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Schedule 1—Price reductions for new brands of pharmaceutical items

Schedule 1 Price reductions for new brands of pharmaceutical items

Part 1 25% price reduction

National Health Act 1953

1  Subsection 84(1)

Repeal the following definitions:

                     (a)  definition of subject to a 12.5% price reduction ;

                     (b)  definition of subject to a 16% price reduction .

2  Subsection 84(1)

Insert:

12.5% price reduction : see subsection 99ACA(2).

16% price reduction : see subsection 99ACA(2A).

25% price reduction : see subsection 99ACA(2B).

3  Section 99AC

Omit “16% price reduction” (wherever occurring), substitute “25% price reduction”.

4  Subsections 99ACA(2) and (2A)

Repeal the subsections, substitute:

             (2)  A listed component drug contained in a drug in a combination item has been subject to a 12.5% price reduction if a pharmaceutical item that has:

                     (a)  the listed component drug; and

                     (b)  the same manner of administration as the combination item;

is in a class of pharmaceutical items to which a 12.5% administrative price reduction has applied.

          (2A)  A listed component drug contained in a drug in a combination item has been subject to a 16% price reduction if a pharmaceutical item that has:

                     (a)  the listed component drug; and

                     (b)  the same manner of administration as the combination item;

is in a class of pharmaceutical items to which a 16% administrative price reduction has applied.

          (2B)  A listed component drug contained in a drug in a combination item has been subject to a 25% price reduction if a pharmaceutical item that has:

                     (a)  the listed component drug; and

                     (b)  the same manner of administration as the combination item;

is in a class of pharmaceutical items to which a 25% administrative price reduction has applied.

5  Subdivision B of Division 3A of Part VII (heading)

Repeal the heading, substitute:

Subdivision B 25% price reductions for new brands of pharmaceutical items that are not combination items

6  Section 99ACB (heading)

Repeal the heading, substitute:

99ACB   25% price reduction for new brands of pharmaceutical items that are not combination items

7  Paragraphs 99ACB(2)(a), (b) and (c)

Omit “or 16%”, substitute “, 16% or 25%”.

8  At the end of subsection 99ACB(2)

Add:

               ; or (d)  on the day before the determination day:

                              (i)  the approved ex-manufacturer price of a listed brand of the existing item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—the original approved ex-manufacturer price of the first listed brand of the existing item;

                            has, by virtue of previous price reductions, been reduced by 40% or more.

9  Subparagraph 99ACB(3)(a)(ii)

Omit “item 1 of the table in section 99ACF”, substitute “section 99ACH”.

10  At the end of paragraph 99ACB(3)(a)

Add:

                            (iii)  subsection 99ACF(2AB) or (2AC);

11  Subsection 99ACB(4) (heading)

Repeal the heading, substitute:

25% price reduction

12  Subsection 99ACB(5)

Repeal the subsection, substitute:

          (4A)  If, on the day before the determination day:

                     (a)  the approved ex-manufacturer price of a listed brand of the existing item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—the original approved ex-manufacturer price of the first listed brand of the existing item;

has, by virtue of previous price reductions, been reduced by:

                     (c)  15% or less, subsection (5) applies; and

                     (d)  more than 15% but less than 40%, subsection (5A) applies.

Note:          If previous price reductions have been 40% or more, see paragraph (2)(d).

             (5)  Subject to subsections (6) and (6A), the agreed price of the new brand of the trigger item that comes into force on the determination day must not exceed the approved ex-manufacturer price, on the day before the determination day, of the existing brand of the existing item, reduced by 25%.

          (5A)  Subject to subsections (6) and (6B), the agreed price of the new brand of the trigger item that comes into force on the determination day must not exceed:

                     (a)  60% of the approved ex-manufacturer price of a listed brand of the existing item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—60% of the original approved ex-manufacturer price of the first listed brand of the existing item.

13  Subsection 99ACB(6)

Omit “subsection (5)”, substitute “subsections (5) and (5A)”.

14  After subsection 99ACB(6)

Insert:

Ministerial discretion not to apply, or to reduce, statutory price reduction

          (6A)  For the purposes of subsection (5), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price mentioned in that subsection is to be worked out using a lower percentage (including zero %) specified in the determination.

