Commonwealth Consolidated Acts Commonwealth Consolidated ActsWhen this section applies
(1) Subject to subsection (3), this section applies to a brand (the designated brand ) of a pharmaceutical item if:
(a) both:
(i) the drug and manner of administration of the pharmaceutical item has been on F2 for at least 42 months; and
(ii) at the end of the previous data collection period for the designated brand of the pharmaceutical item, at least 30 months have passed since the first price reduction under Division 3B of any listed brand of a pharmaceutical item that has the same drug and manner of administration of the pharmaceutical item; or
(b) the approved ex - manufacturer price of the designated brand of the pharmaceutical item is $4 or less; or
(c) both:
(i) the approved ex - manufacturer price of a brand of the pharmaceutical item has been increased on or after 1 July 2022 as a result of the making of a price agreement; and
(ii) a determination is in force under subsection (2) in relation to the designated brand of the pharmaceutical item; or
(d) the approved ex - manufacturer price of the designated brand of the pharmaceutical item has been increased under section 104B.
Note 1: Section 104B commences on 1 October 2022.
Note 2: There are various consequences of a brand being a designated brand, including the changed threshold in subparagraphs 99ADH(1)(c)(ii) and (iii), the limits on price reductions in subsections (4) and (5) of this section, the Minister's powers under Division 3CA of this Part relating to certain discounting and incentives, and the minimum stockholding requirements in Division 3CAA of this Part. For example, if a brand satisfies paragraphs (1)(a)(i) and (ii) of this section at the end of the data collection period ending on 31 March 2024, the brand will become a designated brand, and these consequences will apply to the brand, on and from 1 April 2025 (subject to subsection (3) of this section).
(2) If the approved ex - manufacturer price of a brand of a pharmaceutical item is increased on or after 1 July 2022 as a result of a new agreed price coming into force, the Minister may, by notifiable instrument, determine that paragraph (1)(c) applies to the brand of the pharmaceutical item.
(3) This section does not apply to a brand of a pharmaceutical item if:
(a) the drug in the pharmaceutical item is included in Schedule 2 to the current Poisons Standard (within the meaning of the Therapeutic Goods Act 1989 and as in force from time to time) by reference to a quantity or amount of the drug; and
(b) that quantity or amount of the drug is equal to or greater than the total quantity or amount of the drug contained in the quantity or number of units of the brand of the pharmaceutical item in any pack quantity of the brand of the pharmaceutical item.
Limits on price reductions
(4) The approved ex - manufacturer price of the designated brand of the pharmaceutical item is not to be reduced under this Part unless:
(a) the reduction is the result of the making of a price agreement; or
(b) the reduction is under section 99ADH as the result of subparagraph 99ADH(1)(c)(ii) or (iii).
(5) If, apart from this subsection:
(a) the approved ex - manufacturer price of the designated brand of the pharmaceutical item is to be reduced under a provision of this Part; and
(b) the reduction would result in the approved ex - manufacturer price being less than $4;
then:
(c) the approved ex - manufacturer price is not to be reduced under that provision to an amount less than $4; and
(d) the approved ex - manufacturer price is instead to be reduced by an amount that would result in the approved ex - manufacturer price being $4; and
(e) the reduction mentioned in paragraph (d) is taken to be a reduction under that provision.
When the drug and manner of administration of a pharmaceutical item is taken to have been on F2 for at least 42 months
(6) For the purposes of paragraph (1)(a), the drug and manner of administration of a pharmaceutical item is taken to have been on F2 for at least 42 months if:
(a) at end of the previous data collection period, the drug in the designated brand of the pharmaceutical item had been on F2 for at least 42 months; and
(b) on a day at least 42 months before the end of the previous data collection period:
(i) there was a related brand of the designated brand of the pharmaceutical item that had the same pharmaceutical item as, or was bioequivalent or biosimilar to, the designated brand of the pharmaceutical item; or
(ii) there were 2 or more related brands of the designated brand of the pharmaceutical item that had the same pharmaceutical item as, or were bioequivalent or biosimilar to, each other.
(7) For the purposes of this section, data collection period has the same meaning as in Division 3B.