National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7)

Administered by Department of Health, Disability and Ageing

Legislation au F2024L01102 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

NATIONAL HEALTH ACT 1953

NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2024 (No. 7)

PB 93 of 2024

 

Authority

This legislative instrument, made under section 85B of the National Health Act 1953 (the Act), amends the National Health (Price and Special Patient Contribution) Determination 2022 (PB 98 of 2022) (the Principal Determination).

Subsections 85B(2), (3) and (4) of the Act provide for the Minister to determine, respectively, determined prices, claimed prices and the circumstances in which the Commonwealth will pay a special patient contribution. The Principal Determination contains determinations of these matters.

Variation and revocation

Unless there is an express power to revoke or vary PB 98 of 2022 cited in this instrument and explanatory statement, subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to revoke or vary PB 98 of 2022.

Purpose

The Act provides for the Minister and the responsible persons to agree a price that is taken to be the appropriate maximum price of a brand of a pharmaceutical item for the purposes of Part VII of the Act (section 85AD). Section 85B of the Act applies if the Minister and the responsible person have been unable to reach an agreement on a price for the pricing quantity. Whether or not an agreement is made for the pricing quantity, section 85B also applies if the responsible person is dissatisfied with the proportional ex-manufacturer prices that will apply to other pack quantities.

Subsection 85B(2) provides that the Minister may determine, by reference to the pricing quantity of a brand of a pharmaceutical item, an amount that is taken to be the appropriate maximum price of the brand for the purposes of Part VII of the Act. This is termed the ‘Determined Price’ in this Determination.

Subsection 85B(3) provides that the Minister may determine, by reference to a pack quantity of a brand of the pharmaceutical item, an amount that is taken to be the price claimed by the responsible person for the pack quantity of the brand, for the purposes of Part VII of the Act. This is termed the ‘Claimed Price’ in this Determination.

The Determined Price is the Approved Ex-Manufacturer Price (AEMP) and is used as the basis for working out the Commonwealth price for the brand of the pharmaceutical item (section 98B of the Act); for pack quantities other than the pricing quantity, the proportional ex-manufacturer price (PEMP) is used as the basis. Approved pharmacists are entitled to receive a payment from the Commonwealth equal to the Commonwealth price less the applicable patient co-payment (section 99 of the Act).

The difference between the responsible person’s Commonwealth price for a pack quantity (i.e., the price that would be the Commonwealth price if the responsible person’s claimed price had become the approved ex-manufacturer price or the proportional ex-manufacturer price for that pack quantity) and the Commonwealth price for the pack quantity is defined in subsection 85B(5) of the Act as the special patient contribution. An approved pharmacist may charge a patient an amount equal to the special patient contribution, in addition to any other amount that may be charged (subsection 87(2A) of the Act).

Subsection 85B(4) of the Act provides that the Minister may determine the circumstances in which the Commonwealth is to pay the Special Patient Contribution for a brand. In such cases, the Commonwealth payment to the pharmacist is increased by the amount of the special patient contribution (subsection 99(2AA) of the Act) and the pharmacist may not charge the patient this amount (subsection 87(2A) of the Act). 

The purpose of making subsection 85B(4) determinations is to enable patients for whom the base-priced brands (the ones without a special patient contribution) are not suitable, to obtain the higher priced brand (the one with the special patient contribution) without the need to pay the higher price. In such cases the Commonwealth pays the special patient contribution.

The instrument (the Amendment Determination) amends the Principal Determination by removing a brand premium from two brands of two pharmaceutical items that are delisting from the PBS as requested by the responsible person.

The amendments provided by this instrument take effect on 1 September 2024.

Consultation

This Determination affects certain responsible persons with medicines listed on the PBS. Before a pharmaceutical benefit is listed on the PBS, and from time to time thereafter, price negotiations occur between the responsible person and the Minister for the purpose of reaching a price agreement for section 85AD of the Act. If the Minister and the responsible person do not agree on a price, further consultation occurs with the responsible person, and thereafter the Minister determines the price that will be the approved ex-manufacturer price for the brand. The Minister also determines the corresponding price claimed by the responsible persons which is used to calculate the special patient contribution that will apply to the brand.

