National Health (Originator Brand) Amendment Determination 2018 (No. 1) (PB 11 of 2018)

Administered by Department of Health, Disability and Ageing

Legislation au F2018L00061 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

National Health Act 1953

 

National Health (Originator Brand) Amendment Determination 2018 (No. 1)

 

PB 11 of 2018

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 February 2018.   

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 CDL to F2 (abacavir with lamivudine).  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 February 2018. 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 2018 (No. 1)

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.

 

Lisa La Rance

Assistant Secretary

 Pricing and PBS Policy Branch

Technology Assessment and Access Division

Department of Health

 

Overview

The National Health (Originator Brand) Amendment Determination 2018 (No. 1) was enacted to address the need for amending 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. This determination was necessitated by the removal of originator brand data from price disclosure calculations, which is outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. The purpose of this removal is to potentially increase price disclosure-related price reductions, as originator brands tend to maintain higher prices than other brands. This amendment was made under the authority of the National Health Act 1953 by the Parliament of Australia, with the policy objective of ensuring better value for money for PBS medicines through price reductions, thereby assisting consumers by reducing out-of-pocket costs for some PBS medicines.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2018 (No. 1) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a pharmaceutical item for a drug new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, specifically abacavir with lamivudine, on 1 February 2018. This amendment 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, which will potentially increase price disclosure related price reductions as originator brands tend to maintain higher prices than other brands. The amendment applies to pharmaceutical entities involved with the PBS, specifically those entities that supply or manufacture the affected drug, and the changes are designed to improve the affordability and accessibility of necessary medicines by ensuring that the PBS reflects the prices at which generic brands of the medicine are being sold in the market. This legislative instrument operates under the authority of the National Health Act 1953, which regulates the listing, prescribing, pricing, charging and payment of subsidies for supply of drugs and medicinal preparations as pharmaceutical benefits.

Key Provisions

The main operative sections of this legislation are the amendments to the National Health (Originator Brand) Determination 2015, specifically the introduction of Schedule 1 which determines the originator brand of the drug abacavir with lamivudine (sections 3 and 4). This determination is necessary to implement the originator removal process outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. Originator removal is a policy aimed at potentially increasing price reductions for certain pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS) by basing government pricing on generic brands rather than originator brands, which tend to have higher prices (sections 2 and 3). The obligations imposed by this legislation are primarily on the entities involved in the manufacture, supply, and pricing of pharmaceutical items on the PBS. Manufacturers and suppliers must comply with the originator brand determination and ensure their products are correctly identified in terms of their originator status. This is crucial for accurate price disclosure calculations and subsequent price reductions. The legislation also places an obligation on the Minister for Health, or their delegate, to determine originator brands for drugs moving from the F1 formulary or the Combination Drug List (CDL) to the F2 formulary (section 5). There are no direct offences, penalties, or civil/criminal consequences outlined in this amending instrument. However, non-compliance with the originator brand determination could indirectly lead to legal issues if it results in incorrect pricing calculations or misrepresentation of pharmaceutical items on the PBS. Such non-compliance might be addressed through administrative actions or other legislative provisions within the National Health Act 1953 or the National Health (Pharmaceutical Benefits) Regulations 2017, although these specific measures are not detailed in the current amending instrument. The overarching objective is to ensure the PBS operates efficiently and provides cost-effective access to necessary medicines for Australians.

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