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COST RECOVERY IMPLEMENTATION STATEMENT Listing of medicines on the Pharmaceutical Benefits Scheme and designated vaccines on the National Immunisation Program 1 January 2021 to 30 June 2021 Version 1.2 Cost recovery involves government entities charging individuals or non- government organisations some or all of the efficient costs of a regulatory activity. This may include goods, services or regulation, or a combination of them. The Australian Government Charging Framework, which incorporates the Cost Recovery Guidelines (the CRGs) 1 , sets out the framework under which government entities design, implement and review regulatory charging activities. 1 The Australian Government Charging Framework and the CRGs are available on the Department of Finance website . 1.

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Page 1: Australian Government · Web viewFees for this service were first introduced in mid-2020. PB AC pre-submission meetings and S ubmission S ervices The PBAC is an independent expert

COST RECOVERY IMPLEMENTATION STATEMENT

Listing of medicines on the Pharmaceutical Benefits Scheme and designated vaccines on the National Immunisation Program

1 January 2021 to 30 June 2021Version 1.2

Cost recovery involves government entities charging individuals or non-government organisations some or all of the efficient costs of a regulatory activity. This may include goods, services or regulation, or a combination of them. The Australian Government Charging Framework, which incorporates the Cost Recovery Guidelines

(the CRGs)1, sets out the framework under which government entities design, implement and review regulatory charging activities.

1 The Australian Government Charging Framework and the CRGs are available on the Department of Finance website . 1.

Australian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of HealthAustralian GovernmentDepartment of Health

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1. INTRODUCTION

1.1 Purpose of the CRIS

This CRIS provides information on how the Department of Health (the department) implements cost recovery for:

Submissions to the Pharmaceutical Benefits Advisory Committee (PBAC) for medicines seeking to be listed on the Pharmaceutical Benefits Scheme (PBS); or vaccines to be listed on the National Immunisation Program (NIP).

Applicant-driven PBS listing and list management activities.

Before any release of a CRIS, the department engages stakeholders to discuss the financial and non-financial performance of the cost recovery arrangements. This CRIS contains financial forecasts for the rest of 2020-21 and three forward years. The department will maintain and update the CRIS as required until the activity or cost recovery for the activity has been discontinued.

Pending Government approval of Stage 2 PBS process improvements and revised cost recovery arrangements, it is expected this CRIS will apply from 1 January 2021. This CRIS applies for six months (1 January 2021 to 30 June 2021) and includes the following key changes pending implementation:

Revised fee structures to support implementation of revised PBAC initial submission categories and the new resubmission pathways;

Introduction of new fees for PBS deed management activities; and Updated fees for PBAC pre-submission meetings, Intent to Apply/Notice of Intent for Pricing (‘prior

notice’), Pricing Services and PBS list management services.

Stage 2 PBS Process Improvements

In 2017, the Australian Government signed a five year Strategic Agreement (the Agreement) with Medicines Australia, recognising the commitment of both parties’ to a viable medicines sector in Australia and a sustainable PBS.

Under clause 10 of the Agreement, a number of objectives were included to improve the efficiency, transparency and timeliness of the PBS listing processes. A revised pathways framework (the framework) was co-designed by industry and the department through the Access to Medicines Working Group – Streamlined Pathways Subgroup (AMWG-SPS) during 2017 and 2018. In August 2018, the Minister for Health endorsed the framework, which defined the process improvements required to meet the objectives of the Agreement. Given the extent of process changes to be implemented, the Minister also endorsed a staged implementation approach.

Stage 1 PBS process improvements implemented from 1 July 2019, include:

Process changes for pre submission meetings; Introduction of an Intent to Apply/Notice of Intent for Pricing (‘prior notice’) step; Introduction of positive recommendation (pricing) pathways; and Revised cost recovery arrangements.

Pending Government approval, it is expected Stage 2 PBS process improvements will be implemented from 1 January 2021 and will include:

Revised PBAC initial submission categories and introduction of a single submission date; Introduction of resubmission pathways; Revised cost recovery arrangements; and Other improvements, including IT system improvements.

