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.
Overview
The National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Amendment Determination 2012 (No. 2) was enacted to amend the National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Determination 2012, addressing discrepancies in the weighted average disclosed price (WADP) calculation for certain pharmaceutical items during the interim supplementary disclosure cycle. This amendment was made pursuant to subsection 99ADB(4) of the National Health Act 1953, allowing the Minister to determine the WADP of pharmaceutical brands in accordance with the National Health (Pharmaceutical Benefits) Regulations 1960. The objective of this amendment was to ensure that the WADP calculations for pharmaceutical items like docetaxel injection and risedronic acid oral align more accurately with the relevant data collection periods, reflecting the volume data as recorded by the Department of Health and Ageing for the period coinciding with the data collection period for the respective drug/method of administration. Pharmaceutical companies affected by these changes were consulted during both the policy development and implementation phases, ensuring transparency and adherence to the legislative intent.
Scope and Application
The National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Amendment Determination 2012 (No. 2) amends the National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Determination 2012 and is made under the National Health Act 1953, specifically pursuant to subsection 99ADB(4). This instrument applies to pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS), specifically to those responsible for listed brands of pharmaceutical items with an approved ex-manufacturer price higher than the adjusted approved ex-manufacturer price as of 1 December 2012. The amendment arises from a review of the data period used in calculating the weighted average disclosed price (WADP) for certain drugs, specifically docetaxel injection and risedronic acid oral. The amendment adjusts the WADPs for these drugs to better align with the data collection period of the interim supplementary disclosure cycle. The amendment applies nationally and is effective from the date of registration on the Federal Register of Legislative Instruments.
Key Provisions
The main sections of this legislation amend the National Health (Weighted average disclosed price – interim supplementary disclosure cycle) Determination 2012 (section 1). The amendment is a result of a review conducted by the Department of Health and Ageing, which found that the original data collection period used in the WADP calculation did not coincide as closely as possible with the data collection period for certain drugs and modes of administration (MoA). Therefore, new calculations for the weighted average disclosed price (WADP) have been conducted using revised data, and this instrument provides for a resulting change to the WADPs for docetaxel injection and risedronic acid oral. In accordance with section 99ADH of the Act, a responsible person for a listed brand in Schedule 1 of the Principal Instrument will receive a price reduction for the listed brand on and from 1 December 2012 if the ‘approved ex-manufacturer price’ for the listed brand on 1 December 2012 is more than the adjusted approved ex-manufacturer price (AAEMP). Additionally, new brands of pioglitazone/oral and risedronic acid/oral listed on the Pharmaceutical Benefits Scheme (PBS) on 1 October 2012 will receive the same price reduction as existing brands due to section 99ADHA of the Act.
The obligations and requirements imposed by this legislation are primarily on pharmaceutical companies with medicines listed on the PBS. These companies must comply with the new WADPs determined by this instrument and adjust their pricing accordingly. The legislation also requires that the new brands of pioglitazone/oral and risedronic acid/oral listed on the PBS on 1 October 2012 receive the same price reduction as the existing brands, as stipulated in section 99ADHA of the Act. Furthermore, responsible persons for all listed brands with drugs/MoA that have amended WADP outcomes due to the changed period of PBS volume data used in the calculation must be consulted.
The legislation does not explicitly outline specific offences, penalties, or consequences for breach. However, it is reasonable to infer that non-compliance with the amended WADPs and the requirements outlined in the Act and Regulations could lead to legal consequences. These might include financial penalties, legal action, or other regulatory measures imposed by the relevant authorities, such as the Department of Health and Ageing or the Therapeutic Goods Administration. The exact nature and severity of these consequences would depend on the specific circumstances of the breach and the applicable laws and regulations.