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NATIONAL HEALTH ACT 1953 - SECT 99ADH

Price reduction based on information provided under the price disclosure requirements

When this section applies

  (1)   This section applies if:

  (a)   under section   99ADB, the Minister determines the weighted average disclosed price of a brand of a pharmaceutical item (the WADP brand ) in respect of a data collection period for the brand; and

  (aa)   the Minister, by legislative instrument, determines a day (the reduction day ) for the purposes of this section in relation to the brand of the pharmaceutical item; and

  (b)   a price agreement or price determination is in force in relation to the brand of the pharmaceutical item on the reduction day; and

  (c)   the unadjusted price reduction for the brand of the pharmaceutical item is:

  (i)   if section   99ADHC does not apply to the brand of the pharmaceutical item--at least 10%; or

  (ii)   subject to subparagraph   (iii), if section   99ADHC applies to the brand of the pharmaceutical item and the approved ex - manufacturer price of the brand of the pharmaceutical item is more than $4--at least 30%; or

  (iii)   if section   99ADHC applies to the brand of the pharmaceutical item, the approved ex - manufacturer price of the brand of the pharmaceutical item is more than $4, and the brand of the pharmaceutical item has passed the 12.5% average unadjusted price reduction test set out in subsection   (6) of this section--at least 10%.

  (2)   For the purposes of paragraph   (1)(aa), the reduction day must be:

  (a)   1   April or 1   October in any year; or

  (b)   another prescribed day.

Price reduction

  (3)   If, on the reduction day, the approved ex - manufacturer price of the brand of the pharmaceutical item would, apart from this section, be higher than the adjusted approved ex - manufacturer price of the brand of the pharmaceutical item, then, on the reduction day, the amount of the approved ex - manufacturer price is taken to be reduced to the amount of the adjusted approved ex - manufacturer price for the purposes of the price agreement or price determination.

Note:   If the pricing quantity of the brand of the pharmaceutical item on the relevant day is different from the pricing quantity on the reduction day, then, for the purposes of subsection   (3), the adjusted approved ex - manufacturer price of the brand of the pharmaceutical item is worked out under subsection   (4A).

Claimed price reduction

  (4)   If, on the reduction day:

  (a)   a determination under subsection   85B(3) is in force in relation to a particular pack quantity of the brand of the pharmaceutical item; and

  (b)   the approved ex - manufacturer price of the brand of the pharmaceutical item is reduced because of subsection   (3);

then, on the reduction day the claimed price for that pack quantity of the brand of the pharmaceutical item is taken to be reduced by the percentage worked out as follows:

Start formula start fraction AEMP minus AAEMP over AEMP end fraction times 100 end formula

where:

"AAEMP" means the adjusted approved ex - manufacturer price of the brand of the pharmaceutical item.

"AEMP" means the amount that would have been the approved ex - manufacturer price of the brand of the pharmaceutical item on the reduction day if the reduction under subsection   (3) had not occurred.

Note:   If the pricing quantity of the brand of the pharmaceutical item on the relevant day is different from the pricing quantity on the reduction day, then, for the purposes of subsection   (4), the adjusted approved ex - manufacturer price of the brand of the pharmaceutical item is worked out under subsection   (4A).

Apportioning if pricing quantity changes

  (4A)   If the pricing quantity of the brand of the pharmaceutical item on the relevant day is different from the pricing quantity of the brand of the pharmaceutical item on the reduction day, then, for the purposes of subsections   (3) and (4), the adjusted approved ex - manufacturer price of the brand of the pharmaceutical item is taken to be the amount worked out as follows:

    Start formula start fraction WADP over PQ1 end fraction times PQ2 end formula

where:

"PQ1" means the pricing quantity of the brand of the pharmaceutical item on the relevant day.

"PQ2" means the pricing quantity of the brand of the pharmaceutical item on the reduction day.

"WADP" means the amount equal to the amount of the weighted average disclosed price of the brand of the pharmaceutical item.

Section not to limit Minister's powers

  (5)   This section does not limit the Minister's powers, on or after the reduction day, to make:

  (a)   other price agreements; or

  (b)   further determinations under section   85B;

for the brand of the pharmaceutical item.

12.5% average unadjusted price reduction test

  (6)   For the purposes of this section, a brand of a pharmaceutical item passes the 12.5% average unadjusted price reduction test if there have been 3 consecutive data collection periods in respect of which a weighted average disclosed price has been determined for any brand of the pharmaceutical item, where:

  (a)   the percentage obtained by dividing the total of the unadjusted price reductions for a brand of the pharmaceutical item in respect of each of those data collection periods by 3 is at least 12.5%; and

  (b)   this section did not apply to the brand of the pharmaceutical item in relation to any of those data collection periods; and

  (c)   those data collection periods include the data collection period mentioned in paragraph   (1)(a).

  (7)   For the purposes of subsection   (6), if the Minister determines the weighted average disclosed price of a brand of a pharmaceutical item in respect of a data collection period for the brand, the unadjusted price reduction for the brand of the pharmaceutical item in respect of the data collection period is the unadjusted price reduction for the brand of the pharmaceutical item when the determination came into force.

Note:   See subsection   99ADB(4).


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