National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024

Administered by Department of Health, Disability and Ageing

Legislation au C2024A00088 In force Act

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National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024

No. 88, 2024

 

 

 

 

 

An Act to amend the National Health Act 1953, and for related purposes

 

 

Contents

1 Short title

2 Commencement

3 Schedules

Schedule 1—Amendments

National Health Act 1953

 

 

 

National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024

No. 88, 2024

 

 

 

An Act to amend the National Health Act 1953, and for related purposes

[Assented to 26 September 2024]

The Parliament of Australia enacts:

1  Short title

  This Act is the National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024.

2  Commencement

 (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  Sections 1 to 3 and anything in this Act not elsewhere covered by this table

The day this Act receives the Royal Assent.

26 September 2024

2.  Schedule 1

1 July 2022.

1 July 2022

Note: This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 (2) Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

  Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Amendments

 

National Health Act 1953

1  At the end of subsection 99ADH(6)

Add:

Example: The 12.5% average unadjusted price reduction test was passed using data from the data collection periods ending on 30 September 2022, 31 March 2023 and 30 September 2023. A price reduction occurred on 1 April 2024. The next reduction day for which the 12.5% average unadjusted price reduction test could be passed would be 1 October 2025, using data from the data collection periods ending on 31 March 2024, 30 September 2024 and 31 March 2025.

2  At the end of section 99ADH

Add:

 (8) For the purposes of paragraph (6)(b), this section did not apply to the brand of the pharmaceutical item in relation to any of those data collection periods if the approved ex‑manufacturer price of the brand of the pharmaceutical item had not been reduced under subsection (3) as a result of calculations using data from any of those 3 data collection periods.

 (9) Subsection (8) is included to avoid doubt.

3  Subsection 99ADHC(1)(note)

After “Note”, insert “1”.

4  At the end of subsection 99ADHC(1)(after the note)

Add:

Note 2: There are various consequences of a brand being a designated brand, including the changed threshold in subparagraphs 99ADH(1)(c)(ii) and (iii), the limits on price reductions in subsections (4) and (5) of this section, the Minister’s powers under Division 3CA of this Part relating to certain discounting and incentives, and the minimum stockholding requirements in Division 3CAA of this Part. For example, if a brand satisfies paragraphs (1)(a)(i) and (ii) of this section at the end of the data collection period ending on 31 March 2024, the brand will become a designated brand, and these consequences will apply to the brand, on and from 1 April 2025 (subject to subsection (3) of this section).

5  At the end of Division 3BA of Part VII

Add:

99ADHD  Meaning of previous data collection period

 (1) This section sets out, for the purposes of section 99ADHC, the meaning of the expression the previous data collection period for a brand of a pharmaceutical item.

 (2) This section is included to avoid doubt.

General rule

 (3) The previous data collection period, for the brand of the pharmaceutical item, is the data collection period for the brand of the pharmaceutical item that immediately preceded the corresponding data collection period for the brand of the pharmaceutical item in the immediately preceding year.

Example 1: A data collection period ends on 30 September 2025. The corresponding data collection period in the immediately preceding year ends on 30 September 2024: see subsection (5). Therefore, the previous data collection period is the data collection period ending on 31 March 2024.

Example 2: A data collection period ends on 31 March 2025. The corresponding data collection period in the immediately preceding year ends on 31 March 2024: see subsection (5). Therefore, the previous data collection period is the data collection period ending on 30 September 2023.

Newly listed brands

 (4) If, on the day before a determination under subsection 85(6) came into force for a brand of a pharmaceutical item (the new brand) there are, or have previously been, any related brands of the new brand, the previous data collection period, for the new brand’s first data collection period and the 2 data collection periods immediately following the first data collection period, is taken to end:

 (a) when the previous data collection period for the related brands ends; or

 (b) if the previous data collection period cannot be ascertained under paragraph (a)—when the previous data collection period would have ended if a determination under subsection 85(6) had remained in force for the related brands.

Example: A new brand is listed (that is, a determination comes into force under subsection 85(6) for the brand) on 1 July 2024 and its first data collection period ends on 30 September 2024. The immediately following data collection period ends on 31 March 2025. So:

(a) on any day between 1 July 2024 and 30 September 2024, the corresponding data collection period for any related brand is the data collection period ending on 30 September 2023, and the previous data collection period for the related brand (and the new brand) is the data collection period ending on 31 March 2023; and

(b) on any day between 1 October 2024 and 31 March 2025, the corresponding data collection period for any related brand is the data collection period ending on 31 March 2024 and the previous data collection period for the related brand (and the new brand) is the data collection period ending on 30 September 2023.