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1.2 Description of the regulatory charging activityWhat is the regulatory activity being cost recovered?

Cost recovery activities and fees associated with evaluation of submissions and the listing of medicines, vaccines and other products or services on the PBS and NIP commenced on 1 January 2010. From 1 January 2010 to 30 June 2019, fees rose annually in line with the consumer price index (CPI) based on the approved 2008-09 cost model.

In 2015, the Australian Government Charging Framework and the Cost Recovery Guidelines (the CRGs) were introduced. The 2008-09 cost model was inconsistent with these requirements, therefore the department was required to undertake a full review of cost recovery arrangements, update the cost model and provide to Government for approval.

During 2017 and 2018, the department developed a revised cost model in alignment with the CRGs to ensure the model reflected the efficient costs of providing PBS/NIP evaluation and listing services to industry. The revised model also included the activities and costs associated with the first stage of PBS process improvements. This model and the revised cost recovery arrangements was approved by Government in the 2018-19 Mid-Year Financial Estimates Outlook and commenced on 1 July 2019.

To support implementation of the Stage 2 PBS process improvements, the department further reviewed and updated the 2018-19 cost model. Additional activities were identified as part of revising submission categories and the new resubmission pathways. In addition, there have been changes to all fees as a result of parameter changes which include changes to IT costs, depreciation, salary and wage costs to meet whole-of-Government requirements. In line with the CRGs, the cost model only recovers the costs of those services directly requested by sponsors.

Pending final approval, from 1 January 2021 the cost-recoverable services for PBS/NIP evaluation, listing and management are:

Australian Technical Advisory Group on Immunisation (ATAGI) pre-submission advice; PBAC pre-submission meetings; Submission services (submissions and resubmission pathways) and Intent to Apply (‘prior notice’); Pricing services (pricing pathways) and Notice of Intent for pricing (‘prior notice’); PBS list management services; and Independent reviews.

ATAGI pre-submission advice

ATAGI advises the Minister for Health (the Minister) on the NIP and other immunisation issues. In 2006, amendments to the National Health Act 1953 were made to require a positive recommendation from the PBAC in order to list vaccines on the NIP. ATAGI has been providing pre-submission advice to vaccine applicants and evaluation advice to the PBAC since that time.

Cost recoverable activities include ATAGI activity in providing advice to support the PBAC's evaluation of vaccines for the National Immunisation Program (NIP), including on clinical, technical and implementation matters. ). Fees for this service were first introduced in mid-2020.

PBAC pre-submission meetings and Submission Services

The PBAC is an independent expert body appointed by the Australian Government. Members include doctors, health professionals, health economists and consumer representatives. Its primary role is to recommend new medicines for listing on the PBS or NIP. No medicine can be listed (or have its listing amended) unless the PBAC makes a positive recommendation. PBAC has two sub-committees: the Drug Utilisation Sub Committee (DUSC) and the Economics Sub Committee (ESC) to assist with analysis and advice.

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Cost recoverable activities include pre-submission advice provided by the department to assist applicants in the development of their PBAC submission and evaluation activity to support the PBAC's evaluation of medicines for listing on the PBS. Fees for these meetings were first introduced in mid-2019. Fees for evaluation activity and advice provision to support the PBAC’s evaluation of medicines for listing on the PBS have been in place since 2010.

PBS Pricing Services (Pricing Pathways)

Pricing services include activities directly requested by applicants seeking to list on the PBS following a ‘recommended’ PBAC outcome. Pricing fees have been in place since 2010. Revised fees to support sponsor identified, individual listing requirements were first introduced in mid-2019. There are five options for finalising listing terms and conditions:

Pricing Pathway A (only applies where nominated by the PBAC and accepted by an applicant); Pricing Pathway B (new deed); Pricing Pathway C (existing deed); Pricing Pathway D (no deed); and Pricing Secretariat.

