National Health (subsection 99ACB(1) taken not to have applied) Determination 2020 (PB 76 of 2020)

Administered by Department of Health, Disability and Ageing

Legislation au F2020L00973 In force Legislative Instrument

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  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

 

Overview

The National Health (subsection 99ACB(1) taken not to have applied) Determination 2020 was enacted to address the issue of price reductions for pharmaceutical items under the National Health Act 1953. This legislation, made under section 99AEI of the Act, aims to ensure that the pricing mechanisms for pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS) remain effective and fair. The problem it addresses is the potential disruption in the supply of a new brand of a pharmaceutical item, such as the MERCAPTOPURINE-LINK brand of mercaptopurine, which can impact the agreed price reductions and supply guarantees set forth in Division 3A and Division 3C of the Act. The policy objective of this determination is to maintain the integrity of the pricing and supply mechanisms for pharmaceutical items on the PBS, ensuring that patients continue to have access to affordable medicines. This determination by the Minister ensures that the PBS remains a viable and effective scheme for providing subsidised access to essential medications.

Scope and Application

The National Health (subsection 99ACB(1) taken not to have applied) Determination 2020 is an instrument made under section 99AEI of the National Health Act 1953, which applies to the pharmaceutical industry, specifically in relation to the pricing and listing of new brands of pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS). The determination addresses the MERCAPTOPURINE-LINK brand of mercaptopurine, a tablet containing mercaptopurine monohydrate 50 mg, oral. This Act applies to the Commonwealth of Australia and is concerned with ensuring that the PBS provides affordable access to medicines. The determination specifies that for the purposes of subsection 99ACB(3) of the Act, subsection 99ACB(1) is taken not to have applied to the MERCAPTOPURINE-LINK brand, effective from 1 August 2020. This has the effect of allowing a first new brand price reduction to apply to the existing brand of the pharmaceutical item mercaptopurine should a first new brand list in the future. The Act extends its application through subordinate instruments, which may include further determinations or adjustments to pharmaceutical pricing and listing criteria as necessary.

Key Provisions

The National Health (subsection 99ACB(1) taken not to have applied) Determination 2020, made under section 99AEI of the National Health Act 1953 (the Act), aims to address the consequences of the failure or inability of a responsible person to supply a guaranteed brand of a pharmaceutical item, in this case, the MERCAPTOPURINE-LINK brand of mercaptopurine, tablet containing mercaptopurine monohydrate 50 mg, oral. This determination specifies 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, effective from 1 August 2020. This decision effectively means 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. Under the Act, there are several obligations placed on parties and entities involved in the pharmaceutical supply chain. Firstly, the responsible person for new brands of pharmaceutical items, such as the manufacturer of MERCAPTOPURINE-LINK, is required to supply those brands during a specified period. If the responsible person fails to supply or is unable to supply the guaranteed brand of the guaranteed item on one or more occasions during the guaranteed period, the Minister may revoke or vary a determination under subsection 85(6) in relation to the guaranteed brand of the guaranteed item. Additionally, the Minister may 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 of the Act. The determination of the Minister's delegate to revoke the determination under subsection 85(6) in relation to MERCAPTOPURINE-LINK on 1 August 2020 has several consequences. Firstly, 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. Secondly, by determining 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, the Minister ensures 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. This ensures that the Pharmaceutical Benefits Scheme (PBS) continues to provide affordable access to essential medicines for Australians. Failure to comply with the obligations set out in the National Health Act 1953 could lead to civil or criminal penalties, depending on the severity and intent of the breach. For example, under section 99AEH of the Act, the Minister may revoke or vary a determination in relation to the guaranteed brand of the guaranteed item if the responsible person fails to supply or is unable to supply the guaranteed brand of the guaranteed item on one or more occasions during the guaranteed period. This could result in the delisting of the pharmaceutical item from the PBS, which could have significant consequences for patients who rely on the item for their health and wellbeing. Additionally, under section 99AEI of the Act, the Minister may determine 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 delisted brand of the existing item, which could result in increased prices for the existing brand of the pharmaceutical item. These consequences highlight the importance of compliance with the Act and the need for responsible persons to ensure that they are able to supply guaranteed brands of pharmaceutical items during the guaranteed period.

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