EXPLANATORY STATEMENT
National Health Act 1953
National Health (subsection 99ACB(1) taken not to have applied) Determination 2020
PB 76 of 2020
Authority
This instrument is made under section 99AEI of the National Health Act 1953 (the Act).
Purpose
This instrument determines that for the purposes of subsection 99ACB(3) of the Act, subsection 99ACB(1) of the Act is taken not to have applied to the MERCAPTOPURINE-LINK brand of mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral.
Background
Division 3A of the Act requires there to be at least a 25% price reduction in the price of a new brand of a pharmaceutical item (other than a combination item) when it lists. The listing of the new brand of the pharmaceutical item also provides a trigger for price reductions to occur for other existing brands of the pharmaceutical item. On 1 April 2020, MERCAPTOPURINE-LINK was a new brand for section 99ACB of the Act, triggering a price reduction for the existing brand of the pharmaceutical item mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral.
Division 3C of the Act requires the responsible person for new brands of pharmaceutical items to supply those brands of pharmaceutical items during a specified period. On 1 April 2020 MERCAPTOPURINE-LINK was a guaranteed brand of a guaranteed item under section 99AEC of the Act.
Under section 99AEH of the Act the Minister may by legislative instrument, revoke or vary a determination under subsection 85(6) (i.e., delist a brand) in relation to the guaranteed brand of the guaranteed item, if during the guaranteed period for the guaranteed brand of a guaranteed item, the responsible person for the guaranteed brand of the guaranteed item failed to supply, or was unable to supply, the guaranteed brand of the guaranteed item on one or more occasions. The Minister’s delegate revoked the determination under subsection 85(6) in relation to MERCAPTOPURINE-LINK on this basis, effective from 1 August 2020.
Under section 99AEI of the Act if the Minister exercises the power referred to in section 99AEH (i.e., delists a brand for failure or being unable to supply), the Minister may, under section 85AD, increase the agreed price for a brand of pharmaceutical item that has an approved ex‑manufacturer price (AEMP) that was reduced because the delisted brand was a new brand for section 99ACB. On 1 August 2020, the AEMP for the existing brand of mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral will increase through a price agreement made by the Minister’s delegate under section 85AD of the Act.
Further, under section 99AEI of the Act, the Minister may also, by legislative instrument, determine that if subsection 99ACB(1) of the Act applied to the delisted brand of the existing item—for the purposes of subsection 99ACB(3) of the Act, subsection 99ACB(1) of the Act is taken not to have applied to the delisted brand of the existing item. Section 99ACB(1) applied to MERCAPTOPURINE-LINK on 1 April 2020.
This Instrument is made under section 99AEI of the Act and determines that section 99ACB(1) is taken not to have applied to MERCAPTOPURINE-LINK brand of mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral, effective from 1 August 2020. This has the effect that a first new brand price reduction will apply to mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral, should a first new brand list in the future.
Consultation
The responsible persons (manufacturers) for the delisted brand, MERCAPTOPURINE-LINK, and the existing brand of the pharmaceutical item mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral, were consulted about the proposed determination that for the purposes of subsection 99ACB(3) of the Act, subsection 99ACB(1) of the Act is taken not to have applied to the MERCAPTOPURINE-LINK brand of mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral. No additional consultations with experts was undertaken regarding this determination because consultation with the affected responsible persons drew on the knowledge of persons with relevant expertise.
Commencement
This Instrument commences on 1 August 2020.
This Instrument constitutes a legislative instrument for the purpose 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 (subsection 99ACB(1) taken not to have applied) Determination 2020
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 is made pursuant to section 99AEI of the National Health Act 1953 (the Act), which relates to consequences for other brands should the responsible person for a guaranteed brand of a guaranteed item fail to supply, or be unable to supply, the guaranteed brand of the guaranteed item on one or more occasions during the guaranteed period.
This instrument determines that for the purposes of subsection 99ACB(3) of the Act, subsection 99ACB(1) of the Act is taken not to have applied to the MERCAPTOPURINE-LINK brand of mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral. This has the effect that a first new brand price reduction will apply to mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral, should a first new brand list in the future.
Human rights implications
This Legislative Instrument engages Article 2 and 12 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) 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. The recommendatory role of the Pharmaceutical Benefits Advisory Committee (PBAC) ensures that decisions about subsidised access to medicines on the PBS are evidence-based.
Conclusion
This Legislative Instrument is compatible with human rights. Human rights continue to be protected by retaining on the PBS clinically important medicines and placing them in formularies that ensure the most cost effective pricing for supply of each medicine to Australians.
Nikolai Tsyganov
Acting Assistant Secretary
Pricing and PBS Policy Branch
Technology Assessment and Access Division
Department of Health