PBS List Management Services

PBS list management includes activities that are directly requested by sponsors seeking to manage their medicine’s listing. Fees were first introduced in mid-2019 for price change requests. Pending Government approval, deed-related fees will be introduced in January 2021. Activities include:

Price increase requests including brand premium requests; Ministerial discretion requests; Deed renewal requests; and Deed variation requests.

What policy outcomes will the activity achieve?

The activity for reviewing and approval of products for PBS/NIP listing and management is appropriate for cost recovery for the following reasons:

It can provide an important means of improving the efficiency and equity with which Australian Government services are provided.

Charging of fees can send important price signals to individuals or groups about the cost or value of a government activity.

The services are requested by an identifiable group of parties who derive a clear benefit for the listing of their products on the PBS or NIP.

It ensures the quality use of PBS listed medicines and the ongoing sustainability of the PBS.

This CRIS describes the cost recoverable activities that have contributed to the achievement of Outcome 4 (Program 4.3) as outlined in the 2019-20 Health Portfolio Budget Statement.

Outcome 4: Individual Health Benefits

Access to cost-effective medicines, medical, dental and hearing services, and improved choice in health services, including through the PBS, Medicare, targeted assistance strategies and private health insurance.

Program 4.3: Pharmaceutical Benefits

To provide reliable, timely and affordable access to cost-effective, high quality medicines and sustainable pharmaceutical services to all eligible Australians, through the subsidisation of the cost of medicines through the PBS and Life Saving Drugs Program (LSDP) and funding for community pharmacy programs through the Seventh Community Pharmacy Agreement. Why is charging appropriate for the regulatory activity?

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Cost recovery involves government entities charging individuals or non-government organisations some or all of the efficient costs of a specific government activity. This may include goods, services or regulation, or a combination of these. In 2015, the Australian Government implemented revised CRGs which set out the framework under which government entities design, implement and review cost-recovered activities.

The Australian Government Charging Framework applies to non-corporate and corporate Commonwealth entities as defined in the Public Governance, Performance and Accountability Act 2013 (PGPA Act). The department is a non-corporate Commonwealth entity.

The Australian Government’s cost recovery policy is that, where appropriate, non-government recipients of specific government activities should be charged some or all of the cost of those activities.

Who will pay the regulatory charges?

The PBAC considers medicine/vaccine applications and considers the views of medical bodies, health professionals, individual consumers of medicines and their representatives. Applicants are direct beneficiaries of having their medicine listed and maintained on the PBS/NIP as a result of these considerations.

Applicants who receive these benefits are charged fees for services provided. If cost is a barrier, applicants may apply to have the fee waived on public interest and financial viability grounds. Policies and processes relating to waivers have been approved by Government and are stipulated in the supporting regulations.

Cost Recovery Regulations

The National Health (Pharmaceutical and Vaccines—Cost Recovery) Regulations 2009 (the Regulations) provide for the following amendments effective 1 January 2021, pending final approvals:

Revised 2020-21 fees for PBAC/PBS services to reflect Government agreed fee changes. Removal of Indexation by CPI as this is inconsistent with the Australian Government Charging

Framework. Under the current Framework, fees are reviewed and updated annually in line with the charging model.

Change to lodgement timing for fee waiver or exemption request for submission or pricing services. o Fee waiver or exemption requests (including supporting evidence) would be lodged with

the prior notice (Intent to Apply/Notice of Intent). o In these circumstances, the department would issue a decision notice (and invoice if not

supported) within 15 business days of the submission due day or acceptance of a Pricing Offer Package.

o This change allows for withdrawal after receiving a (not supported) fee waiver or exemption decision notice.

Minor amendments to pre-submission meeting acceptance requirements and notification timing to allow for meetings to be accepted upon request (not request and briefing); and notifications to be issued by the department within 20 business days where the meeting request is accepted more than 30 business days prior to the scheduled meeting date

o There is no change to the timing for lodgement of a pre-submission meeting request or briefing paper.

Re-drafting of Part 2 – Submission Services, to support implementation of revised initial submission categories and new resubmission pathways.

