4. Medicines,medicinal preparations or vaccines
This category of resource item refers to all medicines, medicinal preparations or vaccines used as part of, or as a by-product of, nonhospital treatment with the proposed product or its main comparator. The category covers medicines and medicinal preparations to be considered for listing on the PBS, and vaccines to be considered for listing on the National Immunisation Program.
This category does not include medicines or medicinal preparations that are prescribed or used in an inpatient public hospital setting that are not subsidised through the PBS – these are referred to in Section 6 ‘Hospital services’.
4.1 Proposed medicine, medicinal preparation or vaccine
Except for Subsection 4.1.3, the ‘proposed medicine, medicinal preparation or vaccine’ refers to the medicine, medicinal preparation or vaccine that is the subject of the application for listing on the Schedule of Pharmaceutical Benefits, as identified on the Department of Health form PB11, ‘Application to list a drug or medicinal preparation as a pharmaceutical benefit’. The current PB11 form is available from the department’s website.
The PB11 form requires the applicant to propose an approved wholesaler price (ex‑manufacturer price), which constitutes the formal application for PBS listing.
Depending on the dispensed settings described in Subsections 4.1.1–4.1.2, the dispensed price for maximum quantity (DPMQ) or the dispensed price for maximum amount (DPMA) may constitute any number of the following:
- the approved ex-manufacturer price (AEMP)
- a wholesale mark-up
- a pharmacy mark-up
- the relevant fixed dispensing fee
- any other fees associated with dispensing.
For more information, refer to the explanatory notes on the department’s website.
Following PBAC recommendation of a medicine, medicinal preparation or vaccine for listing, the sponsor and the department may negotiate a price other than the dispensed price. Such negotiations may lead to agreed prices based on average or weighted pricing techniques.
It is possible to have only a single price for a medicine or medicinal preparation on the PBS. If different prices are determined for different PBS restrictions, the final PBS price will be weighted between the various prices based on estimates of use across the various restrictions.
In some cases, the price for the proposed medicine or medicinal preparation is determined on the basis of cost minimisation, and the main comparator is a PBS-listed medicine that has a special pricing arrangement with a confidential effective price. In these situations, use the DPMQ or DPMA in the current Schedule of Pharmaceutical Benefits to establish the price until the department can reveal the effective price.
To determine whether a PBS-listed product has a special pricing arrangement, consult the notes for that product in the current Schedule of Pharmaceutical Benefits available on the department’s website.
4.1.1 Proposed medicine or medicinal preparation for supply as a pharmaceutical benefit under s85 of the National Health Act 1953
Where an s85 PBS listing is being sought, the price for the proposed medicine or medicinal preparation is the equivalent of the DPMQ as defined in the Schedule of Pharmaceutical Benefits.
Community pharmacy setting
Where a medicine or medicinal preparation is dispensed in the community pharmacy setting, the DPMQ is determined by the following:
- the AEMP
- a two-tier wholesale mark-up
- for an AEMP up to and including $930.06, a mark-up of 7.52% applies on the AEMP
- for an AEMP greater than $930.06, a flat $69.94 mark-up applies on the AEMP
- a three-tier pharmacy mark-up in the form of the Administration, Handling and Infrastructure (AHI) fee. Pharmacy mark-ups are updated with each Community Pharmacy Agreement and are subject to yearly indexation. Determine the current AHI fees and apply them to the List Price (AEMP inclusive of wholesale mark-up)
- the relevant fixed dispensing fee of either
- a ready-prepared fee, for a medicine or medicinal preparation that does not require further preparation or compounding, or
- an extemporaneously prepared fee (in extemporaneously prepared products, where reconstitution requires a solvent, an additional water fee is applied)
- any other relevant fees associated with dispensing, such as
- dangerous medicine fee for the supply of a Schedule 8 medicine
- wastage fee where broken packs are involved.
These fees are subject to indexation. Current fixed dispensing fees are available on the department’s website.
