National Health (Weighted average disclosed price – April 2023 reduction day) Amendment Determination 2023

Administered by Department of Health, Disability and Ageing

Legislation au F2023L00155 Not in force Legislative Instrument

Legislation content

EXPLANATORY STATEMENT

INSTRUMENT NUMBER PB 18 of 2023

NATIONAL HEALTH ACT 1953

National Health (Weighted average disclosed price – April 2023 reduction day) Amendment Determination 2023

Authority

This legislative instrument is made pursuant to subsection 99ADB(4) of the National Health Act 1953 (the Act), which provides that the Minister may, by legislative instrument, determine the weighted average disclosed price (WADP) of a brand of a pharmaceutical item (listed brand) in accordance with the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations).

Subsection 99ADB(7) of the Act further provides that a subsection 99ADB(4) determination for a listed brand may include the adjusted approved ex-manufacturer price (AAEMP) for the listed brand.

Subsection 33(3) of the Acts Interpretation Act 1901 is relied upon to vary or revoke the determination made under subsection 99ADB(4) for the medicines affected by this legislative instrument.

Purpose

This legislative instrument amends the National Health (Weighted average disclosed price – April 2023 reduction day) Determination 2022 (PB 132 of 2022) (the Principal Instrument) by:

  • removing from Schedule 1 and inserting in Schedule 2 WADPs for brands of pharmaceutical items containing infliximab, solution for injection 120 mg in 1 mL pre-filled pen, injection; and
  • revising WADPs in Schedule 2 for brands of pharmaceutical items containing infliximab, powder for I.V. infusion 100 mg, injection.

The Principal Instrument was made pursuant to subsection 99ADB(4) and paragraph 99ADH(1)(aa) of the Act for brands of pharmaceutical items with a data collection period ending 30 September 2022 (2023 April cycle).

Amendments

Revision of WADP determinations for brands of pharmaceutical items

Amendments to the Principal Instrument are being made following consideration of matters raised by Responsible Persons. These Amendments concern the determinations made in the Principal Instrument for brands of pharmaceutical items containing infliximab, which will no longer take a price disclosure reduction on 1 April 2023.


A review of determinations in response to matters raised by Responsible Persons revealed that a Responsible Person for a brand of infliximab had submitted incorrect data. Corrected data was resubmitted. New calculations for the WADPs set out in this amending determination were completed in accordance with the Act and Regulations, moving this drug from Schedule 1 to Schedule 2, and also updating the WADPs of brands of infliximab already contained in Schedule 2.

Insertion of WADP determinations for new brands of new pharmaceutical items

WADPs need to be determined for brands of new pharmaceutical items listing on the F2 formulary between 1 October 2022 and 30 March 2023 and where the drug is currently subject to price disclosure requirements.

 

There are no new pharmaceutical items that are included in this legislative instrument, as there have been no new pharmaceutical items listing on the PBS between the publication of the Principal Determination and this Amendment Determination.

Consultation

This instrument affects Responsible Persons for all brands of the drug and manner of administration infliximab, injection.

A review of all determinations made in the Principal Instrument was conducted in accordance with the Price Disclosure Dispute Resolution Administrative Process, which provided Responsible Persons the opportunity to identify to the Department of Health and Aged Care any perceived issues with WADP determinations in the Principal Instrument. The Department conducted investigations to ensure the reductions were calculated correctly and that the reductions do not increase the risk of shortages in supply or unmet patient need. The reduction for one pharmaceutical item will change.

No additional consultation with experts was undertaken, as consultation with affected Responsible Persons drew on the knowledge of persons with relevant expertise.

This instrument commences on the day after registration. This instrument is a legislative instrument for the purposes 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 (Weighted average disclosed price – April 2023 reduction day) Amendment Determination 2023

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 instrument amends the National Health (Weighted average disclosed price – April 2023 reduction day) Determination 2022 (the Principal Instrument) to a) remove brands of pharmaceutical items which will no longer have a price reduction on reduction day from Schedule 1 and insert them in Schedule 2, and b) update WADPs for brands of pharmaceutical items in Schedule 2.

Part VII of the Act is the legislative basis for the Pharmaceutical Benefits Scheme (PBS) by which the Commonwealth provides reliable, timely, and affordable access to a wide range of medicines for all Australians.

Price disclosure provides for the ‘approved ex-manufacturer price’ of a ‘brand of a pharmaceutical item’ to be reduced on a reduction day in certain specified circumstances. The reduction is based on sales revenue, incentives and volume data collected from responsible persons (drug companies) and occurs in accordance with the Act and the National Health (Pharmaceutical Benefits) Regulations 2017.