New provisions in Part 3 – Pricing Services, to allow pricing discussion to cease after 26 weeks and to support implementation of cost recovery for deed management services.

o This new regulation provision would allow the department to cease pricing services where there is no active negotiation after 26 weeks (6 months). In these circumstances, the department would notify the ‘responsible person’ and refund the rebate management fee component (where Pricing Pathway A, B or C applies).

New provisions in Part 3A – List Management Services to support implementation of cost recovery for deed renewal and deed variation requests.

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Minor updates to remove reference to partial fee waivers to align with the department’s cost recovery administrative processes. Consistent with current practice, where an applicant meets the eligibility criteria for a fee waiver, the fee/s are waived in full.

Removal of Schedule 2 – Medicinal Preparations as it is no longer required. Item 2 of Schedule 2, glucose indicator strips have been removed from the PBS. Item 1 of Schedule 2, Somatropin (growth hormone) will be referred to in the amended regulations by name.

2. POLICY AND STATUTORY AUTHORITY TO COST RECOVER

2.1 Government policy approval to cost recover the regulatory activityWhen and what did the government announce?

In the 2008-09 Budget, the Government announced that costs associated with the listing of medicines on the PBS and designated vaccines for the NIP would be recovered from applicant submissions to the PBAC. Cost recovery, via fees for services provided, commenced on 1 January 2010 and was indexed by CPI up until 2019.

The 2018-19 MYEFO measure: Improving Access to Medicines — streamlined listings provided Government approval for the first stage of PBS process improvements and related cost recovery. Following stakeholder feedback and to reduce the impact on applicants, Government agreed to the staged increase of existing fees (50% in July 2019 with the remaining 50% in July 2020). Existing costs were also revised to reflect the true and accurate costs of services provided to industry during the PBS listing process of 2019.

In June 2020, Government agreed to implement ATAGI fees from 1 July 2020, and to further delay implementation of deed management fees.

Government approval is pending for the second stage of PBS process improvements and consequential cost recovery arrangements including new fees for deed management activities, expected to commence 1 January 2021.

Regulatory activities undertaken but not charged – PBS levy related activity

Consultation with industry on full cost recovery in early 2018 included the application of a PBS listing levy for activities where the work undertaken cannot be directly attributed to an individual sponsor. Under the Australian Government Charging Framework, these types of costs can be applied as an annual levy.

For example, activities such as maintaining the currency of information about the medicine and ensuring the medicine’s price is compliant with the legislation ensure the ongoing clinical and cost effectiveness of PBS medicines and Australian patients’ ongoing access to medicines. These activities are of benefit to private beneficiaries, and under the CRGs, should be funded by those beneficiaries.

A levy would apply to each PBS listed medicine and total approximately $5 million per annum in cost recovered revenue. During consultation, industry raised strong concerns about the additional cost and being charged for these non-requested activities (e.g. price disclosure and statutory price reductions). Consultation also determined there would be an impact on listings on the PBS under this proposed approach.

In 2018-19, the Government decided not to apply a PBS listing levy and relevant activities will continue to be funded via an appropriation to the department. This partial cost recovery approach will need to be reviewed in the near future as part of any review of the cost recovery costing model and underlying activity.

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2.2 Statutory authority to charge

Section 99YBA in Division 4C—Cost recovery of the National Health Act 1953 provides for regulations setting out the fees to be charged to recover costs to the Commonwealth of providing certain services. The regulations may make provisions in relation to services outlined in Section 9B (provision of vaccines) and Part VII (pharmaceutical benefits) of the Act.

The National Health (Pharmaceuticals and Vaccines – Cost Recovery) Regulations 2009 (the Regulations) provide authority for cost recovery charges for services provided to list and manage items on the PBS/NIP.

3. REVISED COST RECOVERY MODEL

3.1 Key changes to regulatory activities effective 1 January 2021, pending final approval The key changes to regulatory activities are defined below and detailed in the amendments to the Regulations effective 1 January 2021, pending final approvals:

3.1.1 Revised PBAC submission categories and introduction of a single submission date

Categories 1, 2, 3 and 4 are pending Government approval and will replace the previous ‘major’ and ‘minor’ submission types. In addition, all submissions requiring consideration by the PBAC will be lodged on the same day (day 1 of the PBAC cycle).