Private hospital setting
Where a medicine or medicinal preparation is dispensed in the private hospital setting, the DPMQ is determined by the following:
- the AEMP
- a flat wholesale mark-up of 11.1% applied on the AEMP
- a flat pharmacy mark-up of 1.4% applied on the List Price (AEMP inclusive of wholesale mark-up)
- the relevant fixed dispensing fee of either
- a ready-prepared fee, for a medicine or medicinal preparation that does not require further preparation or compounding, or
- an extemporaneously prepared fee (in extemporaneously prepared products, where reconstitution requires a solvent, an additional water fee is applied)
- any other relevant fees associated with dispensing, such as
- dangerous drug fee for the supply of a Schedule 8 medicine
- wastage fee where broken packs are involved.
These fees are subject to indexation. Current fixed dispensing fees are available on the department’s website.
Public hospital setting
Where a medicine or medicinal preparation is dispensed in the public hospital setting, the DPMQ is determined by the following:
- the AEMP
- a flat wholesale mark-up of 11.1% applied on the AEMP.
No other mark-ups or fees apply when a medicine or medicinal preparation is dispensed in the public hospital setting.
4.1.2 Proposed medicine or medicinal preparation for supply as a pharmaceutical benefit under various s100 special arrangements of the National Health Act 1953
Section 100 Highly Specialised Drugs Program (s100 HSD)
Where an s100 HSD listing is being sought, the price to be applied to the proposed medicine or medicinal preparation is the equivalent of the DPMQ as defined in the Schedule of Pharmaceutical Benefits.
Where a medicine or medicinal preparation is dispensed in the s100 HSD private hospital setting or the s100 HSD community access setting, the DPMQ is determined by the following:
- the AEMP
- a four-tier pharmacy mark-up
- for an AEMP for the listed maximum quantity of up to and including $40.00, a mark-up of 10% applies on the AEMP
- for an AEMP for the listed maximum quantity from $40.01 up to and including $100.00, a flat mark-up of $4.00 applies on the AEMP
- for an AEMP for the listed maximum quantity from $100.01 up to and including $1000.00, a mark-up of 4% applies on the AEMP
- for an AEMP for the listed maximum quantity of greater than $1000.00, a flat mark-up of $40 applies on the AEMP
- the ready-prepared fee.
There is no wholesale mark-up or other fees associated with these dispensed settings.
Where a medicine or medicinal preparation is dispensed in the s100 HSD public hospital setting, the DPMQ is determined by the AEMP. No other mark-ups or fees apply when a medicine or medicinal preparation is dispensed in the public hospital setting.
Section 100 Efficient Funding of Chemotherapy (s100 EFC)
Prescribing and dispensing arrangements for certain infused or injected chemotherapy medicines subsidised by the PBS came into effect on 1 December 2011 under the Revised Arrangements for the Efficient Funding of Chemotherapy Drugs initiative.
Reimbursement for supplying an infusion is based on the cheapest combination of vials. Calculate the price of each individual vial (base price and mark-up) to determine the cheapest combination for the quantity and dose prescribed, as outlined in the proposed settings. The per-vial mark-up is calculated as follows:
- Determine the base price for maximum amount by multiplying the AEMP of each vial strength by the number of vials required to reach the maximum amount.
- Using the base price for maximum amount, determine the total mark-up applicable for the relevant dispensed setting.
- Calculate the per-vial mark-up by apportioning the total mark-up to the individual vial. The cheapest combination of vials is determined based on the per-vial price, which is the AEMP plus the per-vial mark-up.
Where an s100 EFC listing is being sought, the price to be applied to the proposed medicine or medicinal preparation is the equivalent of the DPMA adjusted for the amount suitable for the average patient receiving the therapy. The amount for the average patient will generally be supported by data from clinical trials.
Community pharmacy setting
Under the s100 EFC, where a medicine or medicinal preparation is dispensed in the community pharmacy setting (including by approved practitioners), the DPMA is determined by the following:
- the AEMP, derived for a single vial price
- a three-tier pharmacy mark-up in the form of the AHI fee. Pharmacy mark-ups are updated with each Community Pharmacy Agreement and are subject to yearly indexation. Determine the current AHI fees and apply them to the List Price (AEMP inclusive of wholesale mark-up)
- the per-vial medicine price
- the total maximum medicine price for the infusion or patient dose (calculated based on the cheapest combination of vials)
- the applicable dispensing fees, comprising
- preparation fee
- diluent fee
- distribution/wholesale fee
- ready-prepared/dispensing fee.