          (6B)  For the purposes of paragraphs (5A)(a) and (b), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price mentioned in those paragraphs is to be worked out using a higher percentage specified in the determination.

          (6C)  In making a determination under subsection (6A) or (6B):

                     (a)  the Minister must take into account what the agreed price of the new brand of the trigger item would otherwise be under this section in relation to the particular determination day if a determination were not made; and

                     (b)  the Minister may take into account any other matter that the Minister considers relevant.

          (6D)  If the Minister makes a determination under subsection (6A) or (6B), the agreed price of the new brand of the trigger item is not to be further reduced under this section on any determination day that occurs after the determination day specified in the determination made under the relevant subsection.

15  At the end of subsection 99ACC(4A)

Add:

             ; and (e)  to the extent that the single brand of the combination item contains one or more component drugs that are not listed component drugs—must take into account the matters mentioned in paragraph (d) in relation to each component drug that is not a listed component drug (the non-listed component drug ) as if:

                              (i)  in the case of one non-listed component drug—a declaration under subsection 85(2) was in force in relation to the non-listed component drug on the day the declaration under subsection 85(2) came into force in relation to the listed component drug, or if there is more than one listed component drug, the first listed component drug, of the single brand of the combination item; and

                             (ii)  in the case of more than one component drug that is a non-listed component drug—a declaration under subsection 85(2) was in force in relation to each non-listed component drug on the day the declaration under subsection 85(2) came into force in relation to the listed component drug, or if there is more than one listed component drug, the first listed component drug, of the single brand of the combination item.

16  Subsection 99ACC(4B)

Repeal the subsection, substitute:

          (4B)  If subsection (4) does not apply, then, in agreeing the new price of the single brand of the combination item, the Minister must take into account:

                     (a)  in relation to the listed component drug, or each listed component drug, that became subject to statutory price reduction:

                              (i)  the approved ex-manufacturer price, on the reduction day, of each brand of a pharmaceutical item that has the drug that is the listed component drug; and

                             (ii)  the quantity of the listed component drug contained in the combination item; and

                     (b)  to the extent that the single brand of the combination item contains one or more component drugs that are not listed component drugs—the matters mentioned in paragraph (a) in relation to each component drug that is not a listed component drug as if a declaration under subsection 85(2) was in force in relation to each non-listed component drug, as described in paragraph (4A)(e).

17  Subsection 99ACC(6)

Repeal the subsection, substitute:

Subject to statutory price reduction etc.

             (6)  The following provisions have effect:

                     (a)  a listed component drug contained in a drug in a combination item becomes subject to statutory price reduction if section 99ACB or 99ADH, or subsection 99ACF(1), (2), (2AB) or (2AC) because of section 99ACH, has applied to a listed brand of a pharmaceutical item that:

                              (i)  has the listed component drug; and

                             (ii)  has the same manner of administration as the combination item;

                     (b)  whichever provision mentioned in paragraph (a) applied, that provision applies to the listed component drug contained in the drug in the combination item in the same way as that provision applies to the listed brand of the pharmaceutical item that:

                              (i)  has the listed component drug; and

                             (ii)  has the same manner of administration as the combination item;

                     (c)  a listed component drug contained in a drug in a combination item becomes subject to statutory price reduction if subsection 99ACF(1) or (2) because of item 2, 3, 4, 5 or 6 in the table in section 99ACF has applied to a listed brand of a pharmaceutical item that has the listed component drug;

                     (d)  whichever provision mentioned in paragraph (c) applied, that provision applies to the listed component drug contained in the drug in the combination item in the same way as that provision applies to the listed brand of the pharmaceutical item that has the listed component drug.

18  Section 99ACD (heading)

Repeal the heading, substitute:

99ACD   25% price reduction for new brands of combination items

19  Paragraphs 99ACD(1A)(a), (b) and (c)

Omit “or 16%”, substitute “, 16% or 25%”.

20  At the end of subsection 99ACD(1A)

Add:

               ; or (d)  on the day before the determination day:

                              (i)  the approved ex-manufacturer price of a listed brand of the existing item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—the original approved ex-manufacturer price of the first listed brand of the existing item;

                            has, by virtue of previous price reductions, been reduced by 40% or more.

