Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) If:
(a) this section applies to a brand of a pharmaceutical item; and
(b) the average unadjusted price reduction, worked out under subsection (3), for all the brands of pharmaceutical items to which this section applies is less than 23%;
the adjusted approved ex-manufacturer price of the brand of the pharmaceutical item, on 1 April 2012, is the amount worked out under subsection (6).
Brands of pharmaceutical items to which this section applies
(2) This section applies to a brand of a pharmaceutical item (the relevant brand ) if:
(a) the drug in the pharmaceutical item is on F2 on 1 December 2010; and
(b) no requirement to comply with price disclosure requirements has arisen under former subsection 99ADD(1) before 1 December 2010 in relation to:
(i) the relevant brand; or
(ii) any other brand of any pharmaceutical item having that drug and having the same manner of administration as the relevant brand.
The average unadjusted price reduction
(3) The average unadjusted price reduction for all the brands of pharmaceutical items to which this section applies is the percentage worked out as follows:
Method statement
Step 1. For each brand of a pharmaceutical item to which this section applies, multiply:
(a) the applicable approved ex-manufacturer price of the brand; by
(b) the total number of the supplies of the agreed quantity for the brand that were supplies in respect of which the Commonwealth provided benefits under section 85, during the period of 10 months starting on 1 December 2010.
Step 2. For each amount worked out under step 1, work out the amount of that step 1 amount that represents a percentage equal to the unadjusted price reduction for the brand.
Step 3. Divide:
(a) the sum of all the amounts worked out under step 2 for all of the brands of pharmaceutical items to which this section applies; by
(b) the sum of all the amounts worked out under step 1 for all of those brands.
Step 4. The amount worked out under step 3, multiplied by 100 and expressed as a percentage, is the average unadjusted price reduction for all the brands of pharmaceutical items to which this section applies.
(4) For the purposes only of subsection (3), if:
(a) a combination item has a drug to which subsection 85AB(5) applies; and
(b) there is only one listed brand (the single brand ) of the combination item; and
(c) a pharmaceutical item has a drug that is a listed drug (the component drug ) that the drug referred to in paragraph (a) contains; and
(d) a brand of the pharmaceutical item (a related brand ):
(i) is a brand to which this section applies; and
(ii) has the same manner of administration as the single brand;
then:
(e) the single brand is taken to be a brand of a pharmaceutical item to which this section applies; and
(f) subject to subsection (5), the unadjusted price reduction for the single brand is taken to be the percentage by which the approved ex-manufacturer price of the single brand would be reduced if the approved price to pharmacists of the brand were to be reduced under section 99ACC to take account of:
(i) the unadjusted price reduction for the related brand being applied to the component drug; and
(ii) in a case where the single brand contains one or more other component drugs in relation to which there are one or more other related brands of pharmaceutical items--the unadjusted price reductions for the other related brands being applied to the other component drugs.
(5) The unadjusted price reduction for the single brand is taken to be 0% if the single brand is a brand of a combination item in relation to which the Pharmaceutical Benefits Advisory Committee has advised the Minister under subsection 101(4AC).
Working out the adjusted approved ex-manufacturer price
(6) If subsection (1) applies in relation to a brand of a pharmaceutical item, the adjusted approved ex-manufacturer price of the brand is worked out as follows:
Method statement
Step 1. Divide 23% by the average unadjusted price reduction, worked out under subsection (3), for all the brands of pharmaceutical items to which this section applies. The result is the guaranteed adjustment proportion .
Step 2. For each of those brands of pharmaceutical items, multiply the guaranteed adjustment proportion by the unadjusted price reduction for the brand of the pharmaceutical item.
Step 3. For each of those brands, reduce the applicable approved ex-manufacturer price of the brand by the percentage worked out under step 2.
Step 4. If the lowest price disclosed, in compliance with price disclosure requirements under section 99ADD, for the pharmaceutical item during the period of 10 months starting on 1 December 2010, is higher than the amount worked out under step 3, work out the difference between:
(a) the applicable approved ex-manufacturer price of the brand; and
(b) that lowest price;
expressed as a percentage of that applicable approved ex-manufacturer price.
Step 5. The GAP-adjusted reduction for the brand is:
(a) unless step 4 applies--the percentage worked out under step 2; or
(b) if step 4 applies--the percentage worked out under step 4.
Step 6. Work out, under subsection (3), the average unadjusted price reduction for all the brands of pharmaceutical items to which this section applies, as if the unadjusted price reduction for each brand were the GAP-adjusted reduction for the brand.
Step 7. If the average unadjusted price reduction worked out under step 6 is at least 23%, reduce the applicable approved ex-manufacturer price of the brand by a percentage of that price equal to the GAP-adjusted reduction for the brand. The result is the GAP-adjusted approved ex-manufacturer price of the brand.
Step 8. If step 7 applies, the adjusted approved ex-manufacturer price of a brand to which this section applies is the GAP-adjusted approved ex-manufacturer price of the brand.
Step 9. If the average unadjusted price reduction worked out under step 6 is less than 23%, repeat steps 1 to 6, as many times as necessary until step 7 is satisfied, as if:
(a) the reference in step 1 to the average unadjusted price reduction were a reference to the average unadjusted price reduction last worked out under step 6; and
(b) the reference in step 2 to the unadjusted price reduction for a brand of a pharmaceutical item were a reference to the GAP-adjusted reduction for the brand last worked out under step 5.
(7) However, if, in applying or repeating steps 1 to 6 of the method statement in subsection (6), step 4 of the method statement applies in relation to all the brands of pharmaceutical items to which this section applies:
(a) steps 6 to 9 of the method statement cease to apply; and
(b) the adjusted approved ex-manufacturer price of a brand to which this section applies is worked out by reducing the applicable approved ex-manufacturer price of the brand by a percentage of that price equal to the GAP-adjusted reduction for the brand last worked out under step 5 of the method statement.
Effect of the unadjusted price reduction for a brand being less than 10%
(8) If, but for this subsection, the unadjusted price reduction for a brand of a pharmaceutical item would be less than 10%, the unadjusted price reduction for the brand is taken to be 0% for the purposes of:
(a) working out under subsection (3) the average unadjusted price reduction for all the brands of pharmaceutical items to which this section applies; and
(b) working out under subsection (6) the adjusted approved ex-manufacturer price of the brand.
The weighted average disclosed price of a brand
(9) Until the Minister determines the weighted average disclosed price of a brand of a pharmaceutical item in respect of the period of 10 months ending on 30 September 2011, that weighted average disclosed price is taken, for the purposes of any reference in this section to:
(a) the applicable approved ex-manufacturer price of the brand; or
(b) the unadjusted price reduction for the brand;
to be the price worked out in accordance with the regulations made for the purposes of subsection 99ADB(6).
AustLII: Copyright Policy
| Disclaimers
| Privacy Policy
| Feedback