These fees are subject to indexation. Current fixed dispensing fees are available on the department’s website.
Private hospital setting
Where a medicine or medicinal preparation is dispensed in the private hospital setting, the DPMA is determined by the following:
- the AEMP, derived for a single vial price
- a flat pharmacy mark-up of 1.4% applied on the AEMP
- the per-vial medicine price
- the total maximum medicine price for the infusion or patient dose, based on the cheapest combination of vials
- the applicable dispensing fees, comprising
- preparation fee
- diluent fee
- distribution/wholesale fee
- ready-prepared/dispensing fee.
These fees are subject to indexation. Current fixed dispensing fees are available on the department’s website.
Public hospital setting
Where a medicine or medicinal preparation is dispensed in the public hospital setting, the DPMA is determined by the following:
- the AEMP
- the total maximum medicine price for the infusion or patient dose, based on the cheapest combination of vials
- the preparation fee.
No other mark-ups or fees apply when a medicine or medicinal preparation is dispensed in the public hospital setting.
More information on the s100 EFC can be found on the department’s website.
Other s100 programs
Where an s100 listing is being sought under the following arrangements, the price to be applied to the proposed medicine or medicinal preparation is the equivalent of the DPMQ:
- In Vitro Fertilisation (IVF) Program
- Growth Hormone Program
- Botulinum Toxin Program
- Opiate Dependence Treatment Program.
Section 100 IVF Program and s100 Growth Hormone Program
Where a medicine or medicinal preparation is dispensed under the s100 IVF Program or the s100 Growth Hormone Program in the private hospital setting or the community pharmacy setting, the DPMQ is determined by the following:
- the AEMP
- a four-tier pharmacy mark-up
- for an AEMP for the listed maximum quantity of up to and including $40.00, a mark-up of 10% applies on the AEMP
- for an AEMP for the listed maximum quantity from $40.01 up to and including $100.00, a flat mark-up of $4.00 applies on the AEMP
- for an AEMP for the listed maximum quantity from $100.01 up to and including $1000.00, a mark-up of 4% applies on the AEMP
- for an AEMP for the listed maximum quantity of greater than $1000.00, a flat mark-up of $40 applies on the AEMP
- the ready-prepared fee.
No wholesale mark-up is associated with these programs.
Where a medicine or medicinal preparation is dispensed under these programs in the public hospital setting, the DPMQ is determined by the AEMP, and no other mark-ups or fees apply.
Section 100 Botulinum Toxin Program
Where a medicine or medicinal preparation is dispensed under the s100 Botulinum Toxin Program in the private hospital setting, the DPMQ is determined by the following:
- the AEMP
- a four-tier pharmacy mark-up
- for an AEMP for the listed maximum quantity of up to and including $40.00, a mark-up of 10% applies on the AEMP
- for an AEMP for the listed maximum quantity from $40.01 up to and including $100.00, a flat mark-up of $4.00 applies on the AEMP
- for an AEMP for the listed maximum quantity from $100.01 up to and including $1000.00, a mark-up of 4% applies on the AEMP
- for an AEMP for the listed maximum quantity of greater than $1000.00, a flat mark-up of $40 applies on the AEMP
- the ready-prepared fee.
No wholesale mark-up or other fees are associated with these dispensed settings.
Where a medicine or medicinal preparation is dispensed under this program in the public hospital setting, the DPMQ is determined by the AEMP, and no other mark-ups or fees apply.
Section 100 Opiate Dependence Treatment Program
Where a medicine or medicinal preparation is dispensed under the s100 Opiate Dependence Treatment Program, the DPMQ is determined by the AEMP, and no other mark-ups or fees apply.
4.1.3 Proposed vaccine for listing on the National Immunisation Program
Where a listing on the National Immunisation Program is being sought, the price to be applied to the proposed vaccine is the equivalent of the ex-manufacturer price, and no other mark-ups or fees apply.
