National Health (December 2018 First New Brand statutory price reduction) (Exercise of Ministerial discretion) Determination 2018

Overview

The National Health (December 2018 First New Brand Statutory Price Reduction) (Exercise of Ministerial Discretion) Determination 2018 was enacted under the National Health Act 1953 to provide the Minister for Health with the authority to exercise discretion over the statutory price reduction of certain pharmaceutical items listed in the Pharmaceutical Benefits Scheme (PBS). This determination was made to address the need for flexibility in the application of price reductions on specific pharmaceutical brands, ensuring that pricing policies can be tailored to meet particular market and therapeutic needs. The instrument was issued by Sean Lane, Acting Assistant Secretary of the Pricing and PBS Policy Branch, Technology Assessment and Access Division, Department of Health, as a delegate of the Minister for Health. The policy objective behind this determination is to allow for a nuanced approach to pricing, which can support the affordability and accessibility of essential medications while considering the broader economic and therapeutic contexts. This determination allows for certain brands of pharmaceutical items to either not have their approved ex-manufacturer price reduced or to have their price reduced by a lower percentage than would otherwise apply, effective from 1 December 2018. This targeted approach enables the Minister to balance the interests of various stakeholders, including pharmaceutical companies, patients, and the broader healthcare system, by ensuring that price reductions are implemented in a manner that supports sustainable access to necessary medications. The exercise of this discretion is aimed at achieving optimal outcomes in terms of public health and economic efficiency within the PBS framework.

Scope and Application

The National Health (December 2018 First New Brand statutory price reduction) (Exercise of Ministerial discretion) Determination 2018 is a statutory instrument made under the National Health Act 1953. It applies to the approved ex-manufacturer price of certain pharmaceutical items effective from 1 December 2018. The Minister for Health exercised discretion to specify that particular brands of pharmaceutical items should either not have their prices reduced at all or have their prices reduced by a lower percentage than would otherwise be applicable under the Act. Specifically, some brands are determined to have a zero percent reduction, while others, such as Tocilizumab in injection form, are to be reduced by 20 percent. This instrument applies to pharmaceutical items listed in the schedule, which includes details of the drug, form, and manner of administration. The instrument is applicable nationally, as it is a Commonwealth determination under the National Health Act 1953.

Key Provisions

The National Health (December 2018 First New Brand statutory price reduction) (Exercise of Ministerial discretion) Determination 2018, made under the authority of the National Health Act 1953, specifies the price reductions for certain pharmaceutical items effective from 1 December 2018 (section 5, 6). The Minister, through this determination, exercises discretion under subsections 99ACF(3AA) and 99ACB(6A) of the Act. For certain brands of pharmaceutical items, the approved ex-manufacturer price will not be reduced at all, as specified in Part 1 of the Schedule (section 5). Conversely, certain other brands listed in Part 2 of the Schedule will experience a reduced price, specifically a 20% reduction, applied to their approved ex-manufacturer price and maximum agreed price (section 6). The obligations imposed by this determination primarily concern the pharmaceutical companies and entities involved in the manufacture and supply of the specified pharmaceutical items. These entities must ensure that the approved ex-manufacturer prices and the maximum agreed prices of the pharmaceutical items are adjusted in accordance with the determination from the specified commencement date. This includes transparently communicating the new prices to stakeholders and updating any relevant documentation or pricing agreements. Additionally, compliance with this determination is critical for maintaining the legal and regulatory standing of the pharmaceutical products in the Australian market. Failure to adhere to the provisions of this determination may result in legal consequences. While the specific penalties for non-compliance are not detailed within the determination itself, breaches of the National Health Act 1953 can generally lead to fines or other penalties as prescribed by the relevant legislative framework. In more severe cases, persistent or egregious non-compliance might also attract criminal charges, which could result in substantial fines or imprisonment, depending on the severity and impact of the breach.