The revised submission categories have been established to:

Provide greater transparency on the complexity and activities required to assess the different submission types coming forward for PBAC consideration.

Reduce cross-subsidisation of evaluation fees via more granular categories. Ensure continued effective handling of submissions, focussing resources on the more complex

PBAC submissions. Align work effort and resourcing with the cost recovery fees.

PBAC (Committee) Secretariat and New Brand (Generic) submission categories remain unchanged.

Categories 1 and 2 replace the current ‘major’ submission category:

Category 1 submissions must meet one or more of the three specific Category 1 criteria. Category 2 submissions generally relate to a request for PBS or NIP listing of a new medicine or new

vaccine, a new indication of a currently listed medicine or vaccine, or to make material changes to a currently listed indication; and do not meet the criteria for a Category 1 submission.

All (previously major-type) submissions will be considered Category 2 unless sponsors clearly justify how Category 1 applies against each of the criteria. The Department will validate and determine the final category.

Categories 3 and 4 replace the current ‘minor’ submission categories:

Category 3 submissions generally relate to requests to change existing listings that do not change the population, unit price or cost-effectiveness of a medicine or vaccine; and do not meet the criteria for a Category 4 submission.

Category 4 submissions must meet one or more of the seven specific Category 4 criteria.

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All (previously minor-type) submissions will be considered Category 3 submissions unless the sponsor provides clear justification against the Category 4 criteria. The Department will validate and determine the final category.

For further information on cost recovery activity for submission services including submission categories, refer to Section 3.2.3.

Submission categories also apply where an applicant is requesting reconsideration of a ‘recommended’ PBAC outcome. It is expected that reconsideration of a recommended outcome would require evaluation of clinical, economic or financial information.

3.1.2 Introduction of resubmission pathways

The Early Resolution, Facilitated Resolution, Early Re-entry and Standard Re-entry pathways to be implemented will replace previously ‘major’ and ‘minor’ resubmissions to the PBAC.

Resubmission pathways have been established to:

Support the PBAC’s decision-making process and provide a framework for the PBAC to assist applicants in the development of their resubmission;

Support access to medicines through solution-focused pathways where issues can be easily resolved;

Enable efficient use of PBAC time by focusing on more complex resubmissions; and Align work effort, resourcing and cost recovery fees.

The Standard Re-entry Pathway is the sponsor-determined (default) resubmission pathway following a ‘not recommended’ PBAC outcome.

The PBAC will nominate Early Resolution, Early Re-entry or Facilitated Resolution Pathways and the issues to be addressed as part of any further PBAC consideration. The Early Resolution and Early Re-Entry pathways allow early PBAC consideration of a resubmission at the next immediate meeting. This is similar to previous minor submission timelines.

The choice of which of the two resolution pathways will be based on the Committee’s independent assessment of the issues to be resolved and whether the medicine or vaccine provides ‘High Added Therapeutic Value’ (HATV). HATV is determined by the following criteria:

whether the drugs or medicinal preparations address a high and urgent unmet clinical need; and whether the drugs or medicinal preparations are expected to provide a substantial and clinically

relevant improvement in efficacy, or reduction of toxicity, over any alternative therapy.

The Facilitated Resolution Pathway may apply where, for medicines deemed by the PBAC to represent HATV, the PBAC can also determine that specific matters need discussion and could be resolved through a facilitated workshop. The workshop provides applicants with the opportunity to meet with one or more members of the PBAC to explore feasible options to address the issues identified by the Committee.

Following lodgement of an Early Re-entry or Early Resolution Pathway resubmission, the department will confirm only the issues identified by the PBAC have been addressed. Where a submission includes additional information, an applicant will have the option to withdraw. If the applicant chooses to proceed, the applicant’s choice and the rationale for the PBAC’s decision will be reflected in the Public Summary Document.

