National Health (Originator Brand) Amendment Determination 2017 (No. 7) (PB 80 of 2017)

Overview

The National Health (Originator Brand) Amendment Determination 2017 (No. 7) amends the National Health (Originator Brand) Determination 2015 to determine the originator brands of two drugs, bimatoprost and ibuprofen, that have been newly listed on the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This determination is necessary to facilitate the removal of originator brand data from price disclosure calculations under the National Health (Pharmaceutical Benefits) Regulations 2017. This amendment aims to potentially increase price disclosure-related price reductions for PBS medicines, as originator brands tend to maintain higher prices compared to generic brands. By removing originator brand data, the Government price for PBS medicines would more closely reflect the prices of generic brands, potentially reducing out-of-pocket costs for consumers. This legislative instrument is made under subsection 99ADB(6B) of the National Health Act 1953 and 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. The amendment assists with the progressive realisation of the right to the highest attainable standard of physical and mental health by providing subsidised access to necessary and cost-effective medicines through the PBS. By improving the operation of the PBS and delivering better value for money for PBS medicines, the originator removal measure helps advance the protection of human rights.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2017 (No. 7) applies specifically to the determination of originator brands for certain pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) F2 formulary, which includes drugs that have moved from the F1 formulary or the Combination Drug List (CDL). The determination of originator brands is essential for implementing the originator removal process outlined in the National Health (Pharmaceutical Benefits) Regulations 2017, which aims to increase price disclosure-related price reductions by basing government pricing on the prices of generic brands rather than originator brands. This amendment affects the drugs bimatoprost and ibuprofen, which were newly added to the F2 formulary on 1 October 2017. The decision to classify these brands as originators was based on them being the listed brands when the drugs were on the F1 or CDL. The instrument is made under the authority of the National Health Act 1953 and comes into effect on 1 October 2017.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2017 (No. 7) (the amending 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 two drugs, bimatoprost and ibuprofen, which are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2017 (section 1). The originator brand determination is set out in Schedule 1 of the amending instrument (section 2). This determination is made pursuant to subsection 99ADB(6B) of the National Health Act 1953 (the Act) and is necessary to implement the 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) (section 3). Originator removal will potentially increase price disclosure related price reductions because originator brands tend to maintain higher prices than other brands (section 4). The amending instrument imposes obligations on the parties or entities it governs by determining the originator brand of pharmaceutical items for the two drugs, bimatoprost and ibuprofen, on the PBS F2 formulary (section 1). This determination is based on certain criteria, such as 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 (section 4). 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 (section 4). The amending instrument also provides for offences, penalties, or civil/criminal consequences for breach. However, the Explanatory Statement does not provide information on the maximum penalties for breach (section 5). The instrument is necessary to implement the originator removal provision in the Regulations, which will potentially increase price disclosure related price reductions because originator brands tend to maintain higher prices than other brands (section 4). 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 (section 8). The amending 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 (section 8). The PBS assists with the advancement of this human right by providing subsidised access to medicines for Australians (section 8). Originator removal will improve the operation of the PBS by delivering better value for money for PBS medicines through price reductions (section 8). This will assist consumers by reducing out-of-pocket costs for some PBS medicines (section 8). The instrument is compatible with human rights as it advances the protection of human rights (section 9).