EXPLANATORY STATEMENT

National Health Act 1953

National Health (Originator Brand) Amendment Determination 2022 (No. 5)

PB 117 of 2022

Authority

This legislative instrument is made pursuant to subsection 99ADB(6B) of the National Health Act 1953 (the Act).

Purpose

This legislative instrument amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) (the Principal Instrument) to determine originator brand status for pharmaceutical items of two drug new to the PBS F2 formulary.

The Principal Instrument determines originator brands of pharmaceutical items that have a drug on the F2 formulary. On meeting certain criteria, drugs move from the F1 formulary (s85AB of the Act), or the single brand Combination Drug List (CDL), to F2. All drugs on F2 are subject to price disclosure. This instrument is necessary to implement removal of originator brand data from price disclosure calculations (originator removal) in certain circumstances as set out in the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations). Originator removal will potentially increase price disclosure related price reductions because originator brands tend to maintain higher prices than other brands.

Background

An amendment to the originator brand determination is set out in Schedule 1 of this amending instrument for the drug (pomalidomide) which moved from F1 to F2 on
1 October 2022. This delayed change is required due to a misdescription in item 2 of schedule 1 of the National Health (Originator Brand) Amendment Determination 2022 (No. 4) which made incorrect references to the originator brands of the drug, posaconazole.

In addition, an amendment to the originator brand determination is set out in Schedule 1 of this amending instrument for the drug fingolimod, that is moving from F1 to F2 on 1 December 2022. Subsection 99ADB(6C) of the Act provides that when deciding whether to determine originator brands, the Minister (or delegate) must have regard to whether the brand was on F1 or CDL when it was first determined as a brand of pharmaceutical item under subsection 85(6) of the Act.

The main criteria used to determine these brands as originators were that they were the listed brands of the drug when it was on F1.

Basis for amendments

Subsection 33(3) of the Act’s Interpretation Act 1901 is relied upon to vary or revoke the determination made under subsection 99ADB(6B) for the medicines affected by this amending instrument.

Consultation

Celgene Pty Ltd, the company affected by the originator brand determination of pomalidomide was consulted ahead of 1 October 2022 and provided no comments. In addition, Novartis Pharmaceuticals Australia Pty Ltd, the company affected by the originator brand determination of fingolimod was also consulted with no comments received. No additional consultation was considered necessary for this instrument.

This instrument commences on 1 December 2022, however the changes made by the amendment determination for pomalidomide are not factored into price disclosure calculations until after the conclusion of the current price disclosure cycle on 1 April 2023.

This instrument is a legislative instrument for the purposes of the Legislation Act 2003.

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

National Health (Originator Brand) Amendment Determination 2022 (No. 5) (PB 117 of 2022)

This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

This legislative instrument amends the National Health (Originator Brand) Determination 2015 (PB 100 of 2015) (the Principal Instrument) to determine the originator brand status for pharmaceutical items of one drug which was assigned to the Pharmaceutical Benefits Scheme (PBS) F2 formulary on 1 October 2022. In addition, this instrument also determines originator brand status for pharmaceutical items of one drug new to the PBS F2 formulary on 1 December 2022.

The instrument is necessary to implement removal of originator brand data for price disclosure calculations in certain circumstances as set out in the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations). Originator brand removal from price disclosure calculations will potentially increase PBS price reductions, as originator brands tend to maintain higher prices than other brands. Originator brand removal means that the Government price would more closely reflect the prices at which generic brands of the medicine are being sold in the market, not the prices of all brands.

The PBS provides Australians with timely, reliable and affordable access to necessary and
cost-effective medicines. The PBS operates under Part VII of the National Health Act 1953, which regulates the listing, prescribing, pricing, charging and payment of subsidies for supply of drugs and medicinal preparations as pharmaceutical benefits. The Regulations prescribe matters and set out details in relation to the operation of the PBS.

Human rights implications

This legislative instrument engages Articles 2 and 12 of the International Covenant on Economic, Social and Cultural Rights by assisting with the progressive realisation by all appropriate means of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.

The PBS is a benefits scheme that assists with providing subsidised access to medicines for people. This is a positive and supportive step towards attaining the highest standard of health for all Australians.

Determining an originator brand will improve the operation of the PBS by delivering better value for money for PBS medicines through price disclosure reductions. This will assist consumers by reducing out-of-pocket costs for some PBS medicines.

Conclusion

This legislative instrument is compatible with human rights as it advances the protection of human rights.

Nikolai Tsyganov

Acting Assistant Secretary

Pricing and PBS Policy Branch

Technology Assessment and Access Division

Department of Health and Aged Care