National Health (Originator Brand) Amendment Determination 2019 (No. 7) (PB 82 of 2019)

Overview

The National Health (Originator Brand) Amendment Determination 2019 (No. 7) amends the National Health (Originator Brand) Determination 2015 to address the issue of originator brand data in price disclosure calculations within the Pharmaceutical Benefits Scheme (PBS). This legislative instrument was introduced to ensure the originator brands of pharmaceutical items on the PBS F2 formulary are correctly identified, thereby facilitating price disclosure and potentially increasing price reductions for consumers. Made under subsection 99ADB(6B) of the National Health Act 1953, the determination identifies the originator brands of two drugs moving from the F1 formulary to F2: insulin glargine and rituximab, along with several administrative updates, effective from 1 October 2019. This amendment aims to align with the policy objective of enhancing the affordability and accessibility of medicines by ensuring PBS prices more accurately reflect market prices of generic brands, ultimately benefiting consumers through reduced out-of-pocket costs.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2019 (No. 7) is a legislative instrument that amends the National Health (Originator Brand) Determination 2015 to determine the originator brands of two drugs, insulin glargine and rituximab, as they transition from the F1 to the F2 formulary within the Pharmaceutical Benefits Scheme (PBS). This amendment is made pursuant to the National Health Act 1953 and is effective from 1 October 2019. The amendment addresses the removal of originator brand data from price disclosure calculations, which is intended to potentially increase price reductions under the PBS, ultimately benefiting consumers by reducing out-of-pocket costs for certain medicines. This instrument is essential for implementing the originator removal strategy as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. The Act applies to the entities involved in the supply of pharmaceutical benefits under the PBS, including pharmaceutical companies and healthcare providers, with a focus on drugs listed in the F2 formulary. The amendment is nationally applicable within Australia, aligning with the overarching objectives of the PBS to provide affordable and accessible medicines to the Australian population.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2019 (No. 7) (F2019L01292) amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) by determining the originator brands for two drugs that have moved from the F1 to the F2 formulary of the Pharmaceutical Benefits Scheme (PBS) (sections 1(1) and (2)). The amendment also includes some administrative changes effective from 1 October 2019 (section 1(3)). This legislative instrument is necessary to implement the removal of originator brand data from price disclosure calculations in certain circumstances, as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017 (sections 1(4) and 2). This originator removal will potentially lead to increased price reductions in the PBS because originator brands typically maintain higher prices than other brands (section 2). The criteria for determining the originator brands include the brands being listed when the drugs were on the F1 or Combination Drug List (CDL) (section 3(1) and (2)). The amendment was made under subsection 99ADB(6B) of the National Health Act 1953 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901 (section 4). The companies with a PBS listed brand of the drugs for which an originator brand has been determined were asked for comments on the potential originator brand determination, but no comments were received (section 5). This instrument commences on 1 October 2019 (section 6). This legislative instrument imposes several obligations on the parties or entities it governs. Firstly, it requires the determination of originator brands for two specific drugs moving from the F1 to the F2 formulary (section 1(1) and (2)). Secondly, it mandates the implementation of originator removal for price disclosure calculations in certain circumstances (section 1(4) and 2). Thirdly, it sets out administrative amendments to be effective from 1 October 2019 (section 1(3)). These obligations are designed to improve the operation of the PBS by ensuring better value for money through price reductions and, ultimately, lower out-of-pocket costs for consumers (section 2). Furthermore, it requires compliance with the National Health (Pharmaceutical Benefits) Regulations 2017 and the provisions of the National Health Act 1953 (sections 1(4) and 3(1)). The instrument also stipulates that the originator brand determination is based on the brands being listed when the drugs were on the F1 or CDL (section 3(2)). The National Health (Originator Brand) Amendment Determination 2019 (No. 7) includes provisions for offences, penalties, or civil/criminal consequences for breach. However, the explanatory statement does not specify any particular offences or penalties related to this determination. It is understood that the determination is made under the authority of the National Health Act 1953 and the Acts Interpretation Act 1901, and any breach of the provisions would likely be subject to the penalties and consequences outlined in those Acts (sections 4 and 6). The primary focus of this legislative instrument is to ensure compliance with the originator removal policy and the administrative amendments, which, if not adhered to, could result in legal consequences as prescribed by the relevant Acts. The instrument also indicates that it is a legislative instrument for the purposes of the Legislation Act 2003, which may provide further legal framework for any enforcement actions (section 6).