies on the Acts Interpretation Act 1901 for its variation and revocation unless otherwise specified.
Key Provisions
The primary operative sections of this legislation, the National Health (Pharmaceutical Benefits Scheme-Exempt Items - Section 84AH) Amendment Determination 2021 (No. 2), pertain to amendments made to the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953 (the Act). Specifically, this instrument amends the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017 (PB 81 of 2017) by adjusting the list of pharmaceutical items that are deemed exempt items (subsection 3). These changes are intended to reflect alterations in market availability, efficacy, and suitability of certain drugs for particular patient populations. Section 84AH of the Act provides the criteria that must be met for a pharmaceutical item to be considered an exempt item, focusing on the uniqueness of the drug formulation and its suitability for specific patient subgroups.
The obligations imposed by this Act on the parties involved include the necessity for pharmaceutical companies to inform the Minister of any shortages in their products that could impact patient access to essential medications. In the case of hydromorphone, the responsible company has advised of a shortage until December 2021, prompting a temporary listing of an alternative item to mitigate this issue. Additionally, the Pharmaceutical Benefits Advisory Committee (PBAC) plays a crucial role in advising the Minister on the suitability and bioequivalence of pharmaceutical items, ensuring that only those items that meet specific therapeutic needs and are not adequately served by alternative formulations are included in the exempt items list.
In terms of consequences for non-compliance, the Act does not explicitly detail offences, penalties, or specific civil or criminal consequences for breaches within the scope of this determination. However, the overarching framework of the National Health Act 1953 provides a basis for enforcement, including potential penalties for non-compliance with regulations governing the PBS. The Acts Interpretation Act 1901 allows for the revocation or variation of the 2017 determination unless explicitly stated otherwise, ensuring that the legislative instrument remains current and responsive to changes in market conditions and therapeutic needs. This approach underscores the Act's commitment to maintaining a reliable, timely, and affordable access to essential medications for all Australians.