99ADHPrice reduction based on information provided under the price disclosure requirements

#### 99ADH Price reduction based on information provided under the price disclosure requirements When this section applies (1) This section applies if: (a) under section 99ADB, the Minister determines the weighted average disclosed price of a brand of a pharmaceutical item (the WADP brand) in respect of a data collection period for the brand; and (aa) the Minister, by legislative instrument, determines a day (the reduction day) for the purposes of this section in relation to the brand of the pharmaceutical item; and (b) a price agreement or price determination is in force in relation to the brand of the pharmaceutical item on the reduction day; and (c) the unadjusted price reduction for the brand of the pharmaceutical item is: (i) if section 99ADHC does not apply to the brand of the pharmaceutical item—at least 10%; or (ii) subject to subparagraph (iii), if section 99ADHC applies to the brand of the pharmaceutical item and the approved ex‑manufacturer price of the brand of the pharmaceutical item is more than $4—at least 30%; or (iii) if section 99ADHC applies to the brand of the pharmaceutical item, the approved ex‑manufacturer price of the brand of the pharmaceutical item is more than $4, and the brand of the pharmaceutical item has passed the 12.5% average unadjusted price reduction test set out in subsection (6) of this section—at least 10%. (2) For the purposes of paragraph (1)(aa), the reduction day must be: (a) 1 April or 1 October in any year; or (b) another prescribed day. Price reduction (3) If, on the reduction day, the approved ex‑manufacturer price of the brand of the pharmaceutical item would, apart from this section, be higher than the adjusted approved ex‑manufacturer price of the brand of the pharmaceutical item, then, on the reduction day, the amount of the approved ex‑manufacturer price is taken to be reduced to the amount of the adjusted approved ex‑manufacturer price for the purposes of the price agreement or price determination. > Note: If the pricing quantity of the brand of the pharmaceutical item on the relevant day is different from the pricing quantity on the reduction day, then, for the purposes of subsection (3), the adjusted approved ex‑manufacturer price of the brand of the pharmaceutical item is worked out under subsection (4A). Claimed price reduction (4) If, on the reduction day: (a) a determination under subsection 85B(3) is in force in relation to a particular pack quantity of the brand of the pharmaceutical item; and (b) the approved ex‑manufacturer price of the brand of the pharmaceutical item is reduced because of subsection (3); then, on the reduction day the claimed price for that pack quantity of the brand of the pharmaceutical item is taken to be reduced by the percentage worked out as follows:  where: > AAEMP means the adjusted approved ex‑manufacturer price of the brand of the pharmaceutical item. > AEMP means the amount that would have been the approved ex‑manufacturer price of the brand of the pharmaceutical item on the reduction day if the reduction under subsection (3) had not occurred. > Note: If the pricing quantity of the brand of the pharmaceutical item on the relevant day is different from the pricing quantity on the reduction day, then, for the purposes of subsection (4), the adjusted approved ex‑manufacturer price of the brand of the pharmaceutical item is worked out under subsection (4A). Apportioning if pricing quantity changes (4A) If the pricing quantity of the brand of the pharmaceutical item on the relevant day is different from the pricing quantity of the brand of the pharmaceutical item on the reduction day, then, for the purposes of subsections (3) and (4), the adjusted approved ex‑manufacturer price of the brand of the pharmaceutical item is taken to be the amount worked out as follows:  where: > PQ1 means the pricing quantity of the brand of the pharmaceutical item on the relevant day. > PQ2 means the pricing quantity of the brand of the pharmaceutical item on the reduction day. > WADP means the amount equal to the amount of the weighted average disclosed price of the brand of the pharmaceutical item. Section not to limit Minister’s powers (5) This section does not limit the Minister’s powers, on or after the reduction day, to make: (a) other price agreements; or (b) further determinations under section 85B; for the brand of the pharmaceutical item. 12.5% average unadjusted price reduction test (6) For the purposes of this section, a brand of a pharmaceutical item passes the 12.5% average unadjusted price reduction test if there have been 3 consecutive data collection periods in respect of which a weighted average disclosed price has been determined for any brand of the pharmaceutical item, where: (a) the percentage obtained by dividing the total of the unadjusted price reductions for a brand of the pharmaceutical item in respect of each of those data collection periods by 3 is at least 12.5%; and (b) this section did not apply to the brand of the pharmaceutical item in relation to any of those data collection periods; and (c) those data collection periods include the data collection period mentioned in paragraph (1)(a). > Note: Example: The 12.5% average unadjusted price reduction test was passed using data from the data collection periods ending on 30 September 2022, 31 March 2023 and 30 September 2023. A price reduction occurred on 1 April 2024. The next reduction day for which the 12.5% average unadjusted price reduction test could be passed would be 1 October 2025, using data from the data collection periods ending on 31 March 2024, 30 September 2024 and 31 March 2025. (7) For the purposes of subsection (6), if the Minister determines the weighted average disclosed price of a brand of a pharmaceutical item in respect of a data collection period for the brand, the unadjusted price reduction for the brand of the pharmaceutical item in respect of the data collection period is the unadjusted price reduction for the brand of the pharmaceutical item when the determination came into force. > Note: See subsection 99ADB(4). (8) For the purposes of paragraph (6)(b), this section did not apply to the brand of the pharmaceutical item in relation to any of those data collection periods if the approved ex‑manufacturer price of the brand of the pharmaceutical item had not been reduced under subsection (3) as a result of calculations using data from any of those 3 data collection periods. (9) Subsection (8) is included to avoid doubt.