EXPLANATORY STATEMENT
INSTRUMENT NUMBER PB 18 of 2013
NATIONAL HEALTH ACT 1953
National Health (Weighted average disclosure price – main disclosure cycle) Amendment Determination 2013 (No. 1)
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 disclosure price – main disclosure cycle) Determination 2012 (PB 107 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 main disclosure cycle with a data collection period ending 30 September 2012.
The purpose of this amending instrument is to add listed brands of new pharmaceutical items that were listed on the Pharmaceutical Benefits Scheme (PBS) after the Principal Instrument was made, but prior to the reduction day of 1 April 2013, and which have been allocated to the main disclosure cycle by regulation 37F of the Regulations (new listed brands of new pharmaceutical items).
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 April 2013 if at least one existing brand of the same pharmaceutical item is in Schedule 1.
This amending instrument also amends the entry for two brands of pharmaceutical items included in the Principal Instrument where the WADP (and consequently for one brand the AAEMP) were unintentionally omitted.
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 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 brands of new pharmaceutical items containing the drugs and manners of administration (MoA) morphine injection and macrogol 3350 oral that are added to PB 107 of 2012 by this instrument were listed on the PBS on 22 January 2013 and 1 March 2013 respectively.
Each new entry for the brands containing the drugs morphine and macrogol 3350 is inserted into Schedule 2 of the Principal Instrument because these listed brands do not have an unadjusted price reduction that has been calculated to be at least 10%.
Listed brands with no WADP amount in the Principal Instrument
Two brands of pharmaceutical items mentioned in the Principal Instrument had no WADP determined in that instrument.
The entry in the Principal Instrument for the Vita-B12 brand containing the drug and MoA hydroxocobalamin injection is in Schedule 1 of the Principal Instrument. This amending instrument inserts the WADP for this brand of pharmaceutical item in the appropriate column, and the same amount is also determined as the AAEMP for the brand. This listed brand has an unadjusted price reduction that has been calculated to be at least 10%.
The entry in the Principal Instrument for the VitA-POS brand containing the drug and MoA paraffin application to the eye is in Schedule 2 of the Principal Instrument. This amending instrument inserts the WADP for this brand of pharmaceutical item in the appropriate column. This listed brand does not 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.
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 disclosure price – main disclosure cycle) Amendment Determination 2013 (No. 1) amends the National Health (Weighted average disclosure price – main disclosure cycle) Determination 2012. This legislative instrument is enacted under the National Health Act 1953, administered by the Australian Parliament, and aims to address gaps in the disclosure of pharmaceutical prices within the Pharmaceutical Benefits Scheme (PBS). Specifically, it rectifies omissions and updates the weighted average disclosure price (WADP) and adjusted approved ex-manufacturer price (AAEMP) for certain pharmaceutical brands that were listed on the PBS after the original determination but before the specified reduction date of 1 April 2013. This includes adding new listed brands of new pharmaceutical items and correcting previously omitted WADP and AAEMP entries for certain brands. The policy objective is to ensure accurate and timely price disclosure for listed brands, enhancing transparency and regulatory compliance within the PBS.
Scope and Application
The National Health (Weighted average disclosure price – main disclosure cycle) Amendment Determination 2013 (No. 1) amends the National Health (Weighted average disclosure price – main disclosure cycle) Determination 2012. This legislation applies to pharmaceutical companies with medicines listed on the Pharmaceutical Benefits Scheme (PBS) and is made under the authority of subsection 99ADB(4) of the National Health Act 1953. This Act applies on a Commonwealth level, regulating the weighted average disclosed price (WADP) of brands of pharmaceutical items listed on the PBS. The purpose of the amending instrument is to include new pharmaceutical items that were listed on the PBS after the Principal Instrument was made, but before the reduction day of 1 April 2013, and to correct unintentional omissions of WADP and adjusted approved ex-manufacturer price (AAEMP) for certain brands in the Principal Instrument. The amending instrument does not extend to new listed brands of existing pharmaceutical items that will receive a flow-on reduction under section 99ADHA of the Act on 1 April 2013. The instrument adds two brands of pharmaceutical items containing morphine injection and macrogol 3350 oral to the Principal Instrument, and corrects the omission of WADP and AAEMP for Vita-B12 and VitA-POS brands of pharmaceutical items. The amendments commence on the day after the instrument is registered on the Federal Register of Legislative Instruments.
Key Provisions
The primary sections of the National Health (Weighted average disclosure price – main disclosure cycle) Amendment Determination 2013 (No. 1) (the Determination) are contained in Schedule 1 and Schedule 2, where it amends the previously established National Health (Weighted average disclosure price – main disclosure cycle) Determination 2012 (the Principal Instrument). This Determination introduces new listed brands of new pharmaceutical items into the Principal Instrument, specifically brands that were listed on the Pharmaceutical Benefits Scheme (PBS) after the Principal Instrument was made but before the reduction day of 1 April 2013. The new brands added pertain to the drugs and manners of administration (MoA) morphine injection and macrogol 3350 oral, listed on the PBS on 22 January 2013 and 1 March 2013 respectively. Additionally, the Determination corrects entries for two brands of pharmaceutical items in the Principal Instrument where the weighted average disclosed price (WADP) and the adjusted approved ex-manufacturer price (AAEMP) were unintentionally omitted. These brands are hydroxocobalamin injection (Vita-B12) and paraffin application to the eye (VitA-POS).
The obligations imposed by this Determination primarily concern pharmaceutical companies with medicines listed on the PBS. These companies are responsible for ensuring that their listed brands comply with the amended WADP and AAEMP as stipulated in the Determination. Specifically, they must disclose the corrected WADP and AAEMP as determined by this Amendment, and ensure that any subsequent price disclosure reductions are applied correctly. The amended WADP and AAEMP values must be adhered to for the purposes of compliance with the National Health (Pharmaceutical Benefits) Regulations 1960.
There are no explicit offences or penalties outlined in the Determination itself; however, non-compliance with the amended WADP and AAEMP, as well as failure to adhere to the price disclosure requirements, could result in civil or administrative consequences under the broader provisions of the National Health Act 1953 and the Regulations. Pharmaceutical companies may face actions under the Act for providing inaccurate or misleading price information, which could lead to financial penalties or other sanctions as determined by the relevant authorities. The National Health (Pharmaceutical Benefits) Regulations 1960 outline various civil and criminal penalties for non-compliance with the provisions of the Act, including fines and, in severe cases, imprisonment. The exact penalties would depend on the specific nature and severity of the breach.