National Health (Originator Brand) Amendment Determination 2018 (No. 2) (PB 26 of 2018)

Administered by Department of Health, Disability and Ageing

Legislation au F2018L00419 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

National Health Act 1953

 

National Health (Originator Brand) Amendment Determination 2018 (No. 2)

 

PB 26 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 three drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 April 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 three drugs that are moving from F1 and CDL to F2 (budesonide with eformoterol; certolizumab pegol; and ganciclovir).  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 companies with a PBS listed brand of the drug for which an originator brand has been determined were asked for comments in relation to the potential originator brand determination.  No comments were received.

This instrument commences on 1 April 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. 2)

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 three drugs 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. 2) amends the National Health (Originator Brand) Determination 2015 to determine the originator brands of three specific drugs that were new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary as of 1 April 2018. This amendment was necessary to implement the removal of originator brand data from price disclosure calculations, as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. The policy objective behind this change is to potentially increase price reductions within the PBS by reflecting the prices of generic brands more accurately, thereby providing better value for money and reducing out-of-pocket costs for consumers. This legislative instrument was enacted by the Australian Parliament under the authority of the National Health Act 1953, aiming to address the gap in the pricing strategy of the PBS by ensuring that the Government price better aligns with the market prices of generic medicines.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2018 (No. 2) amends the National Health (Originator Brand) Determination 2015, determining the originator brand of a pharmaceutical item for three drugs that are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 April 2018. The Act applies to pharmaceutical entities, specifically those involved in the PBS, and concerns the determination of originator brands for drugs that have transitioned from the F1 formulary or the Combination Drug List to the F2 formulary. This geographic and jurisdictional reach is national, falling under the Commonwealth's authority as outlined in the National Health Act 1953. The determination is necessary to implement originator removal for price disclosure calculations as per the National Health (Pharmaceutical Benefits) Regulations 2017, potentially increasing price reductions on the PBS by reflecting the prices of generic brands more closely than those of originator brands. The instrument does not specify exclusions, exemptions, or thresholds, but the application may be extended or restricted through subordinate instruments under the authority of the National Health Act 1953.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2018 (No. 2) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand for three new pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective 1 April 2018. The determination specifically applies to budesonide with eformoterol, certolizumab pegol, and ganciclovir, which were moved from the F1 formulary or the Combination Drug List (CDL) to F2 (sections 1 and 2). The criteria for determining the originator brand included the brand being the listed brand when the drug was first on F1 or CDL (subsection 99ADB(6C) of the National Health Act 1953). This legislative instrument imposes obligations on the Department of Health and the pharmaceutical companies to ensure that the originator brands of specified drugs are accurately identified and recorded. The determination must be made in accordance with the criteria set out in the National Health Act and the National Health (Pharmaceutical Benefits) Regulations 2017 (subsection 99ADB(6B) of the Act). The companies with a PBS listed brand of the drugs affected by this amendment were consulted, although no comments were received. Failure to comply with the provisions of the National Health Act and the Regulations may result in penalties or other legal consequences. While the specific penalties for non-compliance with this determination are not explicitly stated in the document, breaches of the National Health Act or the Regulations may generally result in fines or other sanctions as prescribed by law. The National Health (Pharmaceutical Benefits) Regulations 2017 may outline specific penalties for non-compliance, which could include substantial fines for individuals and corporations. The Act itself provides for a range of penalties, including fines, imprisonment, or both, depending on the nature and severity of the breach.

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