National Health (Originator Brand) Amendment Determination 2020 (No. 1) (PB 9 of 2020)

Overview

The National Health (Originator Brand) Amendment Determination 2020 (No. 1) was enacted to address the need for determining the originator brand of pharmaceutical items for specific drugs that transition from the F1 formulary or Combination Drug List to the F2 formulary of the Pharmaceutical Benefits Scheme (PBS) on 1 February 2020. This legislative instrument amends the National Health (Originator Brand) Determination 2015 to set the originator brand for two drugs, ezetimibe with atorvastatin and tiotropium, which are new to the PBS F2 formulary. The policy objective is to facilitate the removal of originator brand data from price disclosure calculations, potentially leading to increased price reductions and better value for money for PBS medicines, thereby benefiting consumers by lowering out-of-pocket costs. Made under the authority of subsection 99ADB(6B) of the National Health Act 1953, this instrument ensures that the originator brand determination aligns with the criteria set out in the Act and the Regulations, specifically addressing the criteria that the brand was listed when the drug was on F1 or CDL. This amendment is part of the broader effort to enhance the efficiency and effectiveness of the PBS, ensuring that Australians have access to cost-effective medicines and contributing to the progressive realisation of the right to the highest attainable standard of physical and mental health as recognised in the International Covenant on Economic, Social and Cultural Rights.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2020 (No. 1) amends the National Health (Originator Brand) Determination 2015 to determine the originator brands of pharmaceutical items for two drugs, ezetimibe with atorvastatin and tiotropium, which are being moved to the F2 formulary of the Pharmaceutical Benefits Scheme (PBS) on 1 February 2020. This amendment is necessary to implement the removal of originator brand data from price disclosure calculations in certain circumstances, as set out in the National Health (Pharmaceutical Benefits) Regulations 2017. The criteria for determining these drugs as originator brands include their status as the listed brands of the drug when it was on the F1 formulary or the Combination Drug List (CDL). The amendment applies to entities and individuals involved in the supply and pricing of these pharmaceutical items within Australia, specifically under the framework of the National Health Act 1953 and the PBS. This legislative instrument ensures that the originator brand determinations are consistent with the legislative provisions and facilitates the PBS objective of providing affordable access to necessary medicines by potentially increasing price reductions through the removal of originator brand data.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2020 (No. 1) (F2020L00077) amends the National Health (Originator Brand) Determination 2015 (F2015L01000) to determine the originator brand of pharmaceutical items for two drugs that have moved to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 February 2020. The two drugs involved are ezetimibe with atorvastatin and tiotropium, both of which were previously on the F1 formulary or the Combination Drug List (CDL). The amendment is necessary to implement the removal of originator brand data from price disclosure calculations (subsection 99ADB(6B) of the National Health Act 1953). Originator removal aims to potentially increase price disclosure related price reductions because originator brands tend to maintain higher prices than other brands, thereby improving affordability and access to these medicines under the PBS (subsection 99ADB(6C) of the Act). The Act imposes several obligations on the parties involved. The Minister (or delegate) must consider certain criteria when determining originator brands, such as 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 companies with a PBS listed brand of the drugs for which an originator brand has been determined must be consulted on the potential originator brand determination. These obligations are aimed at ensuring that the originator brand determination process is fair and transparent, and that the interests of all parties are considered. Failure to comply with the requirements of the Act or the Regulations may result in various penalties and consequences. Under the Legislation Act 2003, a person who contravenes a provision of a legislative instrument may be subject to civil or criminal penalties, including fines or imprisonment. The maximum penalties for contraventions of the National Health Act 1953 or the National Health (Pharmaceutical Benefits) Regulations 2017 are not specified in the Explanatory Statement but may vary depending on the nature and severity of the offence. It is important for parties involved in the PBS to be aware of their obligations and to comply with the requirements of the Act and the Regulations to avoid potential penalties and consequences. The National Health (Originator Brand) Amendment Determination 2020 (No. 1) 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. By advancing the progressive realisation of the right to the enjoyment of the highest attainable standard of physical and mental health, the amendment assists with the provision of affordable and accessible medicines for Australians through the PBS. Originator removal is expected to improve the operation of the PBS by delivering better value for money for PBS medicines, ultimately benefiting consumers by reducing out-of-pocket costs for some PBS medicines.