First New Brand Price Reductions

Page last updated: 1 December 2024

In accordance with Division 3A of Part VII of the National Health Act 1953 a first new brand statutory price reduction (FNB SPR) will apply when the first new brand (new brand) of a pharmaceutical item (trigger item) that is bioequivalent or biosimilar and has the same manner of administration (MoA) as an existing pharmaceutical item (existing item) is listed on the Pharmaceutical Benefits Scheme (PBS). 

The criteria for a FNB SPR applies irrespective of the formulary status of the drug. When the FNB is listed for a drug that is in F1, the drug becomes multi-branded and moves from F1 to the F2 formulary. Some older drugs in F2 may also meet the criteria for a FNB SPR.

Application of FNB SPRs

Refer to the First New Brand Statutory Price Reduction Policy (PDF 381KB) - (Word 351KB) for details about the application of a FNB SPR, such as what percentage reduction will apply, including where the existing brand has an effective price, how the reductions are flowed-on to combination items and related brands, how to apply to list a first new brand on the PBS and obligations for first new brands such as guarantee of supply.

Ministerial Discretion

The Minister for Health can exercise discretion to not apply, or to reduce the magnitude of, an FNB SPR. For more information on the types of information and the matters that might be considered relevant to the exercise of Ministerial Discretion in relation to FNB SPR and the timeframes for making such an application, refer to the Ministerial Discretion web page.

History of FNB SPR reforms

As part of the PBS reforms in 2007, the 12.5% FNB price reduction policy that had operated as an administrative policy since 1 August 2005, was legislated. Through further reforms, the FNB SPR increased from 12.5% to 16% on 1 February 2011, then again from 16% to up to 25% on 1 October 2018.

From 1 July 2022, the National Health Amendment (Enhancing the Pharmaceutical Benefits Scheme) Act 2021 gives effect to the reforms in the Strategic Agreement with Medicines Australia and the Generic and Biosimilar Medicines Association. Amongst other things, the amendments to SPRs ensure that FNB SPRs automatically apply to existing pharmaceutical items, so new price agreements under section 85AD of the Act will not be required.

Note:

  1. From 1 March 2024 the First New Brand Price Reductions will be provided as an Excel file.
  2. Changes for this month are highlighted.
  3. Some drug names have changed as a result of the Therapeutic Goods Administration’s International Harmonisation of Ingredient Names reform to bring medicine ingredient names in line with international nomenclature. These changes will have no material impact on the formulary allocation of drugs on the Pharmaceutical Benefits Scheme. For easy reference, medicines with name changes are indicated with a number in the Legislative Instrument Drug Name column in the table, with the corresponding endnote describing the change to that medicine.