EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 37 of 2013
NATIONAL HEALTH ACT 1953
National Health (Weighted average disclosed price – main disclosure cycle) Amendment Determination 2013 (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 – main disclosure cycle) Determination 2013(No. 1) (PB 26 of 2013) (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 2012.
The purpose of this amending instrument is to amend the WADP and the AAEMP for two brands of pharmaceutical items that were incorrect in the Principal Instrument because an out of date quantity was used for one brand of pharmaceutical item with the drug etoposide administered by injection when working out the WADP for all brands with that drug and manner of administration. The new WADP for the Etoposide Ebewe brand is made for the corrected quantity. The very small adjustment to the WADP for the Etopophos brand was caused by the correction to the quantity used for the other brand.
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 August 2013, provided that, on that date, the ‘approved ex-manufacturer price’ for the listed brand is more than the determined ‘AAEMP’ for that brand.
Schedule 1 of the Principal Instrument includes a WADP and AAEMP for the two affected brands of pharmaceutical items. This amending instrument inserts the revised WADPs in the appropriate column, and the same amount is also determined as the AAEMP for the brands. These listed brands are included in Schedule 1 of the Principal Instrument because they have an unadjusted price reduction that has been calculated to be at least 10%.
Consultation
This instrument affects two pharmaceutical companies that are responsible persons for brands of two pharmaceutical items containing the drug etoposide administered by injection, which are due for price disclosure reduction on 1 August 2013.
The Department wrote to the two affected companies on 28 May 2013, and telephoned the companies to discuss the issue. Neither company indicated concern about the change to the WADP and AAEMP which flowed from correction to the quantity used in calculations for one of the medicines.
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.
Overview
The National Health (Weighted Average Disclosed Price – Main Disclosure Cycle) Amendment Determination 2013 (No. 2) was enacted to address inaccuracies in the previously disclosed weighted average disclosed prices (WADP) for certain pharmaceutical brands. This amendment was made pursuant to the National Health Act 1953 and serves to correct the weighted average disclosed price and the adjusted approved ex-manufacturer price for two brands of pharmaceutical items listed in the main disclosure cycle, specifically for those brands containing the drug etoposide administered by injection. The determination was prompted by the discovery that an outdated quantity was used in the initial calculations for one of the brands, leading to incorrect WADPs. The objective of this amendment is to ensure that the correct WADP and AAEMP are applied, thereby providing an accurate basis for price disclosure reductions, which will be effective from 1 August 2013 for responsible persons whose approved ex-manufacturer price exceeds the determined AAEMP for the specified brands.
Scope and Application
The National Health (Weighted average disclosed price – main disclosure cycle) Amendment Determination 2013 (No. 2) amends the National Health (Weighted average disclosed price – main disclosure cycle) Determination 2013 (No. 1), which was made under the National Health Act 1953. This instrument corrects the weighted average disclosed price (WADP) and the adjusted approved ex-manufacturer price (AAEMP) for two brands of pharmaceutical items that were incorrectly calculated in the original determination due to an outdated quantity being used in the calculations. The amendment applies to the Etoposide Ebewe brand for which the corrected quantity was used to determine the WADP and the Etopophos brand, which was affected by the correction to the quantity used for the other brand. This legislative instrument specifically impacts the responsible persons for these listed brands, which appear in Schedule 1 of the Principal Instrument, as they will receive a price disclosure reduction from 1 August 2013 if the approved ex-manufacturer price for the listed brand exceeds the determined AAEMP on that date. The instrument is applicable on the day after its registration on the Federal Register of Legislative Instruments.
Key Provisions
The primary operative sections of the National Health (Weighted average disclosed price – main disclosure cycle) Amendment Determination 2013 (No. 2) (the Amendment Determination) are sections 1 and 2, which amend the Weighted Average Disclosed Price (WADP) and the Adjusted Approved Ex-Manufacturer Price (AAEMP) for two brands of pharmaceutical items. These sections correct errors in the initial determination by adjusting the quantities used in the calculations, specifically for the Etoposide Ebewe brand and the Etopophos brand. The Amendment Determination provides a corrected WADP for the Etoposide Ebewe brand and a minor adjustment to the WADP for the Etopophos brand, reflecting the corrected quantity for the former. These adjustments are intended to ensure that the prices disclosed are accurate and reflect the correct quantities used.
The obligations and requirements imposed by the Amendment Determination on the parties or entities it governs include ensuring that the corrected WADP and AAEMP figures are adhered to in any future price disclosure cycles. Specifically, the responsible persons for the listed brands in Schedule 1 of the Principal Instrument, which includes the affected pharmaceutical brands, must comply with the revised figures. Additionally, these responsible persons must ensure that the approved ex-manufacturer price (AEEMP) for the listed brands is more than the determined AAEMP for that brand to qualify for a price disclosure reduction as of 1 August 2013.
There are no explicit offences, penalties, or civil/criminal consequences stated within the Amendment Determination itself. However, failure to comply with the correct WADP and AAEMP as determined by this Amendment Determination could potentially lead to non-compliance with the broader National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960. While the Amendment Determination does not specify penalties, any breaches of the broader regulations could attract civil or criminal penalties as outlined in the principal legislation, including fines and other sanctions. These penalties would be in accordance with the respective sections of the National Health Act 1953 and the Regulations, which may include maximum fines as stipulated by those provisions.