21  Subsection 99ACD(4) (heading)

Repeal the heading, substitute:

25% price reduction

22  Subsections 99ACD(5), (6), (6A) and (6B)

Repeal the subsections, substitute:

          (4A)  If, on the day before the determination day:

                     (a)  the approved ex-manufacturer price of a listed brand of the existing item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—the original approved ex-manufacturer price of the first listed brand of the existing item;

has, by virtue of previous price reductions, been reduced by:

                     (c)  15% or less, subsection (5) applies; and

                     (d)  more than 15% but less than 40%, subsection (5A) applies.

Note:          If previous price reductions have been 40% or more, see paragraph (1A)(d).

             (5)  Subject to subsections (7) and (7A), the agreed price of the new brand of the trigger combination item that comes into force on the determination day must not exceed the approved ex-manufacturer price, on the day before the determination day, of the existing brand of the existing item, reduced by 25%.

          (5A)  Subject to subsections (7) and (7B), the agreed price of the new brand of the trigger combination item that comes into force on the determination day must not exceed:

                     (a)  60% of the approved ex-manufacturer price of a listed brand of the existing item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—60% of the original approved ex-manufacturer price of the first listed brand of the existing item.

23  Subsection 99ACD(7)

Omit “subsection (5)”, substitute “subsections (5) and (5A)”.

24  After subsection 99ACD(7)

Insert:

Ministerial discretion not to apply, or to reduce, statutory price reduction

          (7A)  For the purposes of subsection (5), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price mentioned in that subsection is to be worked out using a lower percentage (including zero %) specified in the determination.

          (7B)  For the purposes of paragraphs (5A)(a) and (b), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price mentioned in those paragraphs is to be worked out using a higher percentage specified in the determination.

          (7C)  In making a determination under subsection (7A) or (7B):

                     (a)  the Minister must take into account what the agreed price of the new brand of the trigger combination item would otherwise be under this section in relation to the particular determination day if a determination were not made; and

                     (b)  the Minister may take into account any other matter that the Minister considers relevant.

          (7D)  If the Minister makes a determination under subsection (7A) or (7B), the agreed price of the new brand of the trigger combination item is not to be further reduced under this section on any determination day that occurs after the determination day specified in the determination made under the relevant subsection.

25  Section 99ACE (heading)

Repeal the heading, substitute:

99ACE   Flow-on of 25% price reduction to related brands of combination items

26  After subsection 99ACE(1)

Insert:

          (1A)  If paragraph 99ACD(1A)(d) has applied in relation to a new brand of a new combination item, then this section applies to the related brand of the related item as if:

                     (a)  section 99ACD had applied to the new brand of the new combination item; and

                     (b)  the current price for the new brand of the new combination item is the new agreed price; and

                     (c)  the day that paragraph 99ACD(1A)(d) is satisfied is the same day as the reduction day.

Circumstances in which section does not apply

          (1B)  This section does not apply in relation to the related brand of the related item if, on the day before the reduction day:

                     (a)  the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—the original approved ex-manufacturer price of the first listed related brand of the related item;

has, by virtue of previous price reductions, been reduced by 40% or more.

27  Subsection 99ACE(2) (heading)

Repeal the heading, substitute:

25% price reduction

28  After subsection 99ACE(2)

Insert:

          (2A)  If, on the day before the reduction day:

                     (a)  the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—the original approved ex-manufacturer price of the related brand of the related item;

has, by virtue of previous price reductions, been reduced by:

                     (c)  15% or less, paragraph (3)(a) or (c), or (4)(a) or (c), as the case requires, applies; and

                     (d)  more than 15% but less than 40%, paragraph (3)(b) or (d), or (4)(b) or (d), as the case requires, applies.

Note:          If previous price reductions have been 40% or more, see subsection (1B).

          (2B)  If, on the day before the reduction day:

                     (a)  the claimed price for a particular pack quantity of the related brand of the related item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—the original claimed price for a particular pack quantity of the related brand of the related item;

has, by virtue of previous price reductions, been reduced by:

                     (c)  15% or less, paragraph (4A)(a) applies; and

                     (d)  more than 15% but less than 40%, paragraph (4A)(b) applies.

