National Health (Originator Brand) Amendment Determination 2022 (No. 4)

Overview

The National Health (Originator Brand) Amendment Determination 2022 (No. 4) amends the National Health (Originator Brand) Determination 2015, a legislative instrument under the National Health Act 1953, to determine the originator brands for two new pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS) F2 formulary, effective from 1 October 2022. This amendment was enacted by the Australian Parliament to address the need for price transparency and affordability of medicines under the PBS. The policy objective is to facilitate the removal of originator brand data from price disclosure calculations, potentially leading to increased price reductions for consumers as originator brands typically maintain higher prices. This change is expected to enhance the value for money in the PBS by aligning government prices more closely with the prices of generic brands, thereby reducing out-of-pocket costs for consumers.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2022 (No. 4) amends the National Health (Originator Brand) Determination 2015 to determine originator brands of pharmaceutical items for two drugs, plerixafor and pomalidomide, which are new to the Pharmaceutical Benefits Scheme (PBS) F2 formulary as of 1 October 2022. This amendment is made under subsection 99ADB(6B) of the National Health Act 1953 and is necessary to implement the removal of originator brand data from price disclosure calculations under certain conditions outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. This change is expected to lead to increased price disclosure-related price reductions on the PBS, as originator brands generally maintain higher prices than other brands. The determination of originator brands is based on the criteria that the brands were listed when the drug was initially on the F1 formulary, and these amendments are made in accordance with the Acts Interpretation Act 1901. This legislative instrument applies to pharmaceutical companies with brands of the drugs moving from F1 to F2 and affects the conduct and transactions related to the pricing of these drugs within the PBS. It has a national jurisdictional reach, impacting the entire Australian pharmaceutical market. There are no stated exclusions, exemptions, or thresholds in this particular determination, although the application of the Act and its subordinate instruments may extend or restrict its scope.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2022 (No. 4) amends the National Health (Originator Brand) Determination 2015, setting the originator brands for two drugs, plerixafor and pomalidomide, which are moving from the F1 to the F2 formulary on 1 October 2022. This amendment 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 (section 99ADB(6B) of the Act). The amendment aims to potentially increase price disclosure-related price reductions for these drugs, as originator brands tend to maintain higher prices than other brands (Schedule 1). This change is designed to ensure that government prices more accurately reflect the prices at which generic brands of the medicines are being sold in the market. The National Health Act 1953 governs the Pharmaceutical Benefits Scheme (PBS), and this amendment requires that when determining originator brands, the Minister or delegate must consider whether the brand was on the F1 formulary or the single brand Combination Drug List when it was first determined as a brand of pharmaceutical item (section 99ADB(6C) of the Act). The amendment to the originator brand determination for the two drugs is based on them being the listed brands of the drug when it was on F1 (subsection 85(6) of the Act). Subsection 33(3) of the Acts Interpretation Act 1901 provides the authority to vary or revoke the determination made under subsection 99ADB(6B) for the affected medicines. Companies with a PBS listed brand of the drugs moving from F1 to F2 were consulted, but no comments were received, and no additional consultation with experts was undertaken. The legislative instrument imposes obligations on the parties involved, specifically the pharmaceutical companies that hold the originator brand rights for plerixafor and pomalidomide. These companies must comply with the amended determination by ensuring that their brands are correctly identified as originator brands for the purposes of the PBS and price disclosure calculations. Failure to comply with these obligations could result in the PBS not accurately reflecting the true market prices of these drugs, potentially leading to higher out-of-pocket costs for consumers and less effective price reductions. The instrument also sets out that the amended determination will take effect from 1 October 2022, providing a clear timeline for compliance. In terms of consequences for non-compliance, the legislation does not explicitly state offences or penalties for breach. However, any failure to comply with the originator brand determination could lead to the PBS not achieving its intended goal of providing cost-effective medicines to Australians. While there are no specific criminal or civil penalties outlined in the legislation, non-compliance could result in the government taking administrative actions to ensure compliance, such as audits or investigations. Additionally, ongoing non-compliance could lead to legislative or regulatory changes to address the issues identified.