Ministerial Discretion to reduce or not apply Statutory Price Reductions

Under Division 3A of Part VII of the National Health Act 1953  (the Act) the Minister for Health and Aged Care (or the Minister’s delegate) can exercise discretion to reduce or not apply the following Statutory Price Reductions (SPRs).

• Anniversary price reductions (5, 10 and 15 year)
  An anniversary price reduction* applies to F1 medicines on the fifth anniversary (5 per cent reduction), tenth anniversary (5 per cent reduction) and fifteenth anniversary (26.1 per cent reduction to increase to 30 per cent reduction on 1 April 2027) of a drug being listed on the PBS.
• First new brand reductions
  A first new brand price reduction is applied to existing PBS-listed products when the first new brand (the trigger item) that is bioequivalent or biosimilar and has the same drug and manner of administration as an existing item, lists on the PBS. The reduction that applies is 25 per cent off the current Approved Ex-Manufacturer Price (AEMP), or a reduction to bring the price to 60 per cent off the earliest of the 1 January 2016 or the date of listing AEMP. This includes first new brand reductions where the drug has been listed for between 5 and 10 years and the new brand is considered a new presentation (refer to New Presentation Guidance Material). All related brands that have the same drug and manner of administration as the trigger item, will also have their AEMPs reduced by the same percentage reduction.

  Combination flow-on price reductions
  A combination item is a drug that contains at least two drugs, where at least one drug is listed on the PBS. For example, drug Purple+Orange where drug Purple is PBS listed and drug Orange is not PBS listed.  When a PBS listed component is subject to a SPR, the SPR will automatically flow-on to that component in the combination item. Components that are not PBS listed will be subject to the same SPR as the listed component. The formulas for flow-on reductions to combination items are set out regulations 65A and 85A of the National Health (Pharmaceutical Benefits) Regulations 2017.

  *All SPR reductions are capped at 60 per cent off (or 40 per cent of) the Listed Brand’s AEMP on 1 January 2016 or the AEMP at a later date of listing.

Guidance Material for Ministerial Discretion to reduce or not apply Statutory Price Reductions

Sponsors can make a request to the Minister for the exercise of discretion to reduce or not apply a SPR to a particular medicine.

In deciding whether to exercise their discretion, the Minister must take into account what the AEMP would otherwise be if they do not exercise discretion (i.e., what the new price would be if the full reduction applied) and may take into account any other matter that they consider relevant.

The process for seeking Ministerial discretion and a summary of some other matter that the Minister may consider relevant is outlined in the Ministerial Discretion Guidance Material (PDF 532KB) - (Word 130KB).

Making a request

All Ministerial discretion requests are cost recovered (fees are listed on the PBS website), and must be made through the Health Products Portal (HPP) using the ‘list management service requests’ submission type. All relevant information in the HPP form should be completed, which includes completing cost of goods information.

On 1 August 2026, a list of medicines subject to reductions occurring on 1 April 2027 (anniversary SPRs and combination flow on SPRs) will be published on the PBS website, including the indicative 1 April 2027 AEMPs. Authorised Representatives will be able to apply for Ministerial discretion in accordance with the following timeframes.

*In some instances where the medicine is subject to a Deed of Agreement it may not be possible to notify the new AEMP within five business days. In these instances, Responsible Persons will be notified that an application has been received within five business days and will be notified of the new AEMP as soon as possible.

**Late delisting requests may be considered for a delist on the reduction date following notification of the final Ministerial discretion application outcome.

New presentation listing without triggering First New Brand SPRs

Sponsors can request that a new presentation of a particular drug not trigger ‘First New Brand’ SPRs if listing of the new presentation is sought up to the tenth anniversary of the drug being a PBS listed drug. Guidance on the operation of the new presentation exemption can be found in the New Presentation Ministerial Discretion Guidance Material (PDF 91KB) - (Word 62KB).

Requests can be emailed to the PBS Statutory Price Reductions Inbox using the List Management Application Form.

Further information

For further information or questions please contact the PBS Statutory Price Reductions Inbox.