Note:          If previous price reductions have been 40% or more, see subsection (1B).

29  Paragraphs 99ACE(3)(a) and (b)

Repeal the paragraphs, substitute:

                     (a)  in a price agreement, specify an agreed price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5), does not exceed the approved ex-manufacturer price for the related brand of the related item, on the day before the reduction day, reduced by 25%; or

                     (b)  in a price agreement, specify an agreed price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5A), does not exceed:

                              (i)  60% of the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—60% of the original approved ex-manufacturer price of the related brand of the related item; or

                     (c)  in a price determination, specify a determined price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5), does not exceed the approved ex-manufacturer price for the related brand of the related item, on the day before the reduction day, reduced by 25%; or

                     (d)  in a price determination, specify a determined price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5A), does not exceed:

                              (i)  60% of the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—60% of the original approved ex-manufacturer price of the related brand of the related item.

30  Paragraphs 99ACE(4)(a) and (b)

Repeal the paragraphs, substitute:

                     (a)  in a price determination, specify a determined price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5), does not exceed the approved ex-manufacturer price for the related brand of the related item, on the day before the reduction day, reduced by 25%; or

                     (b)  in a price determination, specify a determined price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5A), does not exceed:

                              (i)  60% of the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—60% of the original approved ex-manufacturer price of the related brand of the related item; or

                     (c)  in a price agreement, specify an agreed price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5), does not exceed the approved ex-manufacturer price for the related brand of the related item, on the day before the reduction day, reduced by 25%; or

                     (d)  in a price agreement, specify an agreed price for the related brand of the related item that comes into force on the reduction day and, subject to subsections (4B) and (5A), does not exceed:

                              (i)  60% of the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—60% of the original approved ex-manufacturer price of the related brand of the related item.

31  Subsection 99ACE(4A)

After “of the related brand of the related item that”, insert “comes into force on the reduction day and”.

32  Paragraphs 99ACE(4A)(a) and (b)

Repeal the paragraphs, substitute:

                     (a)  subject to subsection (5D), does not exceed the claimed price for that pack quantity of the related brand of the related item, on the day before the reduction day, reduced by 25%; or

                     (b)  subject to subsection (5E), does not exceed:

                              (i)  60% of the claimed price for that pack quantity of the related brand of the related item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—60% of the original claimed price for that pack quantity of the related brand of the related item.

33  Subsection 99ACE(4B)

Omit “subparagraphs (3)(a)(ii), (3)(b)(ii), (4)(a)(ii) and (4)(b)(ii)”, substitute “paragraphs (3)(a) to (d) and (4)(a) to (d)”.

34  Subsections 99ACE(5), (5A) and (5B)

Repeal the subsections, substitute:

Ministerial discretion not to apply, or to reduce, statutory price reduction

             (5)  For the purposes of paragraph (3)(a) or (c) or (4)(a) or (c), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price mentioned in the relevant paragraph is to be worked out using a lower percentage (including zero %) specified in the determination.

          (5A)  For the purposes of paragraph (3)(b) or (d) or (4)(b) or (d), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price mentioned in the relevant paragraph is to be worked out using a higher percentage specified in the determination.

          (5B)  In making a determination under subsection (5) or (5A):

                     (a)  the Minister must take into account what the approved ex-manufacturer price of the related brand of the related item would otherwise be under this section in relation to the particular reduction day if a determination were not made; and

                     (b)  the Minister may take into account any other matter that the Minister considers relevant.

          (5C)  If the Minister makes a determination under subsection (5) or (5A), the agreed price or determined price of the related brand of the related item is not to be further reduced under this section on any reduction day that occurs after the reduction day specified in the relevant determination.

          (5D)  For the purposes of paragraph (4A)(a), the Minister may, by written instrument, determine that the claimed price mentioned in that paragraph is to be worked out using a lower percentage (including zero %) specified in the determination.

          (5E)  For the purposes of paragraph (4A)(b), the Minister may, by written instrument, determine that the claimed price mentioned in that paragraph is to be worked out using a higher percentage specified in the determination.

