The ‘National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Bill 2021’ was passed by both houses of the Australian parliament on 13 December 2021.

The new bill amends the: National Health Act 1953 in order to provide for price reductions on the fifth, tenth and fifteenth anniversary of a drug listing on the Pharmaceutical Benefits Scheme (PBS) and when the first new brand of a drug lists on the PBS. The new bill also retains ministerial discretion to ensure that the minister can intervene if a legislated price reduction were to have an unintended consequence. In addition, it establishes a price reduction floor and stockholding requirements, for certain PBS listed brands that may be susceptible to global medicines shortages.

The bill also enables the new Strategic Agreements between the Commonwealth and the Generic and Biosimilar Medicines Association (GBMA) and Medicines Australia, which were agreed in September 2021 [1], to begin on 1 July 2022.

The bill has been welcomed by the Society of Hospital Pharmacists of Australia (SHPA), whose Chief Executive Kristin Michaels said that the ‘SHPA is committed to supporting policies and provisions which mitigate medicine shortages and ensure Australians can access their medicines without disruption’. She added that ‘Hospital Pharmacists are pleased to see the Federal Government taking further action to address medicines shortages, with these new Strategic Agreements requiring pharmaceutical sponsors to maintain four to six months’ stockholding of vital medicines at risk of supply disruption’.

The SHPA believes that the bill will provide certainty on the PBS pricing policy and ensure the PBS subsidy supports reliable medicines supply to Australia over the next five years and will also allow the Federal Government to achieve significant savings. The SHPA expect these savings will enable around AU$1.9 billion to be reinvested into the PBS to support the anticipated listing of more than AU$5 billion in new drugs and expanded patient access.

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Reference
1. GaBI Online - Generics and Biosimilars Initiative. New five-year medicines agreements in Australia [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2022 Jan 28]. Available from: www.gabionline.net/generics/general/new-five-year-medicines-agreements-in-australia

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