National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2025

Administered by Department of Health, Disability and Ageing

Legislation au F2025L00778 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 80 OF 2025

 

NATIONAL HEALTH ACT 1953

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2025

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:

  1.    that there is only one listed brand of the relevant pharmaceutical item; and
  2.    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
  3.    there is at least one other pharmaceutical item that has the same listed drug as the relevant pharmaceutical item; and
  4.    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 = Naproxen, form = Oral suspension 125 mg per 5mL, 474 mL, manner of administration = Oral) is no longer determined to be an exempt item as it does not meet criteria a and d (iii) above, that is, there is an alternative pharmaceutical item that has the same listed drug, form and manner of administration, and it is also suitable for the same patient subgroup.

 

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 exempt status on the specified form of naproxen. 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 July 2025.

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 (No. 1) 2025 (PB 80 of 2025)

 

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 naproxen from the exempt 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.

 

Rebecca Richardson

Assistant Secretary

Pricing and PBS Policy Branch

Technology Assessment and Access Division
Department of Health, Disability and Ageing

Overview

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2025, made under section 84AH of the National Health Act 1953, aims to modify the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 (PB 81 of 2017). This amendment responds to the need for updating the list of pharmaceutical items exempt from certain statutory price reductions and disclosure requirements, ensuring that only those items that meet specific criteria continue to be exempt. The determination is enacted by the Parliament of Australia and seeks to facilitate timely and affordable access to essential medications for all Australians, particularly for demographic subgroups like children and geriatric patients, by making certain formulations available through the Pharmaceutical Benefits Scheme (PBS). The determination addresses the problem of pharmaceutical items that do not meet the criteria set out in section 84AH of the Act, ensuring that only suitable therapeutic formulations are exempt from certain PBS regulations. This legislative instrument ensures that the PBS remains effective in providing necessary medications while maintaining the integrity and suitability of the formulations available to various patient groups. The policy objective is to support the highest attainable standard of health for all Australians by ensuring that only those pharmaceutical items that are uniquely suitable for certain patient subgroups are exempt from certain pricing and disclosure requirements.

Scope and Application

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2025 amends the National Health (Pharmaceutical Benefits Scheme-Exempt items – Section 84 AH) Determination 2017 to alter the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements under the Pharmaceutical Benefits Scheme (PBS) of the National Health Act 1953. This Act applies to pharmaceutical items that are listed drugs and the Minister determines the form, brands, and manner of administration of these drugs. The amendment removes one specific form of naproxen (oral suspension 125 mg per 5mL, 474 mL, administered orally) from the exempt list because it fails to meet the criteria under section 84AH of the Act, particularly regarding the availability of alternative suitable formulations for the same patient population. The changes made by this instrument apply nationally and are intended to ensure that the PBS continues to provide suitable and effective pharmaceutical options for all Australians while maintaining a fair and efficient pricing structure. The National Health Act 1953 governs the PBS, providing subsidised access to a range of medicines for all Australians. This Act applies to the Minister who determines pharmaceutical items, their forms, brands, and administration methods. The Act’s geographic reach is national, as it is a Commonwealth Act. The Amending Determination excludes certain pharmaceutical items from statutory price reductions and disclosure requirements if they meet specific criteria. This legislative instrument is compatible with human rights, ensuring that access to essential medicines remains available while maintaining the integrity of the pricing and benefits structure within the PBS. The changes made by this determination are specific and do not extend beyond the parameters outlined in the Act and the accompanying determinations.

Key Provisions

This legislative instrument, the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2025, amends the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017 (PB 81 of 2017) to adjust the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements under Divisions 3A and 3B of Part VII of the National Health Act 1953 (the Act). This amendment specifically removes one pharmaceutical item from the exempt list. The criteria for determining exempt items, as outlined in section 84AH of the Act, require that the pharmaceutical item must have only one listed brand, no bioequivalent or biosimilar listed brands, at least one other pharmaceutical item with the same listed drug, and the Minister must be satisfied that the item is suitable for a particular patient subgroup due to its form and manner of administration. The item in question, Naproxen in oral suspension form, was removed from the exempt list because it no longer met the criteria that there is at least one other pharmaceutical item with the same listed drug and suitable for the same patient subgroup. The obligations and requirements imposed by the Act on the parties and entities it governs include ensuring that pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) meet the criteria set forth in section 84AH for exemption status. The Minister must determine, based on advice from the Pharmaceutical Benefits Advisory Committee, whether a pharmaceutical item meets the necessary criteria for exemption. The Pharmaceutical Benefits Advisory Committee provides expert advice to the Minister on the suitability of pharmaceutical items for the PBS. The Act also requires that any changes to the list of exempt items be made by legislative instrument and that these changes are subject to consultation with relevant parties, such as the pharmaceutical companies affected by the amendments. Additionally, the Act mandates that the amendments must be compatible with human rights, as stipulated in the Human Rights (Parliamentary Scrutiny) Act 2011. Breach of the requirements set out in the Act can lead to various consequences. If a pharmaceutical item is incorrectly listed as an exempt item, it may receive undue benefits under the PBS, potentially leading to financial implications for the scheme. The Act does not specify particular offences or penalties for incorrect listing or removal of exempt items. However, any actions taken under the Act must be consistent with human rights obligations, and failure to comply with these obligations could result in legal challenges or other consequences. The instrument itself does not prescribe specific penalties but relies on the broader legal framework for enforcement and compliance. In summary, the Amending Determination 2025 makes specific changes to the list of exempt pharmaceutical items by removing one item from the exempt list due to it no longer meeting the criteria in section 84AH of the Act. The obligations under the Act ensure that the criteria for exemption are met and that any changes are made through proper legislative processes. While the Act does not detail specific penalties for non-compliance, the legislative framework ensures that any amendments are compatible with human rights and are made with appropriate consultation and advice.

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