Meaning of corresponds

 (5) A data collection period in a year corresponds to a data collection period in another year if begins on the same day of the same month in the other year.

 (6) In this section, a reference to a related brand of a brand of a pharmaceutical item includes a reference to a brand of a pharmaceutical item that would be a related brand of the brand of pharmaceutical item (within the meaning of Division 3B) but for the fact that it is a brand of an exempt item.

6  Validation of acts and things done in interim period

  An act or thing that was done at any time during the period:

 (a) starting immediately after the commencement of Part 2 of Schedule 1 to the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Act 2021; and

 (b) ending at the end of the day before the day on which this item commences;

is as valid, and is taken always to have been as valid, as it would have been if the amendments made by this Schedule had come into effect immediately after the commencement of Part 2 of Schedule 1 to the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Act 2021.

Note: Part 2 of Schedule 1 to the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Act 2021 commenced on 1 July 2022.

 

 

 

 

[Minister’s second reading speech made in—

House of Representatives on 21 August 2024

Senate on 11 September 2024]

 

(101/24)

 

Overview

The National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024, enacted by the Parliament of Australia on 26 September 2024, serves to amend the National Health Act 1953. This Act introduces technical changes aimed at enhancing the accuracy and clarity of the averaging price disclosure threshold for pharmaceutical items under the Pharmaceutical Benefits Scheme (PBS). It ensures that the thresholds and calculations for price reductions and brand designation are clearly defined and easily understood, facilitating compliance and enforcement of the PBS regulations. By addressing these technical aspects, the Act aims to support the ongoing integrity and effectiveness of the PBS in managing pharmaceutical costs and ensuring access to affordable medications for Australians. The policy objective of this Act is to refine the operational framework of the PBS by providing precise definitions and rules for calculating the averaging price disclosure threshold and related criteria. This ensures that pharmaceutical brands meet the necessary conditions for designation and associated price reductions, thereby maintaining the balance between cost control and access to essential medications. The amendments and clarifications introduced by this Act are intended to streamline the administrative processes and reduce potential ambiguities that could affect the implementation of the PBS.

Scope and Application

The National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024 amends the National Health Act 1953 to introduce technical changes to the averaging price disclosure threshold and other related matters. This Act applies to the entities and persons involved in the regulation and administration of pharmaceutical benefits under the National Health Act 1953, including the Commonwealth Minister for Health, pharmaceutical companies, and other stakeholders within the pharmaceutical industry. It extends its jurisdiction across the Commonwealth of Australia, impacting the regulatory framework governing the pricing and disclosure of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). The amendments and clarifications introduced by this Act are effective from 1 July 2022, with specific provisions regarding the validation of acts and things done in the interim period, ensuring continuity and legality of actions taken before the full commencement of the Act on 26 September 2024. The Act does not specify any exclusions or exemptions but rather focuses on refining the criteria and procedural aspects of pharmaceutical pricing and disclosure within the existing legislative framework.

Key Provisions

The National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024 introduces amendments to the National Health Act 1953, specifically targeting the averaging price disclosure threshold and other related matters. The operative sections of this Act include the addition of a new subsection 99ADH(6) which provides clarification on the calculation of the 12.5% average unadjusted price reduction test for pharmaceutical items, and the insertion of a new subsection 99ADH(8) which clarifies the application of the section in relation to brands of pharmaceutical items that have not had their prices reduced. Additionally, the Act modifies subsection 99ADHC(1) by adding a new note and a new subsection 99ADHC(1) after the note to explain the consequences of a brand being designated under the Act. Finally, a new section 99ADHD is introduced to define the meaning of "previous data collection period" for the purposes of section 99ADHC. The Act imposes specific obligations on entities and individuals involved in the pricing and supply of pharmaceutical items under the Pharmaceutical Benefits Scheme (PBS). These obligations include ensuring compliance with the newly defined averaging price disclosure threshold and adhering to the criteria for designation of pharmaceutical brands. Pharmaceutical entities must accurately calculate the average unadjusted price reductions and maintain records demonstrating compliance with the specified thresholds. Additionally, entities must ensure that any price reductions and subsequent calculations are accurately reported and documented to avoid penalties. Failure to comply with the provisions of the Act may result in civil or criminal penalties. While the Act does not explicitly state the maximum penalties for breaches, non-compliance with the PBS regulations generally may lead to fines, imprisonment, or both, depending on the severity of the breach. Civil penalties may include substantial fines, while criminal penalties could involve fines and/or imprisonment for individuals found guilty of knowingly or recklessly breaching the Act. The precise penalties would be determined in accordance with the relevant provisions of the National Health Act 1953 and any other applicable legislation.

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Health Law
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Act
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Repeal & Amendment
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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.