For the brands Amaryl and Avapro, the claimed prices and brand premiums will be removed from the brands consistent with the request made by the responsible person to delist the brands from the PBS. No additional consultation with experts was undertaken regarding this Determination because consultation with the affected responsible person, which informed the making of this Determination, drew on the knowledge of person with relevant expertise.

A provision by provision description of the Determination is contained in the Attachment.

This Determination commences on 1 September 2024.

This Determination is a legislative instrument for the purposes of the Legislation Act 2003.


ATTACHMENT 

 

PROVISION BY PROVISION DESCRIPTION OF THE NATIONAL HEALTH (PRICE AND SPECIAL PATIENT CONTRIBUTION) AMENDMENT DETERMINATION 2024 (No .7)

(PB 93 of 2024)

Section 1   Name of Determination

This section provides that the Determination is the National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7) and may also be cited as PB 93 of 2024.

Section 2   Commencement

This section provides that the Determination commences on 1 September 2024.

Section 3   Amendment of the National Health (Price and Special Patient Contribution) Determination 2022 (PB 98 of 2022).

This section provides that Schedule 1 amends the National Health (Price and Special Patient Contribution) Determination 2022 (PB 98 of 2022).

Schedule 1 Amendments commencing 1 September 2024

Schedule 1 sets out the amendments to the Principal Determination which commence on 1 September 2024.


 

SUMMARY OF CHANGES

SCHEDULE 1

 

Deletion of brands

  • Glimepiride
    • tablet 1 mg, Amaryl

 

  • Irbesartan
    • tablet 75 mg, Avapro

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7) (PB 93 of 2024)

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, made under section 85B of the National Health Act 1953 (the Act), amends the National Health (Price and Special Patient Contribution) Determination 2022 (the Principal Determination), which provides for price determinations in relation to brands of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS) for which the Minister and the responsible persons have not been able to make a price agreement. It also provides for the circumstances in which the Commonwealth will pay the special patient contribution resulting from these price determinations. This instrument amends the Principal Determination by removing the brand premium and claimed prices for two brands of two pharmaceutical items that are delisting from the PBS as requested by the responsible person. These changes take effect on 1 September 2024. 

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 benefit scheme which assists with advancement of this human right by providing for subsidised access by patients to medicines. Deletion of the above listed brands, by way of this determination, are unlikely to result in negative financial impact on patient access, therefore ensuring their rights to social security are maintained.

Three premium-free brands remain PBS listed for glimepiride following the deletion of Amaryl. Eight premium-free brands remain PBS listed for irbesartan following the deletion of Avapro.

Eligible Australians may continue to access any one of the remaining brands for these pharmaceutical items at subsidised prices as they are flagged for substitution by pharmacists against brands with a brand premium.

It is longstanding Government policy that pharmaceutical companies are only able to charge brand price premiums where there is at least one premium-free brand of that medicine available through the PBS. Changes to brand price premiums will not limit patient access to healthcare with the availability of premium-free brands on the PBS.

All brands subsidised by the PBS are evaluated by the Therapeutic Goods Administration for quality and safety and determined to be bioequivalent, which means they are clinically equivalent and work in the same way. Removing items with brand price premiums will not result in negative financial impact for patients.  

The recommendatory role of the Pharmaceutical Benefits Advisory Committee ensures that decisions about subsidised access to medicines on the PBS are evidence-based.

Conclusion

This legislative instrument is compatible with human rights because it advances the protection of human rights.

 

Nikolai Tsyganov

 Assistant Secretary

Pricing and PBS Policy Branch

Technology Assessment and Access Division

Department of Health and Aged Care

 

 

 

 

 

 

 

