National Health (Originator Brand) Amendment Determination 2021 (No. 1) (PB 7 of 2021)

Overview

The National Health (Originator Brand) Amendment Determination 2021 (No. 1) was enacted to address the need for determining the originator brand of a pharmaceutical item, specifically methenamine, which moved from the F1 to the F2 formulary on 1 February 2021. This determination is necessary to implement the removal of originator brand data from price disclosure calculations, as set out in the National Health (Pharmaceutical Benefits) Regulations 2017, potentially leading to increased price reductions on the Pharmaceutical Benefits Scheme (PBS). The National Health Act 1953, administered by the Commonwealth Parliament, governs the PBS, ensuring timely, reliable and affordable access to necessary and cost-effective medicines for Australians. The policy objective of this amendment is to enhance the value for money of PBS medicines through price reductions, benefiting consumers by reducing out-of-pocket costs for some PBS medicines. This legislative instrument is compatible with human rights, particularly the right to the highest attainable standard of physical and mental health, as it assists with the progressive realisation of this right by providing subsidised access to medicines for Australians.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2021 (No. 1) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of a pharmaceutical item for one drug, methenamine, new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 February 2021. This determination is made pursuant to the National Health Act 1953 and 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. This amendment is expected to potentially increase price disclosure-related price reductions since originator brands generally maintain higher prices than other brands, thereby offering better value for money for PBS medicines and reducing out-of-pocket costs for consumers. The amendment applies to the drug methenamine, specifically focusing on its originator brand as it moves from the F1 formulary to the F2 formulary, which requires price disclosure. The amendment considers the brand's history, specifically whether it was listed on the F1 or Combination Drug List when it was first determined as a brand of pharmaceutical item. The decision to amend the determination was made in consultation with the company holding the PBS listed brand of the drug. This legislative instrument is compatible with human rights, particularly the right to the highest attainable standard of physical and mental health, by advancing the protection of human rights through better access to affordable and cost-effective medicines.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2021 (No. 1) amends the National Health (Originator Brand) Determination 2015, specifically determining the originator brand of a pharmaceutical item for a drug moving from the F1 to the F2 formulary on the Pharmaceutical Benefits Scheme (PBS) as of 1 February 2021 (sections 1 and 2). This amendment is necessary to implement the removal of originator brand data from price disclosure calculations (subsection 99ADB(6B) of the Act). Originator removal is intended to potentially increase price disclosure related price reductions, as originator brands often maintain higher prices than other brands (subsection 99ADB(6C) of the Act). The Act imposes certain obligations on the parties it governs. Pharmaceutical companies must comply with the determinations regarding the originator brands of drugs as they transition from F1 to F2. This involves ensuring that the correct originator brand is identified and that all relevant data is accurately reported for price disclosure purposes. Additionally, the Pharmaceutical Benefits Advisory Committee and the Department of Health are required to monitor the impact of originator removal on the PBS, ensuring that the intended benefits are achieved without compromising the quality or accessibility of essential medications. The legislation does not explicitly state any offences or penalties for non-compliance with the originator brand determinations. However, any failure to comply with the provisions of the National Health Act 1953 or the regulations made under it could potentially lead to enforcement actions under the broader regulatory framework. This might include administrative penalties or legal action if the non-compliance results in significant harm to the operation of the PBS or to the health and safety of consumers. The National Health (Pharmaceutical Benefits) Regulations 2017 outline the mechanisms for dealing with breaches, which could include fines or other sanctions. The compatibility with human rights is addressed in the Statement of Compatibility with Human Rights, which asserts that the instrument is compatible with Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights. By facilitating the progressive realisation of the right to the highest attainable standard of physical and mental health through improved price reductions, the legislation supports the broader goal of making essential medicines more accessible and affordable for Australians. The originator removal mechanism is seen as a means to achieve better value for money in the PBS, ultimately benefiting consumers by reducing out-of-pocket costs for some PBS medicines.