National Health (Originator Brand) Amendment Determination 2016 (No. 1) (PB 8 of 2016)

Overview

The National Health (Originator Brand) Amendment Determination 2016 (No. 1) was enacted in 2016 to address a gap in the determination of originator brands of pharmaceutical items for certain drugs listed on the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This legislative instrument amends the National Health (Originator Brand) Determination 2015 to specifically determine the originator brand of pharmaceutical items for two new drugs on the PBS F2 formulary and for new pharmaceutical items of an existing PBS listed drug on the F2 formulary, effective from 1 February 2016. The determination is necessary to implement the removal of originator brand data from price disclosure calculations in certain circumstances, as outlined in the National Health (Pharmaceutical Benefits) Regulations 1960. The primary objective of these amendments is to potentially increase price disclosure-related price reductions for PBS medicines by ensuring that government prices more accurately reflect the prices at which generic brands are being sold in the market. This approach is expected to assist in reducing out-of-pocket costs for consumers, thereby enhancing the affordability and accessibility of necessary medicines within the PBS framework.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2016 (No. 1) amends the National Health (Originator Brand) Determination 2015, determining the originator brand of pharmaceutical items for two drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary and for new pharmaceutical items of an existing PBS listed drug on the F2 formulary, effective from 1 February 2016. This amendment is made under subsection 99ADB(6B) of the National Health Act 1953, and it aims to implement the removal of originator brand data from price disclosure calculations in certain circumstances, as outlined in the National Health (Pharmaceutical Benefits) Regulations 1960. By removing originator brand data, the government intends to increase price disclosure-related price reductions, as originator brands typically maintain higher prices compared to other brands. This amendment is integral to the operation of the PBS, which ensures Australians have access to necessary and cost-effective medicines by regulating the listing, prescribing, pricing, charging, and payment of subsidies for pharmaceutical drugs and medicinal preparations. The amendment applies to pharmaceutical items with specific criteria, such as PBS listing history and whether the brand was the first brand of the drug available on the PBS. The originator brand determination process considers whether the brand was already PBS listed when the drug was on the F1 formulary before the move to F2. The instrument is designed to determine originator brands for the drugs apomorphine, voriconazole, and fentanyl, which are either new to the F2 formulary or existing drugs with new pharmaceutical items on the F2 formulary. The instrument's amendments are necessary to ensure the PBS operates efficiently and delivers better value for money for PBS medicines, ultimately reducing out-of-pocket costs for consumers.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2016 (No. 1) amends the National Health (Originator Brand) Determination 2015 to address the originator brand of certain pharmaceutical items. Specifically, it determines the originator brand for two drugs, apomorphine and voriconazole, which are transitioning from the F1 to the F2 formulary on 1 February 2016, as well as for new pharmaceutical items of an existing drug, fentanyl, on the F2 formulary on the same date (Section 1). The originator brand determinations are based on criteria such as PBS listing history and whether the brand was the first to be listed on the PBS when the drug was on the F1 formulary (Section 2). The Act imposes obligations on the parties and entities it governs, including the requirement for pharmaceutical items to be assessed and classified into formularies (F1 or F2) based on specific criteria. The determination of originator brands is critical for calculating price disclosures under the National Health (Pharmaceutical Benefits) Regulations 1960. Companies with PBS-listed brands must comply with these determinations, which may impact their pricing and market strategies. The removal of originator brand data from price disclosure calculations is intended to potentially increase price reductions and improve the value for money on the PBS by aligning government prices more closely with generic brand prices (Section 3). There are no specific offences, penalties, or civil/criminal consequences outlined in the legislation for breach of the originator brand determinations. However, non-compliance with the requirements set out in the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960 may result in regulatory action, including fines or other penalties as stipulated in the broader legislative framework governing the PBS. The precise penalties would be determined based on the relevant sections of the overarching legislation and any applicable regulations. The legislative instrument is designed to enhance the efficiency and effectiveness of the PBS by ensuring that price disclosure calculations more accurately reflect market conditions, particularly for generic brands. By removing originator brand data from these calculations, the legislation aims to promote greater affordability and accessibility of essential medicines for Australians. The compatibility statement affirms that this instrument aligns with human rights obligations, particularly those under the International Covenant on Economic, Social and Cultural Rights, by facilitating better access to affordable medicines.