National Health (Originator Brand) Amendment Determination 2017 (No. 1) (PB 11 of 2017)

Overview

The National Health (Originator Brand) Amendment Determination 2017 (No. 1) was enacted to amend the National Health (Originator Brand) Determination 2015, ensuring the correct originator brand of a pharmaceutical item is determined for a drug new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This legislative instrument addresses the need 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 policy objective is to potentially increase price reductions under the PBS by ensuring that government prices more closely reflect the prices at which generic brands are sold, thereby reducing out-of-pocket costs for consumers. The Act was enacted by the Parliament of Australia to provide for the administration of the PBS and related matters under the National Health Act 1953.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2017 (No. 1) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a pharmaceutical item for a drug that is new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 February 2017. This amendment applies to drugs that meet certain criteria and are moved to the F2 formulary, which is subject to price disclosure, with the goal of potentially increasing price reductions for PBS medicines. The amendment is made pursuant to subsection 99ADB(6B) of the National Health Act 1953, which mandates that the Minister (or delegate) must consider whether the brand was on F1 or the Combination Drug List (CDL) when it was first determined as a brand of pharmaceutical item. The determination of the originator brand for the specific drug, calcipotriol with betamethasone, was based on it being the listed brand when on F1 or CDL. The instrument also serves 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. This removal aims to better reflect the prices at which generic brands are sold in the market, thereby increasing value for money and potentially reducing out-of-pocket costs for consumers.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2017 (No. 1) amends the National Health (Originator Brand) Determination 2015 (sections 1 to 4) to determine the originator brand of a pharmaceutical item for a drug new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. The Act allows for the determination of originator brands when certain criteria are met, such as when a drug is listed on the F2 formulary (section 99ADB(6B)). The amendment applies to calcipotriol with betamethasone, a drug moving from the Combination Drug List (CDL) to F2, and identifies it as an originator brand (Schedule 1). Under the Act, the determination of originator brands 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 (section 99ADB(6C)). Originator brands tend to maintain higher prices than other brands, and their removal can potentially lead to increased price disclosure-related price reductions, thereby delivering better value for money for PBS medicines (section 85AB). The Regulations prescribe the matters and set out details in relation to the operation of the PBS, including the operation of the F2 formulary and the price disclosure provisions. The Act imposes obligations on the entities involved in the PBS, including the determination of originator brands and compliance with price disclosure requirements. Pharmaceutical companies must ensure that their drugs are listed correctly on the F2 formulary and that they comply with the originator brand determination. The Australian Government, through the Department of Health, is responsible for making the determinations and ensuring that the PBS operates efficiently and effectively. The Regulations also impose obligations on the parties involved, such as the requirement to disclose prices and the calculation of price reductions. The Act does not explicitly state any offences or penalties for breach of its provisions. However, failure to comply with the determinations or the price disclosure requirements could lead to civil or criminal consequences under other provisions of the Act or the Regulations. The maximum penalties for offences under the Act can include fines and imprisonment, depending on the nature and severity of the offence. The Regulations may also impose additional penalties for non-compliance with price disclosure requirements or other provisions. Overall, the National Health (Originator Brand) Amendment Determination 2017 (No. 1) is a necessary instrument to ensure the efficient operation of the PBS and to deliver better value for money for PBS medicines. The determination of originator brands and the removal of originator brand data from price disclosure calculations can potentially lead to increased price reductions and lower out-of-pocket costs for consumers. The Act and the Regulations impose obligations on the entities involved in the PBS, and failure to comply with these obligations could lead to civil or criminal consequences.