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Claire Wilmott delivered the presentation at 2014 Pharmaceutical Law Conference. The Pharmaceutical Law Conference is the foremost meeting place and networking hub of the pharmaceutical law industry, and the only pharmaceutical law event in the Asia-Pacific region. The 2014 event highlights included pharma law reform, IP, competitive strategies, industry transparency, sustainable drug pricing and patenting life sciences and more. For more information about the event, please visit: http://www.informa.com.au/pharmalawevent14
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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