National Health (Originator Brand) Amendment Determination 2019 (No. 4) (PB 42 of 2019)

Overview

The National Health (Originator Brand) Amendment Determination 2019 (No. 4) amends the National Health (Originator Brand) Determination 2015 to address a specific issue within the Pharmaceutical Benefits Scheme (PBS) under the National Health Act 1953. Enacted to implement the removal of originator brand data from price disclosure calculations, this amendment aims to potentially increase price reductions for certain PBS medicines, thereby reducing out-of-pocket costs for consumers. This determination is necessary as per the provisions in the National Health (Pharmaceutical Benefits) Regulations 2017 and responds to the criteria set by the National Health Act 1953 for drugs transitioning from the F1 formulary to the F2 formulary, which requires price disclosure. The amendment establishes the originator brands for two new drugs, fenofibrate and teriflunomide, that have been added to the PBS F2 formulary on 1 June 2019, aligning with the criteria that these drugs were listed brands when they were initially determined as pharmaceutical items. The instrument was made by the Minister for Health under subsection 99ADB(6B) of the National Health Act 1953 and is compatible with human rights, specifically advancing the right to the highest attainable standard of physical and mental health.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2019 (No. 4) amends the National Health (Originator Brand) Determination 2015 to determine the originator brands of two pharmaceutical items that have moved from the F1 formulary to the F2 formulary on 1 June 2019. This amendment is made under the authority of subsection 99ADB(6B) of the National Health Act 1953, which pertains to the regulation of the Pharmaceutical Benefits Scheme (PBS) under Part VII of the Act. This legislative instrument applies to the originator brands of specific pharmaceutical items that have transitioned from the F1 formulary or the Combination Drug List to the F2 formulary, where they are subject to price disclosure. The amendment is necessary to implement the removal of originator brand data from price disclosure calculations as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017, potentially increasing price-related reductions on the PBS by reflecting the prices of generic brands more closely. This legislative instrument is applicable nationally, aligning with the federal scope of the PBS and the National Health Act 1953. There are no stated exclusions or thresholds in this particular amendment, and it does not extend or restrict the application of the Act beyond what is specified.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2019 (No. 4) (PB 42 of 2019) amends the National Health (Originator Brand) Determination 2015 to determine originator brands for two drugs, fenofibrate and teriflunomide, which were new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary as of 1 June 2019 (section 1(1)). The amendment is made under subsection 99ADB(6B) of the National Health Act 1953 and is necessary to implement originator brand removal for price disclosure calculations in certain circumstances as set out in the National Health (Pharmaceutical Benefits) Regulations 2017 (subsection 1(2)). The determination is based on the criteria that these brands were the listed brands of the drug when it was on the F1 formulary or Combination Drug List (subsection 1(3)). This amendment aims to potentially increase price reductions in the PBS by removing originator brand data, as originator brands tend to maintain higher prices than other brands (subsection 1(4)). The National Health Act 1953, and its accompanying regulations, imposes specific obligations on parties involved in the PBS. These obligations include the requirement for pharmaceutical items to be listed on the PBS formulary, subject to certain criteria (section 85AB). Drugs that meet these criteria move from the F1 formulary or the Combination Drug List to the F2 formulary, where all drugs are subject to price disclosure (section 99AD). The regulations also require the determination of originator brands for pharmaceutical items to facilitate price disclosure calculations (section 99ADB). Pharmaceutical companies must provide accurate and timely information about their products to the Department of Health for inclusion in the PBS listing and pricing processes (section 99ADG). Breaches of the obligations and requirements set out in the National Health Act 1953 and its regulations may result in civil or criminal penalties. For example, section 109D of the Act provides that a person who contravenes a requirement to provide information to the Department of Health may be liable to a penalty of up to $10,200 for an individual and $51,000 for a body corporate. In addition, section 109E of the Act provides that a person who knowingly or recklessly makes a false or misleading statement in relation to a pharmaceutical benefit may be liable to a penalty of up to $204,000 for an individual and $1,020,000 for a body corporate. The National Health (Pharmaceutical Benefits) Regulations 2017 also contain provisions relating to offences and penalties for breaches of the regulations, including fines and imprisonment (regulation 4.01).