National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2026

Administered by Department of Health, Disability and Ageing

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EXPLANATORY STATEMENT

 

INSTRUMENT NUMBER PB 42 OF 2026

 

NATIONAL HEALTH ACT 1953

National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2026

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 = Diclofenac, form = Suppository containing diclofenac sodium 100 mg, manner of administration = Rectal) is no longer determined to be an exempt item because it is delisting from the PBS as requested by the responsible person. 

 

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 diclofenac. Advice from the Pharmaceutical Benefits Advisory Committee (PBAC) was requested regarding the delisting of the specified form of diclofenac. 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. The PBAC considered that the deletion of diclofenac suppository containing diclofenac sodium 100 mg form would not result in an unmet clinical need.  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 April 2026.

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) 2026 (PB 42 of 2026)

 

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 diclofenac from the exempt list because it is delisting from the Pharmaceutical Benefits Scheme (PBS) as requested by the responsible person.

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

PBS Listing, Pricing and 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) 2026 was enacted under section 84AH of the National Health Act 1953. This legislative instrument aims to amend the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Determination 2017, specifically addressing the pharmaceutical items that are exempt from certain statutory price reductions and disclosure requirements under the Pharmaceutical Benefits Scheme (PBS). The objective is to ensure that particular formulations of drugs, which are suitable for specific demographic subgroups, such as children or geriatric patients, remain available and accessible. The instrument was made by the Minister for Health under the authority granted by the Act, with the aim of maintaining equitable access to essential medicines while encouraging the availability of suitable pharmaceutical formulations. The enactment body is the Parliament of Australia, which authorised the Minister for Health to make this determination to amend the existing legislation. The policy objective behind this amendment is to balance the need for affordable access to essential medicines with the necessity to maintain specific pharmaceutical formulations that cater to the needs of particular patient populations, ensuring that no clinical need is left unmet. The instrument removes a specified form of diclofenac from the exempt list due to its delisting from the PBS, following consultation with relevant stakeholders, including the Pharmaceutical Benefits Advisory Committee.

Scope and Application

This legislative instrument, the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2026, is made under section 84AH of the National Health Act 1953. It amends the National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84 AH) Determination 2017, adjusting the list of pharmaceutical items that are exempt from certain statutory price reductions and price disclosure requirements under the Pharmaceutical Benefits Scheme (PBS). This amendment applies to pharmaceutical items listed under the PBS, specifically targeting those that meet the criteria outlined in section 84AH of the Act. These criteria include the existence of only one listed brand of the pharmaceutical item, the absence of bioequivalent or biosimilar brands, and the suitability of the item for a particular subgroup of patients due to its form or manner of administration. The instrument affects pharmaceutical companies and patients who rely on these specific formulations for therapy. Geographically, its application extends across the Commonwealth of Australia, ensuring uniform regulation and access to these medications nationwide. The amendment excludes the specified form of the drug diclofenac from the exempt list due to its delisting from the PBS as requested by the responsible entity. The determination is effective from 1 April 2026, with any further variations or revocations relying on the provisions of the Acts Interpretation Act 1901 unless expressly stated otherwise. This legislative instrument is compatible with the human rights and freedoms recognised in international instruments, particularly supporting the right to the highest attainable standard of health.

Key Provisions

The National Health (Pharmaceutical Benefits Scheme-Exempt items - Section 84AH) Amendment Determination (No. 1) 2026 (PB 42 of 2026) amends the Pharmaceutical Benefits Scheme (PBS) by modifying the list of exempt items under section 84AH of the National Health Act 1953 (the Act). The primary change is the removal of diclofenac suppositories containing diclofenac sodium 100 mg from the exempt list due to its delisting from the PBS as per the request of the responsible person. The purpose of this amendment is to align the PBS with the current market needs and ensure that only those pharmaceutical items that meet specific criteria for suitability and necessity remain on the exempt list. The Act imposes specific obligations on the Minister regarding the determination of exempt items. Under section 84AH, the Minister must ensure that a pharmaceutical item qualifies as an exempt item if it meets the criteria outlined in the Act. These criteria include, among others, the uniqueness of the listed brand of the relevant pharmaceutical item, the absence of bioequivalent or biosimilar brands, and the suitability of the item for a particular subgroup of the patient population based on form and manner of administration. The Minister is also required to consider advice from the Pharmaceutical Benefits Advisory Committee (PBAC) when making these determinations. The determination of exempt items is crucial as it affects the pricing and availability of certain pharmaceutical products. Exempt items are excluded from certain statutory price reductions and price disclosure requirements, which can significantly impact the affordability and accessibility of these medicines. Non-compliance with the provisions of the Act can lead to legal consequences, including civil and criminal penalties. For instance, if a pharmaceutical company fails to comply with the requirements for the PBS, it may face fines or other legal repercussions as stipulated under the relevant sections of the Act. In terms of offences and penalties, breaches of the provisions in the Act can result in significant consequences. For example, under section 33(3) of the Acts Interpretation Act 1901, there is an express power to revoke or vary the principal determination if necessary. Furthermore, any company or individual found to be in violation of the PBS regulations may face civil penalties, which can include substantial fines. Additionally, more severe breaches may result in criminal charges, leading to imprisonment or further financial penalties, depending on the nature and severity of the offence. Overall, the legislative instrument seeks to ensure that the PBS remains an effective mechanism for providing affordable and accessible medicines to Australians, while also ensuring that the criteria for exempt items are strictly adhered to and evidence-based. This amendment reflects a balanced approach to managing the PBS, ensuring that it continues to meet the health needs of the population while adapting to changes in the pharmaceutical market.

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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.