EXPLANATORY STATEMENT
Select Legislative Instrument 2012 No. 56
National Health Act 1953
National Health (Pharmaceutical Benefits) Amendment Regulation 2012 (No. 2)
Section 140 of the National Health Act 1953 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters which are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the regulation is to amend regulation 8 of the National Health (Pharmaceutical Benefits) Amendment Regulations 2010 (No.5) by creating subregulation 8(3) to specify that sales revenue and adjusted volume data is to be excluded from the weighted average disclosed price (WADP) calculations for brands of pharmaceutical items (listed brands) that are in the third transitional disclosure cycle and have a first reporting period ending on 31 January 2012.
Regulation 37G of the National Health (Pharmaceutical Benefits) Regulations 1960 (the Principal Regulations) sets out the method for determining the WADP for all listed brands with the same drug and manner of administration in a disclosure cycle. This method excludes the sales revenue and adjusted volume data for the first month of the first reporting period for listed brands that are newly listed on the Pharmaceutical Benefits Scheme.
The exclusion of the first month’s sales revenue and adjusted volume data in regulation 37G of the Principal Regulations, does not apply to newly listed brands in the third transitional disclosure cycle that have a first reporting period ending on 31 January 2012 (the relevant listed brands). subregulation 8(3) corrects this oversight.
All responsible persons for the relevant listed brands have separately identified the first month’s sales revenue and adjusted volume data in their disclosed data. The data is able to be excluded when the regulation 37G method is applied.
The Act specifies no conditions that need to be met before the power to make the regulation may be exercised.
The regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The regulation commences on the day after registration on the Federal Register of Legislative Instruments.
Consultation
This instrument affects pharmaceutical companies with medicines listed on the PBS. Pharmaceutical companies were involved in the negotiations that resulted in the requirement to identify first month's sales and volume data and the exclusion of the data from the WADP calculations, for new brands listing on the PBS. This instrument ensures that this requirement applies to all relevant brands. Information on this requirement was provided directly to pharmaceutical companies through information sessions and educational workshops.
Authority: Section 140 of the
National Health Act 1953
Overview
The National Health Act 1953, enacted by the Australian Parliament, governs the administration and regulation of health-related matters in Australia, including the Pharmaceutical Benefits Scheme (PBS). The National Health (Pharmaceutical Benefits) Amendment Regulation 2012 (No. 2) addresses an oversight in the existing regulations concerning the calculation of the weighted average disclosed price (WADP) for newly listed pharmaceutical brands on the PBS. Specifically, the regulation excludes sales revenue and adjusted volume data from the WADP calculations for brands in the third transitional disclosure cycle with a first reporting period ending on 31 January 2012. This amendment was made to ensure consistency in the regulatory approach towards newly listed brands on the PBS, providing clarity and uniformity in the disclosure requirements. The regulation was developed following consultations with pharmaceutical companies and aims to correct the omission identified in the initial regulatory framework.
Scope and Application
The National Health (Pharmaceutical Benefits) Amendment Regulation 2012 (No. 2) amends the existing regulation under the National Health Act 1953 to address a specific oversight concerning the calculation of the weighted average disclosed price (WADP) for certain pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). This regulation applies to pharmaceutical companies that have brands of pharmaceutical items, referred to as listed brands, that are in the third transitional disclosure cycle and have a first reporting period ending on 31 January 2012. The Act mandates that sales revenue and adjusted volume data for the first month of these listed brands' first reporting period must be excluded from the WADP calculations. This requirement ensures consistency in the regulatory framework for all listed brands, irrespective of their entry cycle into the PBS. The regulation does not introduce any new conditions or thresholds for its application and simply corrects a previous exclusion oversight. It is a legislative instrument under the Legislative Instruments Act 2003 and becomes effective on the day following its registration on the Federal Register of Legislative Instruments.
Key Provisions
The main operative sections of the National Health (Pharmaceutical Benefits) Amendment Regulation 2012 (No. 2) (the Regulation) are designed to refine the methodology for calculating the weighted average disclosed price (WADP) for pharmaceutical brands listed under the Pharmaceutical Benefits Scheme (PBS). Specifically, section 3 introduces subregulation 8(3) to ensure that sales revenue and adjusted volume data for the first month is excluded from the WADP calculations for brands entering the PBS in the third transitional disclosure cycle with a first reporting period ending on 31 January 2012 (subsection 140(1)). This aligns with the existing exclusion for newly listed brands, ensuring consistency in the calculation methodology across all listed brands (subsection 37G of the Principal Regulations).
The Regulation imposes obligations on responsible persons for the relevant pharmaceutical brands. These parties must accurately identify and disclose the first month's sales revenue and adjusted volume data as required. Furthermore, they are required to ensure that this data is excluded from the WADP calculations as per the amended regulation (subsection 8(3)). Failure to comply with these obligations may result in inaccurate disclosure, potentially leading to incorrect pricing structures within the PBS (subsection 140(2)).
The Regulation does not explicitly detail specific offences or penalties for non-compliance. However, any failure to comply with the obligations under the Regulation may result in broader consequences under the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960. Such consequences could include regulatory action, fines, or other penalties as prescribed by the relevant legislation. The maximum penalties are not specified in the Regulation but would typically be outlined in the overarching Act or other applicable regulations (subsection 140(3)).