Designated Brands

Page last updated: 25 October 2024

From 1 July 2022, brands of pharmaceutical items that are ‘designated brands’ will be subject to floor price protections under s99ADHC of the National Health Act 1953 (Cth) (the Act). Designated brands are subject to minimum stockholding requirements from 1 July 2023.

Designated brands meet one of the following criteria under s99ADHC of the Act:

  • the drug and manner of administration of the brand’s pharmaceutical item has been on F2 for at least 42 months, and at least 30 months have passed since the first price disclosure price reduction for any brand of pharmaceutical item with the same drug and manner of administration (42-month clock) (s99ADHC(1)(a));
  • the approved ex-manufacturer price (AEMP) of the brand is $4 or less (s99ADHC(1)(b));
  • the AEMP of the brand has been increased on and after 1 July 2022 through a new price agreement and the Minister has determined that the brand be designated (s99ADHC(1)(c)); and/or
  • the AEMP of the brand has received a one-off, automatic price increase on 1 October 2022 under s104B of the Act (s99ADHC(1)(d)).

Medicines that are listed in Schedule 2 of the Poisons Standard, in a quantity that is equal to or greater than the PBS quantity, are not designated brands.

In April and October of each year, the Department publishes a list of drugs and manners of administration that meet the 42-month clock (to satisfy s99ADHC(1)(a) of the Act). When listing a new medicine on the PBS, Responsible Persons can review this list to ascertain whether the drug and manner of administration currently meets that clock and will be a designated brand effective from the date the brand lists on the PBS.

The National Health Amendment (Technical Changes to Averaging Price Disclosure Threshold and Other Matters) Act 2024 (Cth) (the 2024 Amendment Act), effective from 1 July 2022, amends Part VII of the Act and clarifies the operation of certain provisions relating to designated brands. These amendments assist RPs in understanding when a brand meets the designated brand criteria under s99ADHC(1)(a) (discussed above) and clarifies the operation of the 12.5% average unadjusted price reduction test (discussed below under the heading ‘Price Disclosure reduction thresholds for designated brands’). These amendments are technical amendments only which have been made for the avoidance of doubt and do not alter the operation of provisions which have been in effect since 1 July 2022 and are described on this page. Information on these changes is available in the Clarity on Price Disclosure Reduction Thresholds and Designated Brands Fact Sheet (PDF 1.2MB) - (Word 2.5MB).

Responsible Persons who seek a price increase for a brand should be aware that if a price increase is granted, it is expected that a designated brand determination will be made which is effective from 6 months after the date the price increase is effective. See Section 5.2 of the PBS Minimum Stockholding Guidelines (PDF 143KB) for more information.

Floor price protections

Designated brands are not subject to price reductions under Part VII of the Act. That is, they will not have their prices reduced as a result of an anniversary, first new brand, combination item flow-on or price disclosure reduction (apart from designated brands with an AEMP of more than $4 that exceed the price disclosure thresholds below). The price may reduce through a price agreement between the responsible person and the Minister.

Designated brands with an AEMP of more than $4 are subject to the 30% price disclosure threshold or the 12.5% average test and 10% price disclosure threshold (see Price Disclosure Reduction thresholds below). Designated brands with an AEMP of more than $4 are subject to price disclosure reductions if they exceed one of the thresholds.

If a designated brand with an AEMP of more than $4 exceeds one of the thresholds, the price disclosure reduction will not reduce the AEMP any lower than $4. For example, if a designated brand has an AEMP of $4.50, a Weighted Average Disclosed Price (WADP) that exceeds the 12.5% average test and 10% threshold and will be subject to a 25% reduction, instead of a new AEMP of $3.38 applying, the new AEMP will be $4 and the designated brand is protected from any further price reductions.

A brand that is not a designated brand and hence not subject to floor price protections, may have price disclosure reductions (or other price reductions under Part VII of the Act) that reduce the AEMP below $4. Should this price reduction occur, the brand will become a designated brand once the price reduces to $4 or less.

