National Health (Weighted average disclosed price-April 2017 reduction day) Determination 2016 [F2016L01963]-Advice only [2017] AUSStaCSDLM 33 (8 February 2017)

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Instrument	National Health (Weighted average disclosed price – April 2017 reduction day) Determination 2016 [F2016L01963]
Purpose	Brings into effect reductions to the approved ex-manufacturer price of certain Pharmaceutical Benefits Scheme medicines that were calculated as a result of price disclosure
Last day to disallow	9 May 2017
Authorising legislation	National Health Act 1953
Department	Health
Scrutiny principle	Standing Order 23(3)(a)

Description of consultation

Section 17 of the Legislation Act 2003 directs a rule-maker to be satisfied that appropriate consultation, as is reasonably practicable, has been undertaken in relation to a proposed instrument. The ES which must accompany an instrument is required to describe the nature of any consultation that has been carried out or, if there has been no consultation, to explain why none was undertaken (paragraphs 15J(2)(d) and (e)).

With reference to these requirements, the committee notes that the ES for this determination states:

Pharmaceutical companies were consulted in relation to the introduction of price disclosure requirements during the policy development for introduction of price disclosure in 2007, during implementation phases, and during the development and implementation of the further PBS reforms of 2010, pricing changes in 2012, simplified price disclosure amendments in 2014 and measures announced in the 2015 PBS Access and Sustainability Package. Consultation occurred through meetings with peak industry bodies. Further information on price disclosure was also disseminated through peak industry bodies, during meetings with the Price Disclosure Working Group and directly to companies through information sessions conducted in March 2011, June 2012, and March 2016, and distribution of associated educational material at the time of amendments.
Pharmaceutical companies with a listed or delisted brand subject to the price disclosure requirements for the 2017 April Cycle disclosed information relevant to this determination directly to Australian Healthcare Associates Pty Ltd (AHA), known as the Price Disclosure Data Administrator (PDDA). AHA is prescribed in sub-regulation 37T(6) as the person to whom, in accordance with paragraph 99ADC(1)(a), a responsible person is to provide price disclosure information. The PDDA provided responsible persons with an opportunity to check that the information disclosed to the PDDA was translated correctly to PDDA data files. This was done prior to that data being used to apply the method set out in the Regulations to arrive at the WADP for listed brands.

While the committee does not usually interpret paragraphs 15J(2)(d) and (e) as requiring a highly detailed description of consultation undertaken, it considers that an overly bare or general description is insufficient to satisfy the requirements of the Legislation Act 2003. In this case, the ES primarily describes historical consultation that took place in relation to the introduction and implementation of price disclosure. The remainder of the consultation description discusses a process for disclosing data, and the provision of an opportunity for the supplier of a particular brand of a medicine on the PBS (the responsible person) to check that data has been ‘translated’ correctly. In terms of complying with paragraphs 15J(2)(d) and (e) of the Legislation Act 2003, the committee's preferred approach would be for the ES to have explicitly stated that consultation for this determination was considered unnecessary (or inappropriate) for this reason.

The committee's expectations in this regard are set out in the guideline on consultation contained in Appendix 1.

The committee draws the above to the minister's attention.