For further information on cost recovery activity for submission services including resubmission pathways, refer to Section 3.2.3.

3.1.3 Introduction of fees for PBS deed management

Deeds of agreement are requested by sponsors to support their application for PBS subsidy. Deeds are commercial agreements between the Australian Government on behalf of the Commonwealth of Australia and Responsible Persons (pharmaceutical companies, or sponsors), and are designed to help maintain the

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appropriateness and cost-effectiveness of listed medicines. The standard term for all deed arrangements is five years. The following deed arrangements may apply for PBS listing:

Special Pricing Arrangement (SPA): The Commonwealth may enter into confidential SPAs with a sponsor for the supply of a medicinal product formalising a ‘published’ versus ‘effective’ pricing component. The difference between the published price in the Schedule of Pharmaceutical Benefits and the price actually paid by the Commonwealth (the ‘effective’ price), is managed through a rebate arrangement.

Risk Share Arrangement (RSA): RSA deeds have been developed to address multiple types of risk. These arrangements generally involve the department recovering a percentage of expenditure once an agreed amount or subsidisation cap (‘cap’) has been exceeded. They are designed to address risks relating to overall expenditure uncertainty and cost-effectiveness and are based upon the agreed estimates.

Joint “Shared” deeds of agreement: The need for shared agreements arises when the PBAC recommends a new medicine for listing, or an extension to an existing listing on the PBS, for the same intended population as an existing medicine that already has a deed. If a new listing is required to join an existing arrangement, it will be subject to the timeframes contained in the existing deed.

A single deed management fee was previously proposed. Taking stakeholder feedback into account, three new fees apply for the management of all new deed arrangements commencing from 1 January 2021 pending final approval:

1. Rebate management fee: This fee covers rebate management activities required over the five-year deed term to maintain PBS listing arrangements. Applicants are charged this fee upfront as part of their Pricing Pathway A, B and C fee.

As outlined below, existing refund provisions in the regulations will be expanded to provide for a refund of the rebate management fee component where as part of the pricing pathway or deed renewal, a deed arrangement is not entered into. Deeds provide certainty for sponsors and the Commonwealth. Deed terms are standard for five years with very few deeds terminated early each year. It is expected that deed arrangements would not be terminated early and therefore, refunds would not occur in these circumstances.

2. Deed renewal fee: This fee is a list management fee, charged in response to an applicant’s request to enter into a new deed, at the end of the original deed term. Applicants request deed renewal services via an Application for List Management Services. The deed renewal fee also includes the rebate management fee to account for ongoing management of the deed.

3. Deed variation fee: This fee is a stand-alone list management fee, charged in response to an applicant’s request to vary the terms of an existing deed, within the existing deed term. Applicants request deed variation services via an Application for List Management Services. Applicants may seek to vary deed arrangements to support more beneficial terms and conditions (i.e. the PBAC has amended allowable risk share arrangements or widened the subsidy cap).

Standard listings on the PBS will not incur a deed management fee. For further information on deed management activity, refer to Sections 3.2.4 and 3.2.5.

3.1.4 Fee waivers/exemption applications

Pending Government approval, from 1 January 2021 fee waiver or fee exemption applications (including required evidence) must be provided at the same time as an a submission’s Intent to Apply or the Notice of Intent for Pricing form (‘prior notice’).

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In addition, the timing for fee waiver or exemption applications will align invoicing with fee waiver or exemption decision notices to allow applicants with the opportunity to withdraw an application following receipt of their decision notice.

3.2 Regulatory activities included in the model

Cost recovery fee categories are as follows, with the activity descriptions detailed in Tables 1-5:

Section 3.2.1 – ATAGI pre-submission advice (evaluation); Section 3.2.2 – PBAC pre-submission meetings; Section 3.2.3 – Submission Services including Intent to Apply; Section 3.2.4 – Pricing Services including Notice of Intent for Pricing; Section 3.2.5 – PBS List Management Services.

For the cost breakdowns of the different fee categories please refer to Table 7.

