National Health (Originator Brand) Amendment Determination 2022 (No. 5)

Administered by Department of Health, Disability and Ageing

Legislation au F2022L01552 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

National Health Act 1953

National Health (Originator Brand) Amendment Determination 2022 (No. 5)

PB 117 of 2022

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 originator brand status for pharmaceutical items of two drug new to the PBS F2 formulary.

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.

Background

An amendment to the originator brand determination is set out in Schedule 1 of this amending instrument for the drug (pomalidomide) which moved from F1 to F2 on
1 October 2022. This delayed change is required due to a misdescription in item 2 of schedule 1 of the National Health (Originator Brand) Amendment Determination 2022 (No. 4) which made incorrect references to the originator brands of the drug, posaconazole.

In addition, an amendment to the originator brand determination is set out in Schedule 1 of this amending instrument for the drug fingolimod, that is moving from F1 to F2 on 1 December 2022. 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 Act’s 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

Celgene Pty Ltd, the company affected by the originator brand determination of pomalidomide was consulted ahead of 1 October 2022 and provided no comments. In addition, Novartis Pharmaceuticals Australia Pty Ltd, the company affected by the originator brand determination of fingolimod was also consulted with no comments received. No additional consultation was considered necessary for this instrument.

This instrument commences on 1 December 2022, however the changes made by the amendment determination for pomalidomide are not factored into price disclosure calculations until after the conclusion of the current price disclosure cycle on 1 April 2023.

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 2022 (No. 5) (PB 117 of 2022)

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 status for pharmaceutical items of one drug which was assigned to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2022. In addition, this instrument also determines originator brand status for pharmaceutical items of one drug new to the PBS F2 formulary on 1 December 2022.

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 that 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 and Aged Care

Overview

The National Health (Originator Brand) Amendment Determination 2022 (No. 5) (PB 117 of 2022) was enacted to amend the National Health (Originator Brand) Determination 2015 and address the issue of originator brand status for pharmaceutical items of drugs moving to the Pharmaceutical Benefits Scheme (PBS) F2 formulary. This legislative instrument is made under the authority of the National Health Act 1953 and aims to ensure that the originator brand status for drugs is correctly determined, facilitating the implementation of price disclosure regulations and potentially increasing price reductions for PBS medicines. The policy objective of this amendment is to support the progressive realisation of the right to the highest attainable standard of physical and mental health by ensuring that the PBS operates effectively, providing better value for money and reducing out-of-pocket costs for consumers. This determination was necessary to correct a misdescription in a previous amendment and to address the delayed change for pomalidomide moving from F1 to F2 on 1 October 2022, as well as the upcoming change for fingolimod moving to F2 on 1 December 2022. The instrument is compatible with human rights as it supports the realisation of the right to the highest attainable standard of health by ensuring that the PBS provides affordable access to necessary and cost-effective medicines. By determining the originator brand status correctly, this amendment helps to improve the operation of the PBS, ultimately benefiting consumers by reducing their out-of-pocket costs for PBS medicines.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2022 (No. 5) amends the National Health (Originator Brand) Determination 2015 to determine the originator brand status for pharmaceutical items of two drugs: pomalidomide and fingolimod. These drugs, which moved from the F1 to F2 formulary on 1 October and 1 December 2022 respectively, are now subject to price disclosure under the National Health Act 1953. The 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. This change is intended to increase price disclosure-related price reductions for PBS medicines, as originator brands tend to maintain higher prices than other brands. Originator brand removal will ensure that the Government price more closely reflects the prices of generic brands being sold in the market, thereby assisting consumers by reducing out-of-pocket costs for some PBS medicines. The National Health (Originator Brand) Amendment Determination 2022 (No. 5) applies to pharmaceutical entities involved in the supply of drugs listed on the F2 formulary, specifically pomalidomide and fingolimod. This legislative instrument is part of the broader regulatory framework established under the National Health Act 1953, which governs the listing, prescribing, pricing, and payment of subsidies for drugs and medicinal preparations as pharmaceutical benefits under the PBS. While the instrument primarily affects the pharmaceutical industry and entities involved in the PBS, its ultimate impact is on consumers who benefit from potential price reductions for certain medicines. The amendment is effective as of 1 December 2022, with the changes for pomalidomide being incorporated into price disclosure calculations from 1 April 2023.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2022 (No. 5) (F2022L01552) amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) to determine the originator brand status for pharmaceutical items of two drugs. This is done to implement the removal of originator brand data from price disclosure calculations as per the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations). This amendment is essential for drugs moving from the F1 formulary, or the single brand Combination Drug List (CDL), to F2. All drugs on F2 are subject to price disclosure (s99ADB(6B) of the Act). The criteria for determining originator brands are based on whether the brands were listed when the drugs were on F1 or CDL (s99ADB(6C) of the Act). The determination for pomalidomide, which moved from F1 to F2 on 1 October 2022, corrects an error from a previous amendment, while the determination for fingolimod, moving from F1 to F2 on 1 December 2022, follows the criteria for originator brand designation. This legislative instrument imposes specific obligations on the Minister for Health, requiring them to determine the originator brand status for pharmaceutical items based on their historical listing status when the drugs were on F1 or CDL. The determination process must comply with the criteria set out in subsection 99ADB(6C) of the Act, ensuring that the originator brand is the brand listed when the drug was first included on the F1 formulary or CDL. The amendment determination must be made in a manner that aligns with the objectives of the National Health Act 1953, which is to regulate the listing, prescribing, pricing, charging, and payment of subsidies for pharmaceutical benefits under the Pharmaceutical Benefits Scheme (PBS). The legislative instrument does not explicitly outline specific offences, penalties, or consequences for breaches. However, the determination of originator brands is integral to the regulatory framework of the PBS, and failure to comply with the criteria or correctly determine originator brands could potentially lead to non-compliance with the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 2017. Such non-compliance might result in administrative actions or legal consequences as prescribed under the relevant sections of the Act and Regulations. The penalties for non-compliance with these regulations can include fines and other enforcement actions as determined by the relevant authorities.

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