           (5F)  In making a determination under subsection (5D) or (5E):

                     (a)  the Minister must take into account what the claimed price for the pack quantity of the related brand of the related item would otherwise be under this section in relation to the particular reduction day if a determination were not made; and

                     (b)  the Minister may take into account any other matter that the Minister considers relevant.

          (5G)  If the Minister makes a determination under subsection (5D) or (5E), the claimed price for the pack quantity of the related brand of the related item is not to be further reduced under this section on any reduction day that occurs after the reduction day specified in the relevant determination.

35  Subsection 99ACF(1) (table item 1)

Repeal the item.

36  After subsection 99ACF(2)

Insert:

Reduction by dollar amounts

       (2AA)  Subject to section 99ACG, if:

                     (a)  section 99ACH applies to a listed brand (the related brand ) of a pharmaceutical item (the related item ) on a day specified in the section (the reduction day ); and

                     (b)  on the day before the reduction day:

                              (i)  the approved ex-manufacturer price of the related brand of the related item on 1 January 2016; or

                             (ii)  if subparagraph (i) does not apply—the original approved ex-manufacturer price of the related brand of the related item; or

                            (iii)  if applicable, one or more claimed prices of the related brand of the related item on 1 January 2016; or

                            (iv)  if subparagraph (iii) does not apply—if applicable, one or more claimed prices, of the related brand of the related item;

                            have, by virtue of previous price reductions, been reduced by:

                             (v)  15% or less, subsection (2AB) applies; and

                            (vi)  more than 15% but less than 40%, subsection (2AC) applies.

       (2AB)  Subject to subsections (2A) and (3AA), the approved ex-manufacturer price, or (if applicable) each claimed price, for the related brand of the related item that comes into force on the reduction day must not exceed the approved ex-manufacturer price, or each of the claimed prices, of the related brand of the related item, on the day before the reduction day, reduced by 25%.

       (2AC)  Subject to subsections (2A) and (3AB), the approved ex-manufacturer price, or (if applicable) each claimed price, for the related brand of the related item that comes into force on the reduction day must not exceed:

                     (a)  60% of the approved ex-manufacturer price, or each of the claimed prices, of the related brand of the related item on 1 January 2016; or

                     (b)  if paragraph (a) does not apply—60% of the original approved ex-manufacturer price, or each of the claimed prices, of the related brand of the related item.

37  Subsection 99ACF(2A)

Omit “subsection (1) and paragraph (2)(b)”, substitute “subsection (1), paragraph (2)(b) and subsections (2AB) and (2AC)”.

38  After subsection 99ACF(3)

Insert:

       (3AA)  For the purposes of subsection (2AB), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price, or (if applicable) each claimed price, mentioned in that subsection (the specified provision ) is to be worked out using a lower percentage (including zero %) specified in the determination.

       (3AB)  For the purposes of paragraphs (2AC)(a) and (b), the Minister may, by written instrument, determine that the relevant approved ex-manufacturer price, or (if applicable) each claimed price, mentioned in those paragraphs (the specified provision ) is to be worked out using a higher percentage specified in the determination.

39  Subsection 99ACF(3A)

Omit “the application of item 2, 3, 4, 5, or 6 of the table in subsection (1)”, substitute “the application of an item of the table in subsection (1), or subsection (2AB) or paragraphs (2AC)(a) and (b)”.

40  At the end of subsection 99ACF(3B)

Add “, (3AA) or (3AB)”.

41  Subparagraph 99ACG(b)(iii)

Omit “item 1 of the table in section 99ACF”, substitute “section 99ACH”.

42  At the end of paragraph 99ACG(b)

Add:

                            (iv)  subsection 99ACF(2AB) or (2AC);

43  Section 99ACH (heading)

Repeal the heading, substitute:

99ACH   25% statutory price reduction flow-on to related brands

44  Paragraph 99ACH(1)(a)

Omit “section 99ACB”, substitute “subsection 99ACB(5) or (5A)”.