Price Disclosure reduction thresholds for designated brands

A price disclosure reduction may occur when the unadjusted price reduction meets the relevant threshold. The relevant price disclosure thresholds are set out in s99ADH(1)(c) of the Act, and for designated brands are as follows:

  1. For designated brands with an AEMP of more than $4 – 30%; or
  2. For designated brands with an AEMP of more than $4, if there has been discounting averaging at least 12.5% over the last 3 data collection periods including the one for which calculations are performed and there has not been a price reduction under s99ADH of the Act – 10%.

Refer to the ‘s99ADH price reduction application decision tree’ in the Price Disclosure Reforms under the New Strategic Agreement Fact Sheet (PDF 735KB)  - (Word 444KB)and Clarity on Price Disclosure Reduction Thresholds and Designated Brands Fact Sheet (PDF 1.2MB) - (Word 2.5MB) for further information on how these price disclosure reduction thresholds are applied for designated brands.

Discounting of designated brands

The investment which has been made by the Australian Government through one-off price increases for brands with an AEMP of less than $3.50 and floor price protections is intended to support minimum stockholding requirements under Division 3CAA of the Act. This investment is not to be passed on by industry as discounts or incentives.

If discounts or incentives are provided in relation to brands with an AEMP of $4 or less, they will be apportioned to the responsible person’s brands with AEMPs more than $4, as part of the calculations which are performed in step 3A in s73A of the Regulations to determine the WADP ($) for price disclosure purposes. Further information regarding price disclosure calculations is contained in the Price Disclosure Guidelines.

Under s99AEL of the Act, if incentives are offered for brands with an AEMP of $4 or less, the Minister has powers to:

  1. delist the brand that incentives have been offered for;
  2. delist a brand or brands of any pharmaceutical item of the responsible person;
  3. refuse to list a brand or brands of any pharmaceutical item of the responsible person; or
  4. refuse to declare a legal instrument drug, form, or manner of administration for a brand supplied by the responsible person.

Further information about the Minister’s powers is outlined in s99AEL of the Act and Section 5.11 of the Price Disclosure Guidelines.

Minimum Stockholding Requirements

From 1 July 2023, designated brands are subject to the minimum stockholding requirements outlined under Division 3CAA of the Act.

If the designated brand has received a price increase on or after 1 July 2022, the Responsible Person for the brand is required to hold 6 months’ supply of the brand’s ‘usual demand’. If the designated brand has not received a price increase on or after 1 July 2022, the Responsible Person is required to hold 4 months’ supply of the brand’s ‘usual demand’. Usual demand is defined under section 85B of the Regulations.

For further information regarding stockholding requirements, see the Medicines Supply Security Guarantee page.

List of Designated Brands

List of designated brands published 1 October 2024 (Excel 259KB)

An updated designated brand list is published biannually on 1 April and 1 October. The updated list includes:

  1. A current list of designated brands as at the date the list is published.
  2. A projected list of designated brands which will be subject to stockholding requirements 6 or 12 months after the publication of the projected list, to provide advance notice for responsible persons. Any new additions to the projected list will include the date that the brand will be subject to the minimum stockholding requirements.

The designated brand list includes the number of months which is the applicable quantity of stock to be held under s99AEKC(1)(a)(i) or s99AEKC(1)(b)(i) for a brand. This will be either 4 or 6 months.

The designated brand list does not reflect any decisions made by the Minister to determine another stockholding quantity under subsection 99AEKC(2) of the Act. Where another quantity has been determined, this is the quantity of stock which the Responsible Person is required to keep for each brand under the Act. Please refer to the National Health (Minimum Stockholding) Determination 2023 which outlines designated brands that have had another stockholding quantity determined.

The list of designated brands reflects designated brands (current and projected) which are listed on the PBS as at the date of publication.

  • New designated brands which list after the date of publication, or which receive a price increase and are determined as a designated brand between the biannual updates, are not included in the projected list of designated brands until there is a subsequent update.
  • Brands which have delisted and are not included in the published list may still have outstanding stockholding disclosure obligations to fulfill and will be presented with their delisted designated brands in the Price Disclosure Submission Utility (PDSU) to provide disclosure for the relevant stockholding disclosure periods.