National Health (Originator Brand) Amendment Determination 2023 (No. 2)

Overview

The National Health (Originator Brand) Amendment Determination 2023 (No. 2) was enacted to amend the National Health (Originator Brand) Determination 2015, specifically addressing the determination of originator brands for two pharmaceutical drugs, follitropin beta and varenicline, which are being moved from the F1 formulary to the F2 formulary on the Pharmaceutical Benefits Scheme (PBS) on 1 April 2023. This legislative instrument is crucial for implementing the removal of originator brand data from price disclosure calculations as outlined in the National Health (Pharmaceutical Benefits) Regulations 2017. The policy objective is to potentially increase price disclosure-related price reductions for PBS medicines, given that originator brands often maintain higher prices than other brands, thereby improving the affordability and accessibility of medicines for Australians. The determination of originator brands is based on the criteria that the brands were listed when the drugs were on the F1 formulary or the Combination Drug List, and the amendment is made under the authority of the National Health Act 1953. The legislation is compatible with human rights, supporting the right to the highest attainable standard of physical and mental health by enhancing the affordability of essential medicines through the PBS.

Scope and Application

The National Health (Originator Brand) Amendment Determination 2023 (No. 2) amends the National Health (Originator Brand) Determination 2015 to establish the originator brand status for two pharmaceutical items, follitropin beta and varenicline, effective from 1 April 2023. This amendment applies to pharmaceutical items that meet certain criteria and move from the F1 formulary, or the Combination Drug List, to the F2 formulary. This determination is necessary to implement the removal of originator brand data from price disclosure calculations under the National Health (Pharmaceutical Benefits) Regulations 2017. Originator brand removal from these calculations is expected to potentially increase price disclosure-related price reductions, as originator brands generally maintain higher prices than other brands, thus aligning government prices more closely with the prices of generic brands. The amendment operates under the authority of the National Health Act 1953 and is applicable nationwide as it concerns the Pharmaceutical Benefits Scheme, which is a Commonwealth initiative. The determination applies to pharmaceutical entities that supply these drugs and are listed on the F2 formulary, meaning it encompasses pharmaceutical companies and entities that manufacture, distribute, or supply these medications within Australia. The amendment ensures that when these drugs transition to the F2 formulary, the originator brand status is correctly identified, facilitating price disclosure processes and potentially lowering consumer costs. No exclusions or thresholds are specified within the determination itself; however, its scope is inherently limited to the specific drugs mentioned and their transition to the F2 formulary. The determination does not extend to other drugs or entities not specified within the amendment, thereby ensuring its targeted application.

Key Provisions

The National Health (Originator Brand) Amendment Determination 2023 (No. 2) (F2023L00398) amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) to determine originator brands of pharmaceutical items for two drugs new to the PBS F2 formulary on 1 April 2023. Specifically, the amendment identifies follitropin beta and varenicline as originator brands, effective from the date the drugs move from the F1 formulary to F2 (sections 1 and 2 of Schedule 1). Originator brand determination is crucial for implementing the originator removal provision in the National Health (Pharmaceutical Benefits) Regulations 2017, which potentially increases price disclosure related price reductions by removing originator brand data from price disclosure calculations, as originator brands tend to maintain higher prices than other brands (sections 1 and 2 of Schedule 1). The Act imposes obligations on the Minister for Health or their delegate to determine originator brands of pharmaceutical items under subsection 99ADB(6B) of the National Health Act 1953. When deciding whether to determine originator brands, the Minister must consider whether the brand was on the F1 formulary or the Combination Drug List (CDL) when it was first determined as a brand of pharmaceutical item under subsection 85(6) of the Act (subsection 99ADB(6C)). The basis for these amendments relies on subsection 33(3) of the Interpretation Act 1901, which allows for the variation or revocation of a determination under subsection 99ADB(6B) for the affected medicines (subsection 33(3) of the Interpretation Act 1901). Breach of the requirements or obligations under the Act could lead to civil or criminal penalties, although the specific penalties are not outlined in the determination. However, the Regulations may provide for penalties in relation to non-compliance with the provisions of the Act and Regulations. Additionally, failure to comply with the originator brand determination could result in price disclosure-related price reductions not being fully realised, potentially impacting the affordability and accessibility of medicines for consumers. This legislative instrument is compatible with human rights as it advances the protection of human 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, as per Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights. By determining originator brands and removing originator brand data from price disclosure calculations, the instrument aims to improve the operation of the Pharmaceutical Benefits Scheme (PBS) by delivering better value for money for PBS medicines through price disclosure reductions, ultimately assisting consumers by reducing out-of-pocket costs for some PBS medicines.