3.2.1 ATAGI pre-submission advice (evaluation)

ATAGI pre-submission advice (evaluations) are an existing service provided as part of the NIP listing process. ATAGI evaluations assess the suitability of a vaccine for the NIP. These evaluations involve the analysis and review of complex clinical, vaccinology and epidemiological data.

Cost recovery arrangements for this activity were introduced on 1 July 2020. A fee waiver or fee exemption may apply for eligible applications – refer to the Cost Recovery Administrative Guidelines and/or Part 5 of the Regulations. Waivers and exemptions requests for ATAGI advice are considered as part of the PBAC submission process.

There are two types of vaccine submissions - complex and simple:

Table 1 – ATAGI pre-submission evaluation activity description

Fee Category DescriptionNIP - Complex submissions

An ATAGI application is in the complex category if the Secretary determines that considering the application will require extensive, or complex, data analysis and review.

NIP - Simple submissions

An ATAGI application is in the simple category if the Secretary determines the application is not in the complex category.

3.2.2 PBAC Pre-submission meetings

Pre-submission meetings are an applicant-driven service for the department to provide formal (non-binding) advice to applicants on the preparation of certain submissions to the PBAC. These services are an optional component of the PBS listing process. Fees only apply where an applicant has requested a meeting.

There are two types of pre-submission meetings – first and second:

Table 2 – PBAC pre-submission meeting activity description

Fee Category DescriptionPBAC – First meeting The initial pre-submission meeting between an applicant and the department

in relation to a submission.

PBAC – Second meeting A second or subsequent pre-submission meeting applies if a first meeting has been previously convened and invoiced in relation to a submission.

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3.2.3 Submission Services including Intent to Apply

Submission services include existing cost recovered evaluation activities that are a mandatory part of the PBS listing process. Fees are charged when the Intent to Apply or submission (where an Intent to Apply exception applies) is lodged with the department.

An Intent to Apply must be lodged for all submissions to the PBAC. The Intent to Apply supports increased planning time which will permit the progression of all submissions through to the PBAC in a timely way, by allowing time to prepare and resource all incoming identified assessments to support efficiency and provide certainty.

A fee waiver or fee exemption may apply for eligible applications – refer to the Cost Recovery Administrative Guidelines and/or Part 5 of the Regulations.

Pending Government approval, revised fees to support changes to submission categories and new resubmission pathways are expected to commence on 1 January 2021. PBAC submission services are outlined below.

Table 3 – PBAC submission activity description

Initial submission Fee Category

Description

Intent to Apply (or ‘prior notice’ in the Regulations)

An Intent to Apply form must be completed and lodged with the department at least 20 business days prior to lodgment of a PBAC submission. The Intent to Apply must include the applicants nominated evaluation category based on the type of submission being lodged. The Intent to Apply fee is a non-refundable deposit that is invoiced together with the submission services fee (that generally reflects the evaluation category). An Intent to Apply form is not required for generic submissions.

Category 1 For all submissions that meet one or more of the following criteria: First-in-class medicine or vaccine for a new population.

o A first-in-class medicine or vaccine represents a drug or first vaccine candidate with a unique mechanism of action that hasn’t been considered by the PBAC.

o A new population could include a disease or medical condition not previously considered by the PBAC, or different line of treatment or extension to an existing PBS listing.

o A disease is intended to cover whole diseases when all stages and genetic subtypes are considered.

OR A drug with a codependent technology that requires an integrated

codependent submission to the PBAC and Medical Services Advisory Committee (MSAC).OR

A drug, or designated vaccine with a TGA Provisional determination related to the proposed population.

Activities include evaluation of new clinical or economic information that is supported by an economic evaluation and financial analysis, DUSC and ESC consideration. These submissions may require additional interaction between the PBAC Secretariat and either TGA representatives or MSAC Secretariat and the PBAC to progress these submission types.