45  After subsection 99ACH(1)

Insert:

          (1A)  If:

                     (a)  paragraph 99ACB(2)(d) applies in relation to a listed brand of the existing item; and

                     (b)  on or after the day that paragraph 99ACB(2)(d) applies, a price agreement or a determination under section 85B is in force in relation to any of the listed brands (the related brand ) of a pharmaceutical item (the related item ) mentioned in subsection (2); and

                     (c)  the related item is not a combination item; and

                     (d)  the related item is not an exempt item;

then this section applies to the related brand of the related item as if:

                     (e)  section 99ACB had applied to the brand of the pharmaceutical item; and

                      (f)  the current price remains the agreed price for the brand (the new brand ) of the pharmaceutical item (the new item ); and

                     (g)  the agreed price comes into force on the day that paragraph 99ACB(2)(d) is satisfied (the reduction day ).

46  Subsection 99ACH(2)

Omit “paragraph (1)(c)”, substitute “paragraphs (1)(c) and (1A)(b)”.

47  Paragraph 99ACHA(1)(c)

Omit “item 1 in the table in section 99ACF”, substitute “section 99ACH”.

Part 2 16% price reduction

National Health Act 1953

48  Section 99AC

Omit “25% price reduction” (wherever occurring), substitute “16% price reduction”.

49  Subsections 99ACA(2), (2A) and (2B)

Repeal the subsections, substitute:

             (2)  A listed component drug contained in a drug in a combination item has been subject to a 12.5% price reduction if:

                     (a)  any of the following has applied before 1 February 2011 to a brand of a pharmaceutical item that has the listed component drug and has the same manner of administration as the combination item:

                              (i)  section 99ACB;

                             (ii)  subsection 99ACF(1) or (2) because of item 1 of the table in section 99ACF; or

                     (b)  a pharmaceutical item that has the listed component drug and has the same manner of administration as the combination item is in a class of pharmaceutical items to which a 12.5% administrative price reduction has applied.

          (2A)  A listed component drug contained in a drug in a combination item has been subject to a 16% price reduction if:

                     (a)  any of the following has applied to a brand of a pharmaceutical item that has the listed component drug and has the same manner of administration as the combination item:

                              (i)  section 99ACB;

                             (ii)  subsection 99ACF(1) or (2) because of item 1 of the table in section 99ACF; or

                     (b)  a pharmaceutical item that has the listed component drug and has the same manner of administration as the combination item is in a class of pharmaceutical items to which a 16% administrative price reduction has applied.

          (2B)  A listed component drug contained in a drug in a combination item has been subject to a 25% price reduction if:

                     (a)  any of the following has applied on or after 1 October 2018 and before 1 July 2022 to a brand of a pharmaceutical item that has the listed component drug and has the same manner of administration as the combination item:

                              (i)  section 99ACB;

                             (ii)  subsection 99ACF(2AB) or (2AC); or

                     (b)  a pharmaceutical item that has the listed component drug and has the same manner of administration as the combination item is in a class of pharmaceutical items to which a 25% administrative price reduction has applied.

To avoid doubt, a 25% price reduction occurs even if the reduction is in fact more or less than 25% (including zero %).

Note:          Subparagraph (a)(ii)—subsections 99ACF(2AB) and (2AC) were repealed by Part 2 of Schedule 1 to the National Health Amendment (Pharmaceutical Benefits—Budget and Other Measures) Act 2017 .

50  Subdivision B of Division 3A of Part VII (heading)

Repeal the heading, substitute:

Subdivision B 16% price reductions for new brands of pharmaceutical items that are not combination items

51  Section 99ACB (heading)

Repeal the heading, substitute:

99ACB   16% price reduction for new brands of pharmaceutical items that are not combination items

52  Paragraph 99ACB(2)(c)

Omit “applied; or”, substitute “applied.”.

53  Paragraph 99ACB(2)(d)

Repeal the paragraph.

54  Subparagraph 99ACB(3)(a)(ii)

Omit “section 99ACH”, substitute “item 1 of the table in section 99ACF”.

55  Subparagraph 99ACB(3)(a)(iii)

Repeal the subparagraph.

56  Subsection 99ACB(4) (heading)

Repeal the heading, substitute:

16% price reduction

57  Subsections 99ACB(4A), (5) and (5A)

Repeal the subsections, substitute:

             (5)  Subject to subsection (6), the agreed price for the new brand of the trigger item that comes into force on the determination day must not exceed the approved ex-manufacturer price, on the day before the determination day, of the existing brand of the existing item, reduced by 16%.

