National Health (Originator Brand) Amendment Determination 2020 (No. 6) (PB 96 of 2020)

Administered by Department of Health, Disability and Ageing

Legislation au F2020L01257 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

National Health Act 1953

National Health (Originator Brand) Amendment Determination 2020 (No. 6)

PB 96 of 2020

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 pharmaceutical item for four drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2020.  It also determines one brand of three pharmaceutical items on the PBS F2 formulary that is being renamed at the request of the sponsor company.

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 (s85AB 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  four drugs that are moving from F1 to F2 (gefitinib, hydroxycarbamide, icatibant and tadalafil) and one specific brand of one drug across three strengths that is changing its brand name (morphine) on 1 October 2020.  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 moving from F1 to F2 were consulted on the potential originator brand determination. Consultation on the originator brand determination for morphine was not required at this time. The consultation previously occurred when morphine was initially added to this instrument.  No additional consultations with experts were undertaken regarding this determination because consultation with the affected companies drew on the knowledge of persons with relevant expertise.

This instrument commences on 1 October 2020.

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 2020 (No. 6) (PB 96 of 2020)

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 pharmaceutical item for four drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2020.  It also determines one brand of three pharmaceutical items on the PBS F2 formulary, which is being renamed at the request of the sponsor company.

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 Connolly

Assistant Secretary

Pricing and PBS Policy Branch

Technology Assessment and Access Division

Department of Health

Overview

The National Health (Originator Brand) Amendment Determination 2020 (No. 6) amends the National Health (Originator Brand) Determination 2015, which was established under the National Health Act 1953, to determine the originator brand of specific pharmaceutical items for inclusion in the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2020. This determination is necessary to implement the removal of originator brand data from price disclosure calculations, a measure that is expected to lead to increased price reductions and lower out-of-pocket costs for consumers. The policy objective behind this amendment is to ensure that the PBS continues to provide affordable access to necessary and cost-effective medicines by facilitating price reductions where originator brands maintain higher prices compared to generic brands. This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments, as it assists with the progressive realisation of the right to the enjoyment of the highest attainable standard of physical and mental health.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2020 (No. 6) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of pharmaceutical items for four drugs that are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2020. This includes gefitinib, hydroxycarbamide, icatibant, and tadalafil. Additionally, the determination addresses the renaming of one brand of three pharmaceutical items on the PBS F2 formulary at the request of the sponsor company, specifically for morphine. This instrument is essential for implementing the removal of originator brand data from price disclosure calculations, which is outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. This removal of originator brand data, known as originator removal, is expected to increase price disclosure-related price reductions as originator brands typically maintain higher prices than other brands. The determination applies to the pharmaceutical industry, specifically to the brands of drugs listed in the PBS F2 formulary, thereby impacting their pricing and market conduct within Australia. The Act applies to the Commonwealth jurisdiction, ensuring consistent regulation and pricing across the nation. The instrument commences on 1 October 2020 and is a legislative instrument for the purposes of the Legislation Act 2003.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2020 (No. 6) amends the National Health (Originator Brand) Determination 2015, focusing on determining the originator brand of four drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective 1 October 2020 (section 3). This amendment also addresses the renaming of one brand of three pharmaceutical items on the PBS F2 formulary at the request of the sponsor company. This amendment is made pursuant to subsection 99ADB(6B) of the National Health Act 1953 (the Act) (section 2). The originator brand determination criteria include the brand being listed when the drug was on the F1 formulary or the Combination Drug List (CDL) (section 3). These criteria ensure that the brand selected as the originator was the one when the drug first appeared on either formulary, providing continuity and consistency in brand identification. The Act imposes several obligations on the parties involved. The Minister, or a delegate, must determine originator brands based on the criteria outlined in the Act and Regulations (subsection 99ADB(6B)). This determination is critical for implementing the originator removal process for price disclosure calculations under the National Health (Pharmaceutical Benefits) Regulations 2017 (subsection 33(3) of the Acts Interpretation Act 1901). The affected companies, particularly those with brands moving from F1 to F2, are required to cooperate with the consultation process and provide necessary information for the determination (section 6). These obligations ensure that the process is transparent, fair, and informed by expert consultation, thereby maintaining the integrity of the PBS. The determination of originator brands and the subsequent originator removal process have significant implications for pricing and access to pharmaceuticals under the PBS. By potentially increasing price reductions for PBS medicines, this amendment aims to make medicines more affordable for consumers, thereby enhancing access to necessary and cost-effective treatments. However, the legislation also outlines potential consequences for non-compliance. While specific penalties are not detailed in the explanatory statement, breaches of the Act or Regulations could result in administrative, civil, or criminal penalties as prescribed under the relevant legislative framework. These could include fines or other sanctions, ensuring compliance and enforcement of the provisions aimed at improving the efficiency and effectiveness of the PBS.

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