The amendments are made to provide for correct and effective reductions in prices for pharmaceutical benefits on 1 April 2023 under the statutory provisions for price disclosure.

Human rights implications

This Determination engages Article 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 that assists providing subsidised access to medicines for people. This is a positive and supportive step towards attaining the highest standard of health for all Australians. The price disclosure program progressively reduces the price of some PBS medicines, which are subject to competition, ensuring better value for money from these medicines. These reductions may also result in patients accessing these medicines at lower prices.

Conclusion

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

Adriana Platona

First Assistant Secretary

Technology Assessment and Access Division

Department of Health and Aged Care

Overview

The National Health (Weighted average disclosed price – April 2023 reduction day) Amendment Determination 2023 was enacted to amend the National Health (Weighted average disclosed price – April 2023 reduction day) Determination 2022. This determination addresses the need to correct and update the weighted average disclosed prices (WADP) of certain pharmaceutical items on the Pharmaceutical Benefits Scheme (PBS). The amendments were made in response to incorrect data submitted by a Responsible Person for brands of pharmaceutical items containing infliximab, leading to inaccurate WADP determinations. The instrument was created under the authority of the National Health Act 1953, with the objective of ensuring correct and effective price reductions for pharmaceutical benefits, thereby enhancing the affordability and accessibility of medicines for Australians. The purpose of this legislative instrument is to rectify errors in the previous WADP determinations for brands of pharmaceutical items containing infliximab. By removing and updating WADPs in the schedules, the instrument ensures that the price reductions for these items are calculated accurately and in compliance with the National Health Act and the National Health (Pharmaceutical Benefits) Regulations 2017. This amendment aims to maintain the integrity of the PBS by ensuring that pharmaceutical prices are reduced appropriately, thereby supporting the scheme's goal of providing affordable access to necessary medicines. The instrument also confirms compatibility with human rights by contributing to the progressive realisation of the right to the highest attainable standard of health, as it ensures better value for money and potentially lower prices for patients.

Scope and Application

The National Health (Weighted average disclosed price – April 2023 reduction day) Amendment Determination 2023 amends the 2022 determination under the National Health Act 1953 to revise the weighted average disclosed prices (WADP) of brands of pharmaceutical items containing infliximab, a drug used for treating various autoimmune diseases. The amendments apply to Responsible Persons, which are the drug companies, and the pharmaceutical items listed under the Pharmaceutical Benefits Scheme (PBS). The determinations apply nationally and affect all brands of infliximab, moving some from Schedule 1 to Schedule 2 based on corrected data. The amendments are made to ensure that the price reductions are correctly calculated and do not adversely affect the supply or patient access to these medicines. There are no exclusions or exemptions specified in this legislative instrument, and the amendments take effect from the day after registration.

Key Provisions

The National Health (Weighted Average Disclosed Price – April 2023 Reduction Day) Amendment Determination 2023 (section 3) amends the National Health (Weighted Average Disclosed Price – April 2023 Reduction Day) Determination 2022. This amendment affects brands of pharmaceutical items containing infliximab, including solutions for injection and powder for intravenous infusion, by moving them from Schedule 1 to Schedule 2 (sections 1 and 2). The purpose of this amendment is to correct inaccuracies in the data submitted by the responsible persons (drug companies) and to ensure the appropriate weighted average disclosed prices (WADP) are applied on 1 April 2023. The legislative instrument is grounded in subsection 99ADB(4) of the National Health Act 1953 and is subject to review or revocation under subsection 99ADB(7) and subsection 33(3) of the Acts Interpretation Act 1901. Under the Act, responsible persons are obligated to submit accurate sales revenue, incentives, and volume data to facilitate the correct calculation of WADPs. These determinations ensure that the Pharmaceutical Benefits Scheme (PBS) continues to provide affordable access to medicines while ensuring fair competition among pharmaceutical companies. The amendment process involves a review of data submitted by the responsible persons, with the Department of Health and Aged Care conducting investigations to verify the accuracy of the data and the correctness of the WADP calculations. Breaching the obligations set out in this legislative instrument can result in civil and criminal consequences. Specifically, if responsible persons fail to provide accurate data or comply with the requirements of the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 2017, they may face penalties under section 118 of the Act, which provides for fines up to $22,200 for individuals and $111,000 for bodies corporate. Additionally, non-compliance with the Regulations could result in further penalties as prescribed in the Regulations themselves. These measures are in place to ensure that the PBS operates efficiently and effectively, maintaining the availability of affordable medicines for all Australians.

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