58  Subsection 99ACB(6)

Omit “subsections (5) and (5A)”, substitute “subsection (5)”.

59  Subsections 99ACB(6A) to (6D)

Repeal the subsections.

60  Paragraph 99ACC(6)(a)

Omit “subsection 99ACF(1), (2), (2AB) or (2AC) because of section 99ACH”, substitute “subsection 99ACF(1) or (2) because of item 1 of the table in section 99ACF”.

61  Section 99ACD (heading)

Repeal the heading, substitute:

99ACD   16% price reduction for new brands of combination items

62  Paragraph 99ACD(1A)(c)

Omit “applied; or”, substitute “applied.”.

63  Paragraph 99ACD(1A)(d)

Repeal the paragraph.

64  Subsection 99ACD(4) (heading)

Repeal the heading, substitute:

16% price reduction

65  Subsections 99ACD(4A), (5) and (5A)

Repeal the subsections, substitute:

             (5)  Subject to subsections (6) to (7), the agreed price of the new brand of the trigger combination item must not exceed the approved ex-manufacturer price, on the day before the determination day, of the existing brand of the existing item, reduced by 16%.

Adjustment for prior price reductions to component drugs

             (6)  If, on a day before the determination day:

                     (a)  one or more of the listed component drugs (the component ) contained in the drug in the existing item had been subject to one of the following (the prior price reduction of the component ):

                              (i)  a 12.5% price reduction;

                             (ii)  a 16% price reduction;

                            (iii)  a 25% price reduction; and

                     (b)  because of the prior price reduction of the component, the approved ex-manufacturer price of the existing brand of the existing item was, or if subparagraph (a)(iii) applies, was or would have been, reduced;

then the reduction referred to in subsection (5) is to be adjusted to reflect:

                     (c)  the percentage (the flowed-on percentage ) of the prior price reduction of the component that was taken into account in working out the amount of the reduction to the approved ex-manufacturer price of the existing brand of the existing item; and

                     (d)  the quantity of the component contained in the drug in the existing item.

          (6A)  For the purposes of subsection (6), if:

                     (a)  the prior price reduction of the component was a 12.5% price reduction; and

                     (b)  the flowed-on percentage was 100%;

then the reduction referred to in subsection (5) is to be adjusted so that there is no further reduction in relation to the component.

          (6B)  For the purposes of subsection (6), if:

                     (a)  the prior price reduction of the component was a 12.5% price reduction; and

                     (b)  the flowed-on percentage was less than 100%;

then the reduction referred to in subsection (5) is to be adjusted so that the percentage worked out as follows is taken into account in relation to the component:

66  Subsection 99ACD(7)

Omit “subsections (5) and (5A)”, substitute “subsection (5)”.

67  Subsections 99ACD(7A) to (7D)

Repeal the subsections.

68  Section 99ACE (heading)

Repeal the heading, substitute:

99ACE   Flow-on of 16% price reduction to related brands of combination items

69  Subsections 99ACE(1A) and (1B)

Repeal the subsections.

70  Subsection 99ACE(2) (heading)

Repeal the heading, substitute:

16% price reduction

71  Subsections 99ACE(2A) and (2B)

Repeal the subsections.

72  Paragraphs 99ACE(3)(a) to (d)

Repeal the paragraphs, substitute:

                     (a)  in a price agreement, specify an agreed price for the related brand of the related item that:

                              (i)  comes into force on the reduction day; and

                             (ii)  subject to subsections (4B) and (5) to (5B), does not exceed the approved ex-manufacturer price in force, on the day before that day, for the related brand of the related item, reduced by 16%; or

                     (b)  in a price determination, specify a determined price for the related brand of the related item that:

                              (i)  comes into force on the reduction day; and

                             (ii)  subject to subsections (4B) and (5) to (5B), does not exceed the approved ex-manufacturer price in force, on the day before that day, for the related brand of the related item, reduced by 16%.

