National Health (Weighted average disclosed price - second transitional disclosure cycle) Amendment Determination 2012 (No. PB 7 of 2012)

Overview

The National Health (Weighted average disclosed price – second transitional disclosure cycle) Amendment Determination 2012 was enacted to amend the previous determination made in 2011 under the National Health Act 1953. This amendment was introduced to address the need for additional price disclosure requirements for listed brands that were added to the Pharmaceutical Benefits Scheme (PBS) after the initial determination but before the specified reduction date of 1 April 2012. The amendment was made by the Minister under the authority granted by the Act and aims to ensure that only responsible persons for listed brands appearing in Schedule 1 of the Principal Instrument will receive a price disclosure reduction on and from 1 April 2012, provided the 'approved price to pharmacists' for the listed brand exceeds the determined 'adjusted approved price to pharmacists'. The determination was developed and implemented with extensive consultation with pharmaceutical companies and peak industry bodies, ensuring that the measures were well-communicated and understood by those affected. The amendment will come into effect on the day after it is registered on the Federal Register of Legislative Instruments, operating as a legislative instrument under the Legislative Instruments Act 2003.

Scope and Application

The National Health (Weighted average disclosed price – second transitional disclosure cycle) Amendment Determination 2012 applies to pharmaceutical companies that have medicines listed on the Pharmaceutical Benefits Scheme (PBS). Specifically, it concerns the responsible persons for listed brands of pharmaceutical items that have been added to the PBS after the initial determination in 2011 and before the reduction day of 1 April 2012, which have been assigned to the second transitional disclosure cycle. The Act amends the National Health (Weighted average disclosed price – second transitional disclosure cycle) Determination 2011 to include these newly listed brands and specifies the adjusted approved ex-manufacturer price and the adjusted approved price to pharmacists for these brands. This legislation is applicable across Australia, under the jurisdiction of the Commonwealth, and is enforced through the National Health Act 1953 and the National Health (Pharmaceutical Benefits) Regulations 1960. The instrument also provides for price disclosure reductions for listed brands where the approved price to pharmacists exceeds the adjusted approved price to pharmacists determined under the Act.

Key Provisions

The National Health (Weighted average disclosed price – second transitional disclosure cycle) Amendment Determination 2012 (the Amendment Determination) is made under the authority of the National Health Act 1953 (the Act) and the National Health (Pharmaceutical Benefits) Regulations 1960 (the Regulations). This instrument amends the National Health (Weighted average disclosed price – second transitional disclosure cycle) Determination 2011 (the Principal Instrument) by adding new listed brands to the schedule, which were listed on the Pharmaceutical Benefits Scheme (PBS) after the Principal Instrument was made but before the reduction day of 1 April 2012. These new listed brands, which have been allocated to the second transitional disclosure cycle, are now subject to the price disclosure requirements set out in the Principal Instrument (sections 3 and 4). The Amendment Determination imposes obligations on responsible persons for listed brands appearing in Schedule 1 of the Principal Instrument. Specifically, it requires these responsible persons to disclose the weighted average disclosed price (WADP) of their pharmaceutical brands during the second transitional disclosure cycle. This disclosure must be made in accordance with the National Health (Pharmaceutical Benefits) Regulations 1960, and the price disclosure must meet the requirements set out in the Principal Instrument and the Amendment Determination. The purpose of these requirements is to ensure that the prices of pharmaceutical items listed on the PBS are transparent and that consumers have access to this information. Responsible persons must ensure that the approved price to pharmacists for their listed brands does not exceed the adjusted approved price to pharmacists (AAPTP) determined under the Amendment Determination. Failure to comply with the obligations and requirements set out in the Amendment Determination may result in civil or criminal consequences. Although the Amendment Determination itself does not specify particular offences or penalties, non-compliance with the National Health Act 1953 or the National Health (Pharmaceutical Benefits) Regulations 1960 can lead to penalties. Under section 13 of the Act, an individual or entity found to be in breach of the Act or Regulations may be liable to a pecuniary penalty of up to $22,200 for a corporation and up to $4,440 for an individual. Furthermore, under section 12HA of the Act, a person who is found guilty of an offence against the Act can be subject to imprisonment for up to two years, a fine, or both. It is important for responsible persons to comply with the requirements to avoid these potential consequences.