National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (No. 2)

Administered by Department of Health, Disability and Ageing

Legislation au F2022L01757 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 126 OF 2022

 

NATIONAL HEALTH ACT 1953

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (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 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 (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 = Mycophenolic Acid, form = Powder for oral suspension containing mycophenolate mofetil 1 g per 5 mL, 165 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 company regarding the removal of the specified form of mycophenolic acid. No additional consultations with experts were 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 January 2023.

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. 2) (PB 126 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 mycophenolic acid 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 (e.g. 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. 2) was enacted to amend the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84AH) Determination 2017, addressing discrepancies in the listing of exempt pharmaceutical items under the National Health Act 1953. This legislative instrument was introduced to ensure that pharmaceutical items listed as exempt under the Pharmaceutical Benefits Scheme (PBS) meet the specified criteria in section 84AH of the Act. The determination was made by the Minister for Health under the authority vested in them by the Act, with the primary objective of maintaining the integrity of the PBS by ensuring that only those pharmaceutical items that genuinely require exemption from certain statutory price reductions and price disclosure requirements are listed as exempt. This amendment ensures that the PBS continues to provide reliable, timely, and affordable access to a wide range of medicines for all Australians, while also encouraging the availability of specific pharmaceutical formulations suitable for particular patient subgroups.

Scope and Application

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (No. 2) amends the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017 to modify the list of pharmaceutical items deemed exempt under the Pharmaceutical Benefits Scheme (PBS) as outlined in the National Health Act 1953. This amendment applies to pharmaceutical items meeting specific criteria, including having a single listed brand, no bioequivalent or biosimilar brands, and being suitable for particular patient subgroups due to their form or manner of administration. The amendment removes mycophenolic acid in the form of Powder for oral suspension containing mycophenolate mofetil 1 g per 5 mL, 165 mL, for oral administration from the exempt list because it no longer satisfies the specified criteria. The changes in this legislative instrument apply to the Commonwealth of Australia and affect the administration and pricing of pharmaceutical items under the PBS, impacting the pharmaceutical industry and consumers who rely on these medicines. The instrument does not contain specific exclusions but operates within the framework set by the National Health Act 1953. The instrument commences on 1 January 2023 and is subject to variation or revocation under the Acts Interpretation Act 1901, unless otherwise specified.

Key Provisions

The main operative sections of the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination 2022 (No. 2) concern the amendment of the Pharmaceutical Benefits Scheme (PBS) to adjust the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements. This adjustment is made under the authority granted by section 84AH of the National Health Act 1953 (the Act), which outlines specific criteria that must be satisfied for a pharmaceutical item to be designated as an exempt item. These criteria include the uniqueness of the listed brand of the pharmaceutical item, the absence of bioequivalent or biosimilar listed brands, the presence of other pharmaceutical items with the same listed drug, and the suitability of the pharmaceutical item for a particular patient population, based on advice from the Pharmaceutical Benefits Advisory Committee. The Act imposes several obligations on parties and entities it governs. Primarily, it mandates that the Minister for Health, in consultation with the Pharmaceutical Benefits Advisory Committee, must determine whether a pharmaceutical item meets the criteria for being an exempt item. Additionally, the Minister must ensure that these determinations are made in accordance with the criteria outlined in section 84AH of the Act. Pharmaceutical companies and relevant stakeholders are also required to provide necessary information and cooperate in consultations that may impact the listing status of pharmaceutical items. The Act ensures that these determinations are made transparently and based on expert advice, thereby maintaining the integrity and purpose of the PBS. Failure to comply with the provisions of this Act, or the determinations made under it, may result in legal consequences. Specifically, there are no explicit offences or penalties stated within the determination itself. However, breaches of the Act could potentially lead to civil or administrative penalties as outlined in other sections of the National Health Act 1953. For example, misleading or deceptive conduct in relation to pharmaceutical benefits could attract penalties under section 104A of the Act. Furthermore, the determination of exempt items is crucial for maintaining the PBS's objective of providing affordable access to necessary medications, and any improper designation could lead to administrative actions or judicial review. The legislative instrument is designed to ensure that the PBS continues to provide reliable, timely, and affordable access to a wide range of medicines, while also allowing for the exemption of certain pharmaceutical items that are essential for specific patient populations. By removing the specified form of mycophenolic acid from the exempt item list, the instrument ensures that the criteria for exemption are strictly adhered to, maintaining the scheme's integrity and effectiveness. The instrument's compatibility with human rights, as affirmed in the explanatory statement, underscores its aim to support the highest attainable standard of health for all Australians, while ensuring that the PBS remains a sustainable and equitable system.

Legal classification tags

Area of Law
Health Law
Instrument
Statutory Instrument
Concepts
Definitions & Interpretation
Reporting & Disclosure Obligations
Regulatory Standards

Interactions

Authorises

All Versions

Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.