Catch-up Statutory Price Reductions
Page last updated: 20 October 2022
Amendments made to the National Health Act 1953 by the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Act 2021 (Cth) (Amendment Act) give effect to the commitments in the new Strategic Agreements with the medicines industry which include a range of statutory pricing reforms. The reforms include a one off ‘catch-up’ statutory price reduction (SPR) under section 99ACN of the Act that will apply on 1 April 2023. The purpose of the catch-up SPRs is to apply a reduction to drugs that have been listed on the Pharmaceutical Benefits Scheme (PBS) for 15 years or more that have not been subject to a price disclosure reduction.
Application of Catch-up SPRs
On 1 April 2023, a catch-up SPR will apply to a brand of a pharmaceutical item if:
- the 15th anniversary of the drug in the pharmaceutical item being a listed drug was on or before 1 April 2022;
- The drug and manner of administration within the pharmaceutical item has not been subject to a price disclosure reduction under Part VII, Division 3B of the Act; and
- The pharmaceutical item is not an exempt item under section 84AH of the Act.
The size of catch-up SPR will vary depending on previous SPRs that have applied to the pharmaceutical item (see s99ACNA of the Act) and will be up to a maximum of 36.82 per cent. The reduction that applies is worked out using the formula in subsection 99ACN(2) of the Act. All SPRs are capped at 60 per cent off (or 40 per cent of) the listed brand's AEMP on 1 January 2016 or the AEMP on the date of listing (if listed after 1 January 2016).
Combination items that contain a component item that is subject to a catch-up SPR will be subject to a flow-on price reduction on the same date. More information about flow-on price reductions for combination items can be found on the Combination Flow on webpage.
Ministerial Discretion
The Minister for Health has discretion under section 99ACF of the Act to reduce or not apply a catch-up price reduction. More information about Ministerial Discretion can be found on the Ministerial Discretion webpage.
List of Affected Drugs
A list of medicines subject to catch-up reductions and anniversary SPRs on 1 April 2023, and the indicative 1 April 2023 Approved Ex-Manufacturer Price (AEMP) can be found below.
1 April 2023 SPRs – List of Affected Drugs and Indicative pricing
Historical Statutory Price Reductions files
Historical lists of indicative anniversary SPRs can be found on the anniversary SPR webpage.
Historical lists of First New Brand (FNB) SPRs can be found on the FNB SPR webpage.
To confirm whether the SPRs applied, please cross check the indicative lists against the ex-manufacturer spreadsheet for the relevant reduction date. If you have further questions about how a catch-up SPR has been calculated, please email pbspricing@health.gov.au.
