National Health (Originator Brand) Amendment Determination 2018 (No. 4) (PB 60 of 2018)

Overview

The National Health (Originator Brand) Amendment Determination 2018 (No. 4) is an amendment to the National Health Act 1953, made to address the need for updating the drug names on the Pharmaceutical Benefits Scheme (PBS) F2 formulary in line with the International Harmonisation of Ingredient Names reform. Enacted by the Australian Government, this amendment aims to ensure that the PBS continues to provide affordable and accessible medicines to Australians by potentially increasing price reductions through the removal of originator brand data from price disclosure calculations. This legislative instrument is necessary to implement the originator removal process outlined in the National Health (Pharmaceutical Benefits) Regulations 2017, which is expected to better align the government price with the prices at which generic brands of the medicine are sold in the market. This amendment affects fifteen drugs on the PBS F2 formulary, whose originator brands have had their drug names updated on 1 July 2018. The determination of originator brands is based on whether the brand was on F1 or the Combination Drug List when it was first determined as a brand of pharmaceutical item. The policy objective of this legislative instrument is to assist with the progressive realisation of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health by ensuring that the PBS provides cost-effective access to necessary medicines.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2018 (No. 4) amends the National Health (Originator Brand) Determination 2015, addressing changes to the drug names of 15 originator brands listed on the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 July 2018. This amendment arises from the International Harmonisation of Ingredient Names reform, necessitating updates to drug nomenclature to align with international naming conventions. The instrument applies to pharmaceutical entities involved in the PBS, particularly those with originator brands on the F2 formulary, and is crafted under the authority of the National Health Act 1953. It does not introduce new originator brands but updates existing drug names, reflecting the international reform, and is necessary to implement originator removal for price disclosure calculations as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. Originator removal is expected to increase price disclosure-related price reductions by ensuring that the Government price more accurately reflects the prices of generic brands, thereby potentially lowering out-of-pocket costs for consumers.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2018 (No. 4) amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) to determine changes to the drug name for 15 drugs which have originator brands of pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS) F2 formulary (sections 1 and 2). The changes to drug names are due to the International Harmonisation of Ingredient Names (IHIN) reform and are consistent with the naming conventions adopted by this reform. This amendment is necessary to implement the removal of originator brand data for price disclosure calculations, a process referred to as "originator removal" (subsection 99ADB(6B) of the Act). Originator removal, as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017, is intended to potentially increase price disclosure related price reductions because originator brands tend to maintain higher prices than other brands. This will allow the Government price to more closely reflect the prices at which generic brands of the medicine are being sold in the market, rather than the prices of all brands. The Act imposes several obligations on the parties involved. Pharmaceutical companies that have a PBS listed brand of the drug must comply with the amended drug names and ensure that their products are appropriately named and classified according to the IHIN reform. The Department of Health must also ensure that the PBS operates efficiently and effectively, including the implementation of the originator removal process. The Pharmaceutical Benefits Advisory Committee (PBAC) must consider the criteria for determining originator brands and ensure that the determinations are made in accordance with the relevant provisions of the Act and Regulations (subsection 99ADB(6C) of the Act). Additionally, all relevant parties must adhere to the requirements of the IHIN reform and update their systems and processes to reflect the changes in drug names. Breaches of the provisions in the Act or Regulations may result in civil or criminal penalties. For instance, the Minister or delegate may take enforcement action against pharmaceutical companies that fail to comply with the amended drug names, which could result in fines or other penalties. Additionally, individuals or entities found guilty of knowingly or recklessly making false or misleading statements in relation to pharmaceutical benefits may be subject to criminal penalties, including fines of up to $22,000 for individuals and $110,000 for bodies corporate (subsection 118(1) of the Act). Furthermore, the Act provides for the imposition of administrative penalties for breaches of certain provisions, with maximum penalties varying depending on the specific offence (subsection 120(1) of the Act).