Access to Innovative New Presentations Sections 99ACB / ACD of the National Health

Act Claire Willmott, Legal Counsel

Statutory Price Reduction

Section 99ACB - 16% price reduction for new brands of pharmaceutical items

that are not combination items

Section 99ACB(1) of the Act provides that there will be a 16% price reduction on a new

brand of pharmaceutical item (the trigger item ) that is not a combination item if:

a) a determination under subsection 85(6) of a pharmaceutical item (i.e. a Ministerial

declaration of a brand of pharmaceutical item) comes into force on a day (the

determination day ); and

b) on the day before the determination day, the new brand of the trigger item was not a

listed brand of the trigger item; and

c) on the day before the determination day:

i. a brand (the existing brand) of a pharmaceutical item (the existing item) was a

listed brand of the existing item; and

ii. the new brand of the trigger item is bioequivalent or biosimilar to the existing brand

of the existing item; and

iii. the trigger item and existing item have the same drug and manner of

administration.

• Note: For the purposes of paragraph (c), the new brand and the existing brand may be the same

brand, or the trigger item and the existing item may be the same pharmaceutical item.

Follow on Pricing Provisions

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

brands

Section 99ACH(2) causes a “follow on” price reduction for items which are

not combination items or exempt items which are:

a) another listed brand of the new item;

b) a listed brand of another pharmaceutical item that has the same drug

and manner of administration as the new item; or

c) if the drug in the new item is in a therapeutic group – a listed brand of

a pharmaceutical item that:

i. has another drug that is in that group; and

ii. has the same manner of administration as the new brand of the

trigger item.

History of the Intent of the Formularies

National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2007

and the Second Reading Speech

• “Classifying medicines into formularies with no price links between them allows the government to reduce the price paid for medicines operating in a competitive market while protecting single brand medicines from unsustainable price reductions”.

• “Single brand medicines may retain their original listed price until such time their original listed price becomes subject to competition”.

• “F2 formulary will comprise those medicines which have multiple brands, and those which are interchangeable at the patient level with multiple brands that operate in a competitive market”.

History of the Intent of the Formularies

National Health Amendment (Pharmaceutical Benefits Scheme) Bill 2010

and the Second Reading Speech

• “The 12.5% price reduction policy was introduced by the Howard Government in 2005. This policy was designed to ensure that the Government achieved price reductions when generic medicines were listed on the PBS. In short, when the first new brand (generic) of medicine was listed on the PBS, a mandatory 12.5% reduction for all medicines was applied to all medicines in the reference group. This usually occurred around the time of patent expiry.”

• “Price reductions are achieved as a result of competition between the brands in the market, within a framework of policy certainty.”

• “The changes acknowledge that Australian taxpayers should be benefiting from that competition and the lower prices that result from it”.

Current Interpretation of sections 99ACB /

99ACD

Senate Community Affairs Committee: Answers to Estimates Questions on Notice; Health and

Ageing Portfolio (13 & 15 February 2013)

• “The criteria in the Act do not limit the 16% statutory price reduction to situations where the drug has come off patent and has generic competition”.

• “Issues around originator sponsors listing bioequivalent brands that trigger a price reduction and move to F2 are broader than the introduction of specific presentations of a product. Single sponsor listings of bioequivalent brands may occur for a range of reasons, including maintaining market share and pricing advantages for affected or related drugs”.

The current interpretation of sections 99ACB / ACD may result in new

presentations of the same brand triggering a mandatory price cut and a move to

F2.

Current Interpretation of sections 99ACB /

99ACD

Is it a Pharmaceutical Item?

A pharmaceutical item is a particular PBS-listed drug in a particular form

with a particular manner of administration. It is covered by a unique PBS

code.

Definition of “Form”

• “Form” is not defined under the Act – open for interpretation.

• “Form (Dosage Form)” – The pharmaceutical form in which a product is

presented for therapeutic administration e.g. tablet or cream etc.

• Form – stated in listing instrument.

E.g. Pegasys RBV (peginterferon alfa-2a and ribavirin) in National

Health (Listing of Pharmaceutical Benefits) Instrument 2012 –

Schedule One:

“Injection 135 micrograms in 0.5mL single use pre-filled syringe”

“Injection 180 micrograms in 0.5mL single use pre-filled syringe”

Current Interpretation of sections 99ACB /

99ACD

Bioequivalence

• Directive 2001/83/EC, Article 10(2)(b), states that a generic medicinal

product is a product which has the same qualitative and quantitative

composition in active substances and the same pharmaceutical form as

the reference medicinal product, and whose bioequivalence with the

reference medicinal product has been demonstrated by appropriate

bioavailability studies.

• The reference product and new product may be considered to be

biosimilar for the purposes of the National Health Act 1953, where:

– The SBMP* has been registered by the TGA on the basis of an

abridged or reduced dataset; and

– The SBMP* and the reference product have the same non-

proprietary name (either an INN and/or ABN)

* SBMP = Similar Biologic Medicinal Products

Practical Examples

An auto-injector pen to provide a

safe and convenient

delivery method

New formulations to make tablets

easier for patients to

swallow

A prefilled anticoagulant

syringe to minimise risk of

needle stick injuries

New formulations to modify tablets

modified to increase their

physical strength

Debate:

Evergreening vs Patient Access

Competitive market

Delivery method

Patient compliance

New Technologies

Safety profile Patent

lifecycle

Section 99ACB and ACD is intended to impose price cuts when a

market moves from single brand to multiple brands via generic entry*.

It is not intended to make it impossible to bring new technology

improvements to single brand (no generic competition) products.

* or introduction of a second brand by the same sponsor

Where to Next?

Minister for Health has announced a reinvigoration of the Access to

Medicines Working Group (AMWG) – a forum between MA and the DOH

to work collaboratively on issues of common concern.

The first four priorities are:

– Managed entry scheme

– Transparency of PBS process

– 99ACB/ACD

– Post market reviews

Watch this space!

Doing now what patients need next