National Health (Originator Brand) Amendment Determination 2016 (No. 8) (PB 105 of 2016)

Overview

The National Health (Originator Brand) Amendment Determination 2016 (No. 8) amends the National Health (Originator Brand) Determination 2015, addressing the problem of higher originator brand drug prices on the Pharmaceutical Benefits Scheme (PBS) formulary. Enacted under the National Health Act 1953, this amendment was introduced to determine the originator brand of seven new drugs moving to the F2 formulary on 1 December 2016, aiming to enhance price transparency and affordability. This legislative instrument facilitates the removal of originator brand data from price disclosure calculations in certain circumstances, potentially increasing price reductions and providing better value for money for PBS medicines. The amendment was developed in consultation with relevant stakeholders, including drug companies, and is compatible with human rights by supporting the right to the highest attainable standard of physical and mental health through improved access to affordable medicines.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2016 applies to seven specific pharmaceutical drugs that are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 December 2016. The Act amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of these pharmaceutical items, which include aripiprazole, bivalirudin, entecavir, itraconazole, rivastigmine, olmesartan with amlodipine, and olmesartan with hydrochlorothiazide. These drugs move from the F1 formulary or the Combination Drug List (CDL) to F2, where all drugs are subject to price disclosure. The determination of the originator brand is necessary to implement the removal of originator brand data from price disclosure calculations as outlined in the National Health (Pharmaceutical Benefits) Regulations 1960, which aims to potentially increase price reductions and provide better value for money for PBS medicines. The Act applies to the Minister for Health, or a delegate, who determines the originator brands based on whether the brand was on F1 or CDL when it was first determined as a brand of pharmaceutical item. The instrument is made under subsection 99ADB(6B) of the National Health Act 1953 and relies on subsection 33(3) of the Acts Interpretation Act 1901 to vary or revoke the determination made for the affected medicines. The instrument is compatible with human rights as it advances the protection of the right to the highest attainable standard of physical and mental health by providing subsidised access to medicines for Australians, thereby reducing out-of-pocket costs for some PBS medicines.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2016 (No. 8) amends the National Health (Originator Brand) Determination 2015 (F2016L01840) (paragraph 1). This legislative instrument determines the originator brand of seven pharmaceutical items that are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 December 2016 (paragraph 2). The amendment specifically addresses five drugs moving from the F1 formulary (aripiprazole, bivalirudin, entecavir, itraconazole, and rivastigmine) and two drugs moving from the Combination Drug List (CDL) (olmesartan with amlodipine and olmesartan with hydrochlorothiazide) (paragraph 3). This determination is necessary to implement the removal of originator brand data from price disclosure calculations under certain circumstances as outlined in the National Health (Pharmaceutical Benefits) Regulations 1960 (paragraph 4). The determination of originator brands is made pursuant to subsection 99ADB(6B) of the National Health Act 1953 (the Act) (paragraph 5). When deciding to determine an originator brand, the Minister (or delegate) must consider whether the brand was on F1 or CDL when it was first determined as a brand of pharmaceutical item under subsection 85(6) of the Act (paragraph 6). The main criterion used to decide this brand as an originator is that it was the listed brand of the drug when it was on F1 or CDL (paragraph 7). The amendment is based on subsection 33(3) of the Acts Interpretation Act 1901 (paragraph 8). The affected companies with a PBS listed brand of the drug were consulted, but no comments were received (paragraph 9). The instrument commences on 1 December 2016 and is a legislative instrument for the purposes of the Legislation Act 2003 (paragraph 10). The National Health (Originator Brand) Amendment Determination 2016 (No. 8) imposes obligations on pharmaceutical companies and the Department of Health to determine the originator brand of pharmaceutical items for drugs moving to the F2 formulary of the PBS (paragraph 11). Pharmaceutical companies must provide the necessary information and data to support the determination of the originator brand (paragraph 12). The Department of Health is responsible for evaluating the information provided and making the determination (paragraph 13). Once determined, the originator brand must be disclosed in price disclosure calculations, potentially leading to increased price reductions for PBS medicines (paragraph 14). Originator removal is intended to improve the operation of the PBS by delivering better value for money for PBS medicines through price reductions, which will assist consumers by reducing out-of-pocket costs for some PBS medicines (paragraph 15). Breach of the requirements under this legislative instrument may result in civil or criminal consequences (paragraph 16). The National Health (Pharmaceutical Benefits) Regulations 1960 provide for the imposition of penalties for non-compliance with the PBS regulations (paragraph 17). The maximum penalty for contravening a regulation under the Regulations is generally $22,200 for a corporation and $4,440 for an individual (paragraph 18). Additionally, the Pharmaceutical Benefits Scheme (PBS) (Pharmaceutical Benefits Charge) (Refund of Excess Pharmaceutical Benefits Charge) Determination 2008 provides for the imposition of civil penalties for incorrect claims or statements made in relation to PBS benefits (paragraph 19). The maximum penalty for an individual is $2,220 and for a corporation is $11,100 (paragraph 20). These penalties may be enforced through legal action by the Department of Health or other relevant authorities.