National Health (Originator Brand) Amendment Determination 2017 (No. 5) (PB 50 of 2017)

Administered by Department of Health, Disability and Ageing

Legislation au F2017L00823 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

National Health Act 1953

 

National Health (Originator Brand) Amendment Determination 2017 (No. 5)

 

PB 50 of 2017

Authority

This legislative instrument is made pursuant to subsection 99ADB(6B) of the National Health Act 1953 (the Act).

Purpose

This legislative instrument amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) (the Principal Instrument) to determine the originator brand of a pharmaceutical item for one drug new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 July 2017.   

The Principal Instrument determined originator brands of pharmaceutical items that have a drug on the F2 formulary.  On meeting certain criteria, drugs move from the F1 formulary (see s 85AB of the Act), or the single brand Combination Drug List (CDL), to F2.  All drugs on F2 are subject to price disclosure.  The instrument is necessary to implement removal of originator brand data from price disclosure calculations (originator removal) in certain circumstances as set out in the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations).  Originator removal will potentially increase price disclosure related price reductions because originator brands tend to maintain higher prices than other brands.

Amendments

An originator brand determination is set out in Schedule 1 of this amending instrument for one drug that is moving from F1 to F2 (cefuroxime).  Subsection 99ADB(6C) of the Act provides that when deciding whether to determine originator brands the Minister (or delegate) must have regard to 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. 

The main criteria used to decide to determine these brands as originators were that they were the listed brands of the drug when it was on F1 or CDL.

Basis for amendments

Subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to vary or revoke the determination made under subsection 99ADB(6B) for the medicines affected by this amending instrument.

Consultation

The company with a PBS listed brand of the drug for which an originator brand has been determined was asked for comments in relation to the potential originator brand determination.  No comments were received.

This instrument commences on 1 July 2017. This instrument is a legislative instrument for the purposes of the Legislation Act 2003.


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

National Health (Originator Brand) Amendment Determination 2017 (No. 5)

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

This legislative instrument amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) (the Principal Instrument) to determine an originator brand of a pharmaceutical item for one drug new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary.

The instrument is necessary to implement removal of originator brand data for price disclosure calculations (originator removal) in certain circumstances as set out in the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations).  Originator removal will potentially increase PBS price reductions as originator brands tend to maintain higher prices than other brands.  Originator removal means that the Government price would more closely reflect the prices at which generic brands of the medicine are being sold in the market, not the prices of all brands.

The PBS provides Australians with timely, reliable and affordable access to necessary and
cost-effective medicines.  The PBS operates under Part VII of the National Health Act 1953 (the Act) which regulates the listing, prescribing, pricing, charging and payment of subsidies for supply of drugs and medicinal preparations as pharmaceutical benefits.  The Regulations prescribe matters and set out details in relation to the operation of the PBS.

Human rights implications

This legislative instrument is compatible with Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights by assisting with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

The PBS assists with advancement of this human right by providing subsidised access to medicines for Australians.

Originator removal will improve the operation of the PBS by delivering better value for money for PBS medicines through price reductions.  This will assist consumers by reducing out-of-pocket costs for some PBS medicines.

Conclusion

This Legislative Instrument is compatible with human rights as it advances the protection of human rights.

 

Louise Clarke

Assistant Secretary, Pharmaceutical Evaluation Branch,

Pharmaceutical Benefits Division

Department of Health

 

Overview

The National Health (Originator Brand) Amendment Determination 2017 (No. 5) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a pharmaceutical item for one drug that has moved to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 July 2017. This amendment was made under the authority of subsection 99ADB(6B) of the National Health Act 1953 by the Australian Parliament to implement the removal of originator brand data from price disclosure calculations, as stipulated in the National Health (Pharmaceutical Benefits) Regulations 2017. The primary policy objective of this amendment is to potentially increase price disclosure-related price reductions, as originator brands often maintain higher prices than generic brands, thereby enhancing the cost-effectiveness and affordability of PBS medicines for consumers. The amendment was made in consultation with the company holding a PBS listed brand of the drug in question, although no comments were received. This legislative instrument is compatible with human rights, specifically advancing the right to the enjoyment of the highest attainable standard of physical and mental health, as outlined in the International Covenant on Economic, Social and Cultural Rights. By removing originator brand data, the amendment aims to deliver better value for money for PBS medicines, ultimately reducing out-of-pocket costs for consumers and improving access to necessary and cost-effective medicines under the PBS.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2017 amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a pharmaceutical item for one drug new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This instrument is made under subsection 99ADB(6B) of the National Health Act 1953 and is necessary to implement originator removal for price disclosure calculations, potentially increasing price reductions on the PBS. Originator removal means that the Government price would more closely reflect the prices at which generic brands of the medicine are being sold in the market. The PBS, which operates under Part VII of the National Health Act 1953, regulates the listing, prescribing, pricing, charging and payment of subsidies for supply of drugs and medicinal preparations as pharmaceutical benefits. This amending instrument is applicable to the drug cefuroxime which is moving from F1 to F2, and is compatible with human rights by advancing the protection of the right to the highest attainable standard of physical and mental health through subsidised access to medicines and better value for money on the PBS.

Key Provisions

The main operative sections of the National Health (Originator Brand) Amendment Determination 2017 (No. 5) amend the National Health (Originator Brand) Determination 2015 (section 99ADB(6B)). This legislative instrument determines the originator brand of a pharmaceutical item for the drug cefuroxime, which is new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. The Act regulates the listing, prescribing, pricing, charging, and payment of subsidies for the supply of drugs and medicinal preparations as pharmaceutical benefits. The Regulations prescribe matters and set out details in relation to the operation of the PBS. The determination of originator brands is necessary to implement the removal of originator brand data from price disclosure calculations in certain circumstances, as set out in the National Health (Pharmaceutical Benefits) Regulations 2017. The Act imposes certain obligations on the parties or entities it governs. These include the requirement for the Minister or delegate to consider whether the brand was on F1 or the Combination Drug List (CDL) when it was first determined as a brand of pharmaceutical item under subsection 85(6) of the Act. The criteria used to decide these brands as originators include whether they were the listed brands of the drug when it was on F1 or CDL. The Regulations also require originator brand data to be removed from price disclosure calculations in certain circumstances. There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of this Act. However, the Regulations may impose penalties for non-compliance with the requirements of the Act and Regulations. The maximum penalties for breach of the Regulations are not stated in the Explanatory Statement. It is important to note that the instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

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