4.2 Comparator and co-prescribed medicines or medicinal preparations
4.2.1 Comparisons of medicines or medicinal preparations prescribed under the PBS
Except where identified otherwise, the price to be applied to each PBS-listed medicine or medicinal preparation is the DPMQ as defined in the current Schedule of Pharmaceutical Benefits, plus any applicable premiums or charges. This applies to all non-s100 EFC settings.
In an s100 EFC setting, the price to be applied to a vial of each PBS-listed medicine or medicinal preparation is the DPMA adjusted for the amount suitable for the average patient receiving the therapy. The amount for the average patient will generally be supported by data from clinical trials.
Specify the effective date of the Schedule of Pharmaceutical Benefits used in the submission. The current Schedule of Pharmaceutical Benefits is available on the department’s website.
When the price for the proposed medicine or medicinal preparation is determined on the basis of a comparison with a PBS-listed medicine that has a special pricing arrangement (ie the effective price is confidential), use the DPMQ or DPMA in the current Schedule of Pharmaceutical Benefits until the department can reveal the effective price. To determine whether a PBS-listed product has a special pricing arrangement, consult the notes for that medicine in the current Schedule of Pharmaceutical Benefits or the relevant PBS Therapeutic Relativity Sheet, available on the department’s website.
When the same PBS-listed medicine or medicinal preparation has different prices (eg a public hospital DPMQ and a private hospital DPMQ), calculate the weighted average price based on the proportions dispensed in each setting and the relevant price for each setting – that is:
[(volume dispensed for public hospital patients´ relevant DPMQ) + (volume dispensed for private hospital patients´ relevant DPMQ)] ÷ total volume dispensed
4.2.2 Comparisons of medicines or medicinal preparations not prescribed under the PBS
For comparisons with vaccines listed on the National Immunisation Program Schedule, refer to the department’s website.
4.3 Over-the-counter medicines
Over-the-counter medicines are medicines for which no prescription is required, but whose consumption may be affected by the proposed medicine or main comparator. The unit cost for an over-the-counter medicine in an economic evaluation is the recommended retail price suggested by the manufacturer. Include and justify the origin of the details of the unit costs used in the submission. Where medicines are available both on the PBS and over the counter, use the PBS price.
4.4 Medicine delivery systems
Medicine delivery systems relate to the consumables and equipment required for the delivery of certain medicines or medicinal preparations (eg insulin pen or nebuliser unit). It is not feasible to identify and cost all such items in this manual because they are context specific. Where such items are applicable to an economic evaluation, use a price equivalent to the average price charged to the consumer, and provide details about how this price was determined.
4.5 Medicine administration costs
Additional medical service costs of administering a medicine or medicinal preparation may be included. This most commonly occurs when a medicine or medicinal preparation is administered by infusion. It does not occur with oral administration. The cost extends beyond the costs of the delivery system (Subsection 4.4).
Where an appropriate Medicare Benefits Schedule (MBS) item is available, the PBAC’s preferred approach is to use the relevant MBS Schedule Fee for administering the medicine or preparation. For example, relevant MBS items exist for administering chemotherapy medicines, sympatholytic agents, therapeutic agents to manage chronic intractable pain, immune-modulating agents and botulinum toxin. Although claiming an MBS item in some settings would not be appropriate (eg for the administration of a medicine or medicinal preparation to a patient in a public hospital), the relevant MBS Schedule Fee is the most suitable proxy for determining the economic cost across all administration settings.
If no MBS item is available for the administration of a proposed medicine or medicinal preparation, use the Schedule Fee of a standard MBS consultation item if the only purpose of the consultation is for the administration of the proposed medicine or medicinal preparation.
Use clinical judgment when selecting the MBS item relevant to the economic evaluation, and justify the item(s) selected, including with respect to:
- the duration of administration (specifically, the time during which the prescriber takes an active role in administering the medicine)
- the type of prescriber involved (eg general practitioner, specialist, consultant physician)
- whether the type of consultation is an initial or a subsequent consultation.
Justify any deviations from the MBS Schedule Fee.
If the circumstances of administering a proposed medicine or medicinal preparation suggest that a new MBS item should be established, seek the department’s advice (see contact details on page 1), because this would require a codependent submission involving the Medical Services Advisory Committee.
