EXPLANATORY STATEMENT
National Health Act 1953
National Health (Originator Brand) Amendment Determination 2018 (No. 3)
PB 44 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 ten 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 ten drugs that are moving from F1 and CDL to F2 (acamprosate; adrenaline; buprenorphine; enoxaparin; everolimus; ezetimibe; ezetimibe and rosuvastatin; ezetimibe with simvastatin; lincomycin; and moxonidine). 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 June 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. 3)
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 ten 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. 3) is a legislative instrument made under the authority of the National Health Act 1953. This determination was introduced to address the need for updating the list of originator brands for certain pharmaceutical items that were transitioning from Formulary F1 or the Combination Drug List to Formulary F2 within the Pharmaceutical Benefits Scheme (PBS) as of 1 April 2018. The objective of this amendment was to facilitate the removal of originator brand data from price disclosure calculations under the National Health (Pharmaceutical Benefits) Regulations 2017, which could potentially lead to increased price reductions for PBS medicines. By ensuring that the originator brands of ten new drugs were accurately determined, the legislation aimed to enhance the affordability and accessibility of medicines for Australians, thereby contributing to the progressive realisation of the right to the highest attainable standard of physical and mental health as recognised in international human rights instruments.
The determination was made by the Minister for Health or a delegate under subsection 99ADB(6B) of the National Health Act 1953, considering the criteria set out in the Acts Interpretation Act 1901. The amendment process involved consulting with companies holding listed brands of the affected drugs, although no comments were received. The legislative instrument came into effect on 1 June 2018 and aligns with the human rights obligations under the International Covenant on Economic, Social and Cultural Rights, particularly by improving access to affordable medicines and thus supporting the right to health.
Scope and Application
The National Health (Originator Brand) Amendment Determination 2018 (No. 3) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a pharmaceutical item for ten drugs that have been newly added to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This amendment applies to pharmaceutical companies and drug entities listed on the F2 formulary, specifically those that were originally listed on the F1 formulary or the single brand Combination Drug List (CDL). The amendment operates under the National Health Act 1953 and its regulations, which are applicable across Australia, to ensure consistency in the determination of originator brands and the implementation of originator removal provisions for price disclosure calculations. The legislation excludes any drugs not meeting the specified criteria for originator brand determination or those that were not originally listed on F1 or CDL. The amendment is necessary to facilitate the removal of originator brand data in certain circumstances as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017, which aims to increase price disclosure-related price reductions by aligning government prices more closely with the prices of generic brands, thereby enhancing affordability and accessibility of PBS medicines.
Key Provisions
The National Health (Originator Brand) Amendment Determination 2018 (No. 3) amends the National Health (Originator Brand) Determination 2015 (section 1). This amendment determines the originator brand of ten pharmaceutical items that are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 April 2018 (Schedule 1). These drugs include acamprosate, adrenaline, buprenorphine, enoxaparin, everolimus, ezetimibe, ezetimibe and rosuvastatin, ezetimibe with simvastatin, lincomycin, and moxonidine. The criteria for determining originator brands include the brand being the listed brand when the drug was first determined under the Act (subsection 99ADB(6C)). This determination is necessary to implement the originator removal policy for price disclosure calculations as stipulated in the National Health (Pharmaceutical Benefits) Regulations 2017 (subsection 33(3) of the Acts Interpretation Act 1901).
The Act imposes specific obligations on the parties and entities it governs, particularly concerning the determination and disclosure of originator brands for pharmaceutical items on the PBS F2 formulary. For example, pharmaceutical companies must ensure that the correct originator brand is identified and disclosed for their products to facilitate accurate price calculations and potential reductions. The Regulations also require that these determinations are made in accordance with the criteria set out in the Act. Pharmaceutical companies and suppliers must comply with these determinations and the associated pricing mechanisms, which are designed to enhance the affordability and accessibility of medications under the PBS.
Failure to comply with the requirements of the Act and the Regulations can result in significant consequences. The Act and the Regulations outline various civil and criminal penalties for non-compliance. For instance, the Act provides for fines and imprisonment for breaches related to the mislabeling or misdeclaration of pharmaceutical items, including originator brands (subsection 100A(2) of the Act). The maximum penalties for these offences can be substantial, reflecting the seriousness with which the law treats non-compliance in the healthcare sector. Additionally, civil penalties may be imposed for breaches of price disclosure requirements, further underscoring the importance of accurate and timely originator brand determinations.
In summary, the National Health (Originator Brand) Amendment Determination 2018 (No. 3) plays a crucial role in the PBS framework by establishing the originator brands for ten new pharmaceutical items on the F2 formulary. This determination facilitates the implementation of the originator removal policy, which aims to reduce prices and improve access to affordable medications. Pharmaceutical companies and other stakeholders must adhere to the obligations set out in the Act and the Regulations, with potential penalties for non-compliance underscoring the importance of accurate originator brand identification and disclosure.