EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 98 of 2012
NATIONAL HEALTH ACT 1953
National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Amendment Determination 2012 (No. 2)
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 1960 (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.
Purpose
This legislative instrument amends the National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Determination 2012 (PB 58 of 2012) (the Principal Instrument), which is made pursuant to subsection 99ADB(4) and paragraph 99ADH(1)(aa) of the Act and makes certain determinations relating to price disclosure for listed brands in the interim supplementary disclosure cycle with a data collection period ending 31 May 2012.
The amending instrument determines new WADPs for brands of pharmaceutical items in the interim supplementary disclosure cycle with the drug docetaxel and an injection manner of administration (MoA) and the drug risedronic acid with an oral MoA. The new WADPs are made as a result of findings of a review conducted by the Department of Health and Ageing (the Department) concerning the period of PBS volume data used in the calculations for the interim supplementary disclosure cycle.
PBS volume data used in the calculation for all drugs/MoA in the interim supplementary cycle was for the period 1 January 2011 to 31 May 2012. This covered the full possible reporting periods for the interim supplementary disclosure cycle even though some drugs/MoA in the cycle first became subject to price disclosure and started their first data collection period after 1 January 2011. It is considered that the WADP calculation should use PBS volume data as recorded by the Department for the period coinciding as far as possible with the data collection period for the relevant drug/MoA. As a result, new calculations for weighted average disclosed price were conducted with the revised data and this instrument provides for a resulting change to the WADPs for docetaxel injection and risedronic acid oral.
This issue has arisen at this time because the interim supplementary disclosure cycle is the first disclosure cycle where drugs become part of the cycle at different times, and so brands of pharmaceutical items with different drugs/MoAs start their first data collection periods at different times in the cycle.
A responsible person for a listed brand in Schedule 1 of the Principal Instrument, provided that the ‘approved ex-manufacturer price’ for the listed brand on 1 December 2012 is more than the AAEMP, will receive a price reduction for the listed brand on and from 1 December 2012 (section 99ADH of the Act).
No ‘approved price to pharmacists’ figure appears in the amending instrument (column 4 is blank) as price disclosure no longer uses ‘approved price to pharmacists’ as a base PBS price for statutory price reductions.
New brands of pioglitazone/oral and risedronic acid/oral listed on the PBS on 1 October 2012. Since there is an existing brand of these pharmaceutical items with a WADP, section 99ADHA of the Act provides for the new brands to receive the same price reduction as the existing brands.
Consultation
This instrument affects pharmaceutical companies with medicines listed on the PBS. Pharmaceutical companies have been consulted in relation to the introduction of price disclosure requirements during both the policy development and implementation of the further PBS reforms of 2010 and changes in 2012. This has occurred through meetings with both peak body organisations and individual companies. Information on the price disclosure measure has been disseminated through peak industry bodies, during regular meetings with the Price Disclosure Working Group and direct to responsible persons through information sessions and educational workshops.
Responsible persons for all listed brands with drugs/MoA that have amended WADP outcomes because of the changed period of PBS volume data used in the calculation were consulted.
This instrument commences on registration on the Federal Register of Legislative Instruments.
This Instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.