National Health (Originator Brand) Amendment Determination 2019 (No. 8) (PB 90 of 2019)

Administered by Department of Health, Disability and Ageing

Legislation au F2019L01396 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

 

National Health Act 1953

 

National Health (Originator Brand) Amendment Determination 2019 (No. 8)

 

PB 90 of 2019

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 new pharmaceutical item of an existing Pharmaceutical Benefits Scheme (PBS) listed drug on the F2 formulary on 1 November 2019.  It also determines an additional originator brand of an existing PBS listed drug on the F2 formulary.

The Principal Instrument determines 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.  This 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 the addition of a new pharmaceutical item of a PBS listed drug (naloxone) Nyxoid and the addition of new brand of an existing PBS listed drug (enoxaparin) Clexane Safety-Lock on F2 on 1 November 2019.  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 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 drugs 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 November 2019.

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 2019 (No. 8) (PB 90 of 2019)

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 the originator brand of a new pharmaceutical item of an existing Pharmaceutical Benefits Scheme (PBS) listed drug on the F2 formulary on 1 November 2019.  It also determines an additional originator brand of an existing PBS listed drug on the 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.

 

 

 

Thea Daniel

Assistant Secretary

 Pricing and PBS Policy Branch

Technology Assessment and Access Division

Department of Health

Overview

The National Health (Originator Brand) Amendment Determination 2019 (No. 8) amends the National Health (Originator Brand) Determination 2015 to address the problem of originator brands potentially maintaining higher prices than other brands, which impacts the affordability and accessibility of necessary medications under the Pharmaceutical Benefits Scheme (PBS). Enacted by the Parliament of Australia, the determination is necessary to implement the removal of originator brand data from price disclosure calculations, which is outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. This amendment is intended to ensure that PBS price reductions more accurately reflect the market prices of generic brands, thereby improving value for money and reducing out-of-pocket costs for consumers. The policy objective is to enhance the effectiveness and efficiency of the PBS by ensuring that the prices of PBS-subsidised medications are more competitive and affordable for Australians.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2019 (No. 8) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a new pharmaceutical item of an existing Pharmaceutical Benefits Scheme (PBS) listed drug on the F2 formulary on 1 November 2019. It also determines an additional originator brand of an existing PBS listed drug on the F2 formulary. This 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, which may result in increased price reductions for PBS medicines. The instrument applies to pharmaceutical items that meet specific criteria, particularly those transitioning from the F1 formulary or the Combination Drug List to the F2 formulary, which is subject to price disclosure. The Act applies to entities involved in the supply of PBS listed drugs and the regulation of their pricing. The amendment is applicable nationally as it pertains to the Commonwealth's regulation of the PBS under the National Health Act 1953. There are no specific exclusions mentioned in the text, but the applicability is confined to the scope of the F2 formulary and the PBS.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2019 (No. 8) amends the National Health (Originator Brand) Determination 2015. This determination is essential for implementing changes related to the removal of originator brand data from price disclosure calculations in the Pharmaceutical Benefits Scheme (PBS). Specifically, it determines the originator brand of a new pharmaceutical item of an existing PBS listed drug on the F2 formulary and an additional originator brand of an existing PBS listed drug on the F2 formulary, both effective from 1 November 2019. The criteria for determining these originator brands include the brands being listed when the drug was on the F1 formulary or the Combination Drug List (CDL), as stipulated in subsection 99ADB(6C) of the National Health Act 1953 (the Act). This determination imposes obligations on the entities responsible for the PBS listed brands of the drugs affected. Companies with a PBS listed brand of the drugs for which an originator brand has been determined were consulted and requested to provide comments on the potential originator brand determination. However, no comments were received from the consulted companies. The amendment is necessary to ensure that the PBS can implement price reductions more effectively by removing originator brand data from price disclosure calculations, as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. This amendment is intended to reflect the prices of generic brands more accurately, potentially leading to better value for money for PBS medicines and reduced out-of-pocket costs for consumers. Under the National Health Act 1953, the determination of originator brands is crucial for the operation of the PBS, which aims to provide Australians with affordable access to necessary and cost-effective medicines. The Act mandates that drugs on the F2 formulary are subject to price disclosure. The amendments made by this determination ensure that the originator brands are correctly identified, thereby facilitating the originator removal process and supporting the PBS's objective of delivering better value for money through potential price reductions. The Regulations provide further details on the operation of the PBS, including the specifics of originator removal. Breaching the provisions of this determination could have legal implications. Although the explanatory statement does not specify penalties for non-compliance, breaches of the National Health Act 1953 or the Regulations could result in administrative, civil, or criminal penalties, depending on the nature and severity of the breach. These could include fines or other sanctions, as prescribed by the Act or relevant regulations. The precise consequences would depend on the specific circumstances of the breach and the applicable legal provisions.

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