EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 38 of 2013
NATIONAL HEALTH ACT 1953
National Health (Weighted average disclosed price – supplementary disclosure cycle A) Amendment Determination 2013 (No. 1)
Authority
This legislative instrument is made pursuant to subsection 99ADB(4) and paragraph 99ADH(1)(aa) of the National Health Act 1953 (the Act), which provide 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) and that the Minister may determine a reduction day for a listed brand with a WADP determined.
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 – supplementary disclosure cycle A) Determination 2013 (PB 24 of 2013) (the Principal Instrument), which was made pursuant to subsection 99ADB(4) and paragraph 99ADH(1)(aa) of the Act and makes certain determinations relating to price disclosure for a listed brand in the supplementary disclosure cycle A with a data collection period ending 31 January 2013.
The purpose of this amending instrument is to add a listed brand of a new pharmaceutical item that was listed on the Pharmaceutical Benefits Scheme (PBS) after the Principal Instrument was made, but prior to the reduction day of 1 August 2013, and which has been allocated to the supplementary disclosure cycle A by regulation 37F of the Regulations (new listed brand of new pharmaceutical item). The same reduction day is determined for the listed brand in this Instrument as for listed brands in the Principal Instrument (1 August 2013).
New listed brands of existing pharmaceutical items that listed on the PBS after the Principal Instrument was made but prior to the reduction day are not included in this amending instrument as they will receive a flow-on reduction under section 99ADHA of the Act on 1 August 2013 if at least one existing brand of the same pharmaceutical item is in Schedule 1of the principal instrument.
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.
New listed brands
The new listed brand of new pharmaceutical item containing orally administered temozolomide that is added to PB 24 of 2013 by this instrument was listed on the PBS on 1 May 2013. The new pharmaceutical item is the 180mg capsule of orally administered temozolomide.
The new entry for the brand containing the drug temozolomide is inserted into Schedule 1 of the Principal Instrument because the listed brand has an unadjusted price reduction that has been calculated to be at least 10%.
A further new brand of the 180mg capsule of orally administered temozolomide pharmaceutical item was listed on 1 June 2013. It will receive the flow-on reduction under section 99ADHA of the Act on 1 August 2013.
Consultation
This instrument affects pharmaceutical companies with medicines containing the orally administered 180mg capsule form of the drug temozolomide listed on the PBS. It is machinery in nature and does not substantially alter existing arrangements. The instrument is required to apply the 1 August 2013 price disclosure reduction for PBS listed medicines containing orally administered temozolomide to newly listed brands of a new pharmaceutical item containing orally administered temozolomide. The price disclosure reduction for orally administered temozolomide was notified to all pharmaceutical companies with PBS listed medicines by email on 26 April 2013 and also on the pbs.gov.au website.
Further, the current provisions under the Act that apply the orally administered temozolomide price disclosure reduction to brands of newly listed pharmaceutical items came into effect on October 2012. Pharmaceutical companies were consulted prior to the introduction of the amendments in early 2012 through meetings with peak body organisations. The peak bodies consulted included Medicines Australia, the Generic Medicines Industry Association of Australia, The Pharmacy Guild of Australia, the National Pharmaceutical Services Association, Australian Pharmaceutical Industries, and Consumers Health Forum. Educational and information meetings were also conducted for individual companies prior to the October 2012 commencement of the relevant provisions in the Act.
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 – supplementary disclosure cycle A) Amendment Determination 2013 (No. 1) was enacted under the authority of the National Health Act 1953 and is designed to address the need for supplementary price disclosures for certain pharmaceutical items listed on the Pharmaceutical Benefits Scheme (PBS). This amending instrument was introduced by the Minister for Health to ensure that newly listed brands of specific pharmaceutical items receive appropriate price reductions in accordance with the PBS framework. The determination specifically adds a listed brand of a new pharmaceutical item that was listed on the PBS after the initial determination but before the reduction day of 1 August 2013. This amendment ensures that the new listed brand is included in the supplementary disclosure cycle A, thereby applying the same reduction day as other listed brands in the principal instrument. The objective is to maintain consistency in price reductions for pharmaceutical items listed on the PBS, ensuring fair and equitable pricing practices.
Scope and Application
The National Health (Weighted average disclosed price – supplementary disclosure cycle A) Amendment Determination 2013 (No. 1) applies to pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS) that contain the orally administered 180mg capsule form of the drug temozolomide. This instrument specifically pertains to a new listed brand of a new pharmaceutical item containing orally administered temozolomide that was listed on the PBS after the initial determination but before the reduction day of 1 August 2013. The amendment adjusts the weighted average disclosed price (WADP) for this particular brand, aligning it with the same reduction day as other listed brands in the supplementary disclosure cycle A. The purpose of this amendment is to ensure that newly listed brands of new pharmaceutical items receive a price disclosure reduction if their approved ex-manufacturer price exceeds the adjusted approved ex-manufacturer price as of the specified reduction day. The instrument is machinery in nature, designed to apply existing provisions under the Act to newly listed brands without substantially altering existing arrangements.
Key Provisions
The National Health (Weighted average disclosed price – supplementary disclosure cycle A) Amendment Determination 2013 (No. 1) (the Amendment Determination) primarily amends the National Health (Weighted average disclosed price – supplementary disclosure cycle A) Determination 2013 (PB 24 of 2013) (the Principal Instrument). Section 2 of the Amendment Determination adds a new listed brand of a new pharmaceutical item containing orally administered temozolomide to the Principal Instrument. This new brand was listed on the Pharmaceutical Benefits Scheme (PBS) on 1 May 2013, and it has been allocated to the supplementary disclosure cycle A. This addition is made in accordance with the National Health Act 1953 (the Act) and the National Health (Pharmaceutical Benefits) Regulations 1960 (the Regulations). The Amendment Determination also sets a reduction day for the newly added brand, which is the same as the reduction day for other listed brands in the Principal Instrument, being 1 August 2013.
The Amendment Determination imposes obligations on pharmaceutical companies that have brands listed on the PBS. Specifically, these companies must ensure that their listed brands comply with the requirements set out in the Amendment Determination and the Principal Instrument. This includes ensuring that the weighted average disclosed price (WADP) of their listed brands is correctly disclosed as per the regulations. Additionally, these companies must be aware of the reduction day and prepare for the price disclosure reduction that will apply from 1 August 2013. Pharmaceutical companies must also ensure that their listed brands are correctly inserted into Schedule 1 of the Principal Instrument if they meet the criteria for an unadjusted price reduction of at least 10%.
Breach of the provisions in the Amendment Determination can lead to civil or criminal consequences. Under the Act, the Minister may take action against pharmaceutical companies that fail to comply with the price disclosure requirements. The penalties for non-compliance can be significant, including fines and potential imprisonment. The exact penalties are not specified in the Amendment Determination but are likely to be consistent with the penalties outlined in the Act and Regulations for similar breaches. The Minister has the authority to enforce these penalties to ensure compliance with the legislation. The Amendment Determination ensures that the price disclosure requirements are applied consistently and fairly across all listed brands of pharmaceutical items on the PBS.
In summary, the Amendment Determination adds a new listed brand of a new pharmaceutical item to the Principal Instrument, sets a reduction day for this brand, and imposes obligations on pharmaceutical companies to comply with the price disclosure requirements. Non-compliance with these requirements can result in significant civil and criminal penalties. The Amendment Determination is designed to ensure that the price disclosure requirements are applied consistently and fairly across all listed brands of pharmaceutical items on the PBS.