National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (No. 1)

Administered by Department of Health, Disability and Ageing

Legislation au F2022L01018 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 77 OF 2022

 

NATIONAL HEALTH ACT 1953

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (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:

  1. the listed drug in the relevant pharmaceutical item represents suitable therapy for a particular patient population; and
  2. 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
  3. 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 certain 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 = Methadone, form = Oral liquid containing methadone hydrochloride 25 mg per 5mL, 200 mL, manner of administration = Oral) is no longer determined to be an exempt item as it does not meet criteria a and b above, that is, there is another listed brand of the pharmaceutical item.

 

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 the removal of the specified form of methadone. 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.

General

This instrument commences on 1 August 2022.

This instrument is a legislative instrument for the purposes of the Legislation Act 2003.


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (No. 1) (PB 77 of 2022)

 

This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

This National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017 (the Principal Determination) determines exempt pharmaceutical items. This instrument (the Amending Determination) amends the principal determination which provides for the allocation of drugs to the exempt list if the pharmaceutical item satisfies the criteria in section 84AH of the National Health Act 1953 (the Act).

This instrument amends the principal determination by removing the specified form of the drug methadone from the exempt item list as it does not meet the criteria in section 84AH of the Act.  

Human rights implications

This legislative instrument engages Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights by assisting with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

The PBS is a benefit scheme which assists with providing subsidised access to medicines for people. This is a positive and supportive step towards attaining the highest standard of health for all Australians. Determining exempt items under section 84AH of the Act encourages 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. The recommendatory role of the Pharmaceutical Benefits Advisory Committee ensures that decisions about subsidised access to medicines on the PBS are evidence-based.

Conclusion

This legislative instrument is compatible with human rights. Human rights continue to be protected by retaining on the PBS clinically important medicines and maintaining exemptions from pricing reductions only where appropriate under the legislation.

 

 

Nikolai Tsyganov

Acting Assistant Secretary

Pricing and PBS Policy Branch

Technology Assessment and Access Division
Department of Health and Aged Care

 

Overview

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (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 was introduced to address the need for updating the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements under the Pharmaceutical Benefits Scheme (PBS). The PBS is a scheme established to provide reliable, timely, and affordable access to a wide range of medicines for all Australians. By amending the principal determination, the instrument ensures that only pharmaceutical items meeting specific criteria are considered exempt, thereby maintaining the balance between cost-effectiveness and the availability of suitable medications for particular patient populations. The determination process involves the Minister making changes to the exempt items list based on criteria such as the uniqueness of the listed brand, the availability of bioequivalent or biosimilar pharmaceutical items, and the suitability of the pharmaceutical item for specific patient subgroups. The policy objective is to support the availability of certain pharmaceutical items with particular formulations that are essential for demographic subgroups for whom other formulations may not be suitable, thereby progressively realising the right to the highest attainable standard of physical and mental health as recognised by the International Covenant on Economic, Social and Cultural Rights. The amendments made by this instrument are compatible with human rights, ensuring continued protection of human rights by retaining access to clinically important medicines while maintaining exemptions from pricing reductions only where appropriate under the legislation.

Scope and Application

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (No. 1) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017, affecting the pharmaceutical items that are classified as exempt items under the National Health Act 1953. This Act applies to the Pharmaceutical Benefits Scheme (PBS), which ensures Australians have access to affordable medicines. The Minister for Health, under the authority of section 84AH of the Act, determines which pharmaceutical items qualify as exempt items if they meet specific criteria, such as being the sole listed brand of the relevant drug and having no bioequivalent or biosimilar alternatives that meet the criteria. The purpose of these exemptions is to encourage the availability of certain formulations of drugs that are particularly suitable for specific patient groups, such as children or geriatric patients, where other formulations may not be appropriate. The determination impacts the pricing and disclosure requirements for these specified pharmaceutical items. This legislative instrument is applicable nationally and operates under the jurisdiction of the Commonwealth of Australia. The Amending Determination removes the specified form of methadone from the list of exempt items as it no longer meets the criteria stipulated in section 84AH of the Act, specifically that there is only one listed brand of the relevant pharmaceutical item and there are no listed brands of other pharmaceutical items that are bioequivalent or biosimilar to the one listed brand. The instrument does not include any exclusions, exemptions, or thresholds apart from those explicitly detailed in the criteria. The application of the Act is extended or restricted through subordinate instruments, as allowed under the Acts Interpretation Act 1901, where specific revocation or variation powers are not cited. The instrument became effective on 1 August 2022 and is recognised as a legislative instrument under the Legislation Act 2003.

Key Provisions

The main operative sections of this legislative instrument, made under section 84AH of the National Health Act 1953, amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017. This amendment involves the removal of a specific pharmaceutical item from the list of exempt items under the Pharmaceutical Benefits Scheme (PBS). Specifically, the oral liquid form of Methadone, containing methadone hydrochloride 25 mg per 5mL, 200 mL, administered orally, is no longer considered an exempt item because it fails to meet the criteria stipulated in section 84AH of the Act, particularly criteria (a) and (b) which require that there be only one listed brand and that there are no bioequivalent or biosimilar brands of the relevant pharmaceutical item. This change aims to ensure that only pharmaceutical items that meet the specified criteria are granted exemption from certain statutory price reductions and price disclosure requirements under Divisions 3A and 3B of Part VII of the Act. The Act imposes several obligations and requirements on the parties it governs, primarily focusing on the Minister's duty to determine whether pharmaceutical items meet the criteria for exemption under section 84AH. This includes ensuring that the listed drug represents suitable therapy for a specific patient population and that the pharmaceutical item is suitable for use by a particular subgroup of that population due to the form and manner of administration. Additionally, the Minister must consider advice from the Pharmaceutical Benefits Advisory Committee (PBAC) when making such determinations. The Act also mandates that any changes to the list of exempt items must be made by legislative instrument and must be in line with the statutory criteria. Failure to comply with the requirements set out in this Act can result in various civil or criminal consequences. While the specific penalties for breach are not detailed within this particular legislative instrument, the general legal framework under the National Health Act 1953 and related regulations may include fines, enforcement actions, or other penalties as deemed appropriate by the court. The severity of the penalty would depend on the nature and extent of the breach, with potential maximum penalties varying according to the specific offence and jurisdiction. In summary, this legislative instrument modifies the list of exempt pharmaceutical items under the PBS by removing the oral liquid form of Methadone from the exempt list due to non-compliance with the criteria specified in section 84AH of the National Health Act 1953. The obligations under the Act focus on the Minister's role in determining the suitability of pharmaceutical items for exemption, considering advice from the PBAC and adhering to statutory criteria. Breaches of the Act may result in civil or criminal consequences, although specific penalties are not detailed in this instrument.

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Area of Law
Health Law
Pharmaceutical Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Regulatory Standards
Licensing & Registration
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Exempt items

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