EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 6 OF 2012
NATIONAL HEALTH ACT 1953
National Health (Weighted average disclosed price – main disclosure cycle) Amendment Determination 2012
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) and the adjusted approved price to pharmacists (AAPTP) for the listed brand.
Purpose
This legislative instrument amends the National Health (Weighted average disclosed price – main disclosure cycle) Determination 2011 (PB 80 of 2011) (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 main disclosure cycle with a data collection period ending 30 September 2011.
The purpose of this amending instrument is to add listed brands that were listed on the Pharmaceutical Benefits Scheme (PBS) after the Principal Instrument was made but prior to the reduction day of 1 April 2012, and which have been allocated to the main disclosure cycle by regulation 37F of the Regulations (new listed brands). Brands which are no longer listed on the PBS, and a brand of an exempt item, are also removed.
The amending instrument also reflects the outcome of the administrative price disclosure dispute resolution process by determining a fresh WADP, AAEMP, and AAPTP for listed brands with the listed drug ‘Clozapine’ and an ‘oral’ manner of administration.
Only a responsible person for a listed brand appearing in Schedule 1 of the Principal Instrument will receive a price disclosure reduction on and from 1 April 2012, provided that, on that date, the ‘approved price to pharmacists’ for the listed brand is more than the determined ‘AAPTP’ for that brand.
New listed brands
The new listed brands listed on the PBS on either 1 January 2012 or 1 March 2012.
Each entry for a new listed brand, except for those with the listed drug Tacrolimus, is inserted into Schedule 1 of the Principal Instrument because these listed brands have an unadjusted price reduction that has been calculated to be at least 10%.
Entries for listed brands with the listed drug Tacrolimus are inserted into Schedule 2 of the Principal Instrument. These listed brands have an unadjusted price reduction that has been calculated to be less than 10%. Paragraph 99ADH(1)(c) of the Act provides that no price disclosure price reduction will be applied to these brands on 1 April 2012.
Exempt item
Price disclosure does not apply to listed brands of section 84AH exempt items. A new exempt item was created on 1 March 2012, so the amending instrument removes from PB 80 of 2011 the listed brand ‘Somac’ with the form ‘Sachet containing granules 40mg (as sodium sesquihydrate)’.
Clozapine oral
A dispute was lodged with the Department in relation to the WADP determined in the Principal Instrument for listed brands with the drug ‘Clozapine’ and an ‘oral’ manner of administration.
The Department, in conjunction with Australian Healthcare Associates Pty Ltd (AHA), known as the Price Disclosure Data Administrator (PDDA), and in accordance with the administrative dispute resolution process, conducted a review. As an outcome of the review, new data was received which resulted in new WADP calculations. The calculations were performed by the PDDA and were quality assured by Pitcher Partners, an independent audit and advisory firm.
A new determined WADP, AAEMP and AAPTP for these listed brands is inserted into the Principal Instrument, and into Schedule 1 of the Principal Instrument because the listed brands have an unadjusted price reduction that has been calculated to be at least 10%.
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. 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 with a listed brand that is new to the PBS 1 January 2012 or
1 March 2012 have been informed of the reductions for those brands.
Responsible persons for all listed brands with the listed drug ‘Clozapine’ and an ‘oral’ manner of administration were consulted throughout the application of the administrative price disclosure dispute resolution process and have been informed of the reduction for those brands.
This instrument commences on the day after it is registered on the Federal Register of Legislative Instruments.
This instrument is a legislative instrument for the purposes of the Legislative Instruments Act 2003.