73  Paragraphs 99ACE(4)(a) to (d)

Repeal the paragraphs, substitute:

                     (a)  in a price determination, specify a determined price for the related brand of the related item that:

                              (i)  comes into force on the reduction day; and

                             (ii)  subject to subsections (4B) and (5) to (5B), does not exceed the approved ex-manufacturer price in force, on the day before that day, for the related brand of the related item, reduced by 16%; or

                     (b)  in a price agreement, specify an agreed price for the related brand of the related item that:

                              (i)  comes into force on the reduction day; and

                             (ii)  subject to subsections (4B) and (5) to (5B), does not exceed the approved ex-manufacturer price in force, on the day before that day, for the related brand of the related item, reduced by 16%.

74  Subsection 99ACE(4A)

Repeal the subsection, substitute:

          (4A)  If a determination under subsection 85B(3) was in force for a particular pack quantity of the related brand of the related item on the day before the reduction day, the Minister may, in a determination under subsection 85B(3), specify a claimed price for that pack quantity of the related brand of the related item that:

                     (a)  comes into force on the reduction day; and

                     (b)  subject to subsections (5) to (5B), does not exceed the claimed price in force for that pack quantity of the related brand of the related item on the day before that day, reduced by 16%.

75  Subsection 99ACE(4B)

Omit “paragraphs (3)(a) to (d) and (4)(a) to (d)”, substitute “subparagraphs (3)(a)(ii), (3)(b)(ii), (4)(a)(ii) and (4)(b)(ii)”.

76  Subsections 99ACE(5) to (5G)

Repeal the subsections, substitute:

Adjustment for prior price reductions to component drugs

             (5)  If, on a day before the reduction day:

                     (a)  one or more of the listed component drugs (the component ) contained in the related item had been subject to one of the following (the prior price reduction of the component ):

                              (i)  a 12.5% price reduction;

                             (ii)  a 16% price reduction;

                            (iii)  a 25% price reduction; and

                     (b)  because of the prior price reduction of the component, the approved ex-manufacturer price of the related brand of the related item was, or if subparagraph (a)(iii) applies, was or would have been, reduced;

then the reduction referred to in subsection (3), (4) or (4A) is to be adjusted to reflect:

                     (c)  the percentage (the flowed-on percentage ) of the prior price reduction of the component that was taken into account in working out the amount of the reduction to the approved ex-manufacturer price of the related brand of the related item; and

                     (d)  the quantity of the component contained in the drug in the related item.

          (5A)  For the purposes of subsection (5), if:

                     (a)  the prior price reduction of the component was a 12.5% price reduction; and

                     (b)  the flowed-on percentage was 100%;

then the reduction referred to in subsection (3), (4) or (4A) is to be adjusted so that there is no further reduction in relation to the component.

          (5B)  For the purposes of subsection (5), if:

                     (a)  the prior price reduction of the component was a 12.5% price reduction; and

                     (b)  the flowed-on percentage was less than 100%;

then the reduction referred to in subsection (3), (4) or (4A) is to be adjusted so that the percentage worked out as follows is taken into account in relation to the component:

 

77  Subsection 99ACF(1) (before table item 2)

Insert:

1

99ACH

16%

78  Subsections 99ACF(2AA), (2AB) and (2AC)

Repeal the subsections.

79  Subsection 99ACF(2A)

Omit “subsection (1), paragraph (2)(b) and subsections (2AB) and (2AC)”, substitute “subsection (1) and paragraph (2)(b)”.

80  Subsections 99ACF(3AA) and (3AB)

Repeal the subsections.

81  Subparagraph 99ACG(b)(iii)

Omit “section 99ACH”, substitute “item 1 of the table in section 99ACF”.

82  Subparagraph 99ACG(b)(iv)

Repeal the subparagraph.

83  Section 99ACH (heading)

Repeal the heading, substitute:

99ACH   16% statutory price reduction flow-on to related brands

84  Paragraph 99ACH(1)(a)

Omit “subsection 99ACB(5) or (5A)”, substitute “section 99ACB”.

85  Subsection 99ACH(1A)

Repeal the subsection.

86  Subsection 99ACH(2)

Omit “paragraphs (1)(c) and (1A)(b)”, substitute “paragraph (1)(c)”.

87  Paragraph 99ACHA(1)(c)

Omit “section 99ACH”, substitute “item 1 in the table in section 99ACF”.