National Health (Originator brand) Amendment Determination 2021 (No. 7)

Administered by Department of Health, Disability and Ageing

Legislation au F2021L01640 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

 

National Health Act 1953

 

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

PB 126 of 2021

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 two drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This change is taking place on
1 December 2021. 

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 two drugs that are moving from F1 to F2 (dasatinib and fulvestrant) on 1 December 2021. 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.

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. No comments were received from the affected companies. No additional consultation with experts was undertaken regarding this determination because consultation with the affected companies drew on the knowledge of persons with relevant expertise.

This instrument commences on 1 December 2021.

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 2021 (No. 7) (PB 126 of 2021)

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 two drugs new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 December 2021. 

The instrument is necessary to implement removal of originator brand data for price disclosure calculations in certain circumstances as set out in the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations). Originator brand removal from price disclosure calculations will potentially increase PBS price reductions, as originator brands tend to maintain higher prices than other brands. Originator brand 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, 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 engages 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 is a benefits scheme which assists with providing subsidised access to medicines for people. This is a positive and supportive step towards attaining the highest standard of health for all Australians.

Determining an originator brand will improve the operation of the PBS by delivering better value for money for PBS medicines through price disclosure 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.

 

 

Nikolai Tsyganov

Acting Assistant Secretary

Pricing and PBS Policy Branch

Technology Assessment and Access Division

Department of Health

Overview

The National Health (Originator Brand) Amendment Determination 2021 (No. 7) amends the National Health (Originator Brand) Determination 2015 to address the issue of determining the originator brand of two new pharmaceutical items, dasatinib and fulvestrant, which are moving from the F1 formulary to the F2 formulary on the Pharmaceutical Benefits Scheme (PBS) on 1 December 2021. This amendment is made pursuant to subsection 99ADB(6B) of the National Health Act 1953 and is necessary to implement the removal of originator brand data from price disclosure calculations as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. This change is intended to potentially increase price disclosure-related price reductions, as originator brands tend to maintain higher prices than other brands. The determination was made following consultation with the companies holding PBS listed brands of the affected drugs, and no comments were received. The amendment is designed to enhance the affordability and accessibility of essential medicines for Australians, thereby contributing to the progressive realisation of the right to the highest attainable standard of physical and mental health.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2021 (No. 7) amends the National Health (Originator Brand) Determination 2015 to specify the originator brand of two drugs, dasatinib and fulvestrant, which are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This amendment is effective from 1 December 2021 and is made under the authority of subsection 99ADB(6B) of the National Health Act 1953. The determination 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 change is expected to increase price disclosure-related price reductions because originator brands generally maintain higher prices than other brands, thereby improving value for money and potentially reducing out-of-pocket costs for consumers under the PBS. The instrument is applicable to the pharmaceutical industry and specifically to entities involved in the supply of dasatinib and fulvestrant within Australia. The amendment does not specify any exclusions, exemptions, or thresholds beyond those outlined in the National Health Act and its associated regulations.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2021 (No. 7) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand of two drugs (dasatinib and fulvestrant) that are moving from the F1 to F2 formulary of the Pharmaceutical Benefits Scheme (PBS) on 1 December 2021 (section 2). This determination is necessary to implement the removal of originator brand data from price disclosure calculations, as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017 (section 3). This change is expected to potentially increase price disclosure-related price reductions, as originator brands generally maintain higher prices than other brands (section 3). The criteria used to determine these brands as originators was that they were the listed brands of the drug when it was on F1 (section 3). The Act imposes obligations on the parties involved, including the Minister for Health or their delegate, who must determine the originator brand of pharmaceutical items that meet certain criteria (subsection 99ADB(6B) of the Act). This includes considering whether the brand was on F1 or the Combination Drug List (CDL) when it was first determined as a brand of pharmaceutical item (subsection 99ADB(6C) of the Act). The affected companies, those with a PBS listed brand of the drugs moving from F1 to F2, were consulted on the potential originator brand determination (section 5). The Act also requires that the determination be made in accordance with subsection 33(3) of the Acts Interpretation Act 1901, which allows for the variation or revocation of a determination (section 4). Breach of the obligations and requirements outlined in the Act may result in civil or criminal consequences. However, the explanatory statement does not provide specific information on offences, penalties, or consequences for breach. It is important to note that the National Health (Pharmaceutical Benefits) Regulations 2017 may contain provisions related to penalties for non-compliance with the Act and Regulations. The National Health (Originator Brand) Amendment Determination 2021 (No. 7) is compatible with human rights as it advances the protection of human rights by assisting with the progressive realisation of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health (section 8). By determining the originator brand of pharmaceutical items, the Act contributes to the provision of affordable access to necessary and cost-effective medicines for Australians through the PBS. This, in turn, supports the attainment of the highest standard of health for all Australians and reduces out-of-pocket costs for some PBS medicines.

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