Overview

The National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7) (PB 93 of 2024) was enacted under section 85B of the National Health Act 1953. This legislation amends the National Health (Price and Special Patient Contribution) Determination 2022, focusing on the removal of brand premiums and claimed prices for two pharmaceutical brands, Amaryl and Avapro, that are being delisted from the Pharmaceutical Benefits Scheme (PBS) as per the request of the responsible parties. The primary objective of this Amendment Determination is to ensure that the removal of these brands from the PBS does not negatively impact patient access to affordable medicines, maintaining the integrity of the PBS in providing subsidised access to essential medications. The determination was enacted by the Department of Health and Aged Care, ensuring that the changes align with the overarching goal of preserving the availability of affordable healthcare options for eligible Australians. This Amendment Determination addresses the gap in ensuring that the PBS continues to offer a range of affordable pharmaceutical options to patients, even when certain brands are delisted. By removing the brand premiums and claimed prices for Amaryl and Avapro, the legislation facilitates a seamless transition for patients to alternative brands that remain on the PBS. This approach is consistent with the policy objective of maintaining access to quality healthcare while ensuring the PBS remains a viable and sustainable system for providing essential medicines to the Australian public. The changes will take effect from 1 September 2024, aligning with the delisting requests and ensuring minimal disruption to patient care.

Scope and Application

The National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7) amends the National Health (Price and Special Patient Contribution) Determination 2022, governing the pricing of pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). This legislation applies to the Minister for Health and Aged Care, responsible persons (such as pharmaceutical companies), and approved pharmacists under the National Health Act 1953. The Determination regulates the maximum prices of pharmaceutical brands and the claimed prices for various pack quantities, including the circumstances under which the Commonwealth pays the special patient contribution. The changes made by this instrument specifically pertain to the removal of brand premiums for two pharmaceutical items, Amaryl and Avapro, which are being delisted from the PBS. These amendments are effective from 1 September 2024. The scope of this Act is nationwide, as it operates under the authority of the Commonwealth and affects the pricing and reimbursement mechanisms within the PBS, which is a national scheme. The legislative instrument does not include specific exclusions but relies on the existing provisions of the National Health Act 1953 and the Acts Interpretation Act 1901 for its revocation and variation powers. The Act ensures that the changes are compatible with human rights, particularly by maintaining access to affordable medicines through the continued availability of premium-free brands on the PBS.

Key Provisions

The National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7) amends the National Health (Price and Special Patient Contribution) Determination 2022. This amendment specifically removes brand premiums and claimed prices for two brands of pharmaceutical items, Amaryl and Avapro, which are being delisted from the Pharmaceutical Benefits Scheme (PBS) at the request of the responsible person. This amendment takes effect from 1 September 2024. Under the National Health Act 1953, the Minister determines prices for pharmaceutical brands when an agreement cannot be reached between the Minister and the responsible person, and also determines the circumstances under which the Commonwealth will pay the special patient contribution. The parties governed by this Act are primarily the Minister, responsible persons, and approved pharmacists. The Minister is responsible for determining the prices of pharmaceutical items listed on the PBS when an agreement cannot be reached with the responsible person. The responsible person, typically the manufacturer or marketer of the pharmaceutical item, is required to engage in price negotiations with the Minister and provide relevant information to support their price claims. Approved pharmacists, who dispense PBS-listed medicines, are entitled to receive payments from the Commonwealth equivalent to the Commonwealth price less the applicable patient co-payment. Additionally, pharmacists may charge patients an amount equal to the special patient contribution, unless the Commonwealth has determined to cover this amount. Breach of the provisions set out in this Amendment Determination may lead to civil or criminal consequences. For example, failure to comply with the price determinations could result in the Minister taking legal action against the responsible person. The Commonwealth may also seek to recover any overpayments made to approved pharmacists due to non-compliance. The Act includes provisions for penalties, including fines and imprisonment, for those found guilty of contravening the provisions of the Act or any determinations made under it. The exact penalties would depend on the nature and severity of the breach, as outlined in the National Health Act 1953. In summary, the National Health (Price and Special Patient Contribution) Amendment Determination 2024 (No. 7) modifies the Principal Determination by removing brand premiums and claimed prices for the brands Amaryl and Avapro, which are being delisted from the PBS. This change aims to align the pricing structure with the responsible person's request and ensures continued access to affordable medicines through the PBS. The Amendment Determination imposes obligations on the Minister, responsible persons, and approved pharmacists to adhere to the price determinations and payment entitlements as specified. Any non-compliance with the provisions of the Act or the Amendment Determination may result in civil or criminal consequences, including fines and imprisonment.

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