Category 2 Category 2 submissions require the PBAC to assess: The magnitude of any claimed clinical improvement or toxicity

reduction or the veracity of a claim of non-inferiority; AND The incremental cost (if any); AND The comparative costs and outcomes where an economic evaluation is

required to support a claim of cost-effectiveness, cost-utility or

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Initial submission Fee Category

Description

cost-minimisation.Category 2 submissions request a PBS or NIP listing of a new medicine or new vaccine, a new indication of a currently listed medicine or vaccine, or to make material changes to a currently listed indication; and do not meet the criteria for a Category 1 submission.They may also relate to a request for the PBAC to reconsider an existing recommendation where there is a change to the clinical, economic and/or financial information most recently relied on by the PBAC. Activities include evaluation as per Category 1 and ESC consideration.

Category 3 Category 3 submissions generally relate to requests to change existing listings that do not change the population, unit price or cost-effectiveness of the medicine or vaccine that do not meet the criteria for a Category 4 submission. Although the PBAC will assess the clinical need for and clinical effectiveness of the requested listing, an economic evaluation is not necessary to support the claims made in the submission. Additionally, the financial estimates do not require the PBAC to assess any substantial financial implications for the supply of a listed medicine or designated vaccine. They may also relate to a request for PBAC to reconsider an existing recommendation where there is no change to the clinical, economic or financial information most recently relied on by the PBAC. Activities include department assessment of claims made in the submission.

Category 4 For submissions that meet one or more of the following criteria: Listing of a new pharmaceutical item of a listed medicine that has a

bioequivalence or equivalence statement from the TGA. Listing of a new formulation of a designated vaccine that has a

bioequivalence or equivalence statement from the TGA. Consideration as an exempt item. Including a listed medicine on the prescriber bag, or varying an

existing prescriber bag listing. A change/new manner of administration of a listed medicine. A change to the maximum quantity and/or number of repeats of a

listed medicine. A change or addition to the prescriber type(s) of a listed medicine.

Activities include evaluation as per Category 3, consideration by the PBAC Executive and ratification by the PBAC to streamline the process for these submission types.

Committee secretariat Committee secretariat submissions are submissions where: the requested listing changes do not require the PBAC to consider comparative effectiveness, cost-effectiveness or clinical need; there is no difference in patient safety or population for the new pharmaceutical item in the submission compared to an already-listed pharmaceutical item; and there is no financial impact associated with the proposed change to the PBS.

Generic Listing of a new brand of existingpharmaceutical item

These applications do not require PBAC consideration for listing an additional brand (a generic medicine) of an existing TGA-approved and PBS-listed pharmaceutical item. Evidence of equivalence from the TGA must also be provided. However, applications that relate to somatropin (growth hormone), are classified as Category 3.

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Resubmission Fee Category

Description

Early Resolution Pathway(optional)

This pathway applies where the PBAC has nominated it based on their independent assessment of the submission and considers the issues identified can be easily resolved and the medicine or vaccine represents HATV; and the applicant accepts the nomination via the Notice of Intent for Pricing form. Activities include out-of-session PBAC reconsideration (where possible).

Facilitated Resolution Pathway(optional)

This pathway applies where the PBAC nominates the pathway based on independent assessment and identification of the issues to be resolved through a workshop; the medicine or vaccine represents HATV; and the applicant accepts the nomination via the Notice of Intent for Pricing form. Activities include a post-PBAC meeting with the Chair to determine the workshop agenda, a workshop with PBAC members (relevant to workshop outcomes) and evaluation of new information as per Category 2 submissions.

Early Re-entry Pathway(optional)

This pathway only applies where the PBAC has nominated the pathway based on their independent assessment of the submission and considers the issues identified can be easily resolved; and the applicant accepts the nomination through the Notice of Intent for Pricing form. Activities include early PBAC reconsideration.

Standard Re-Entry Pathway

This pathway is the default pathway for resubmissions following a ‘not recommended’ PBAC outcome and also applies where: an applicant chooses not to accept the PBAC nominated pathway; or an Early Re-entry or Early Resolution Pathway has been nominated by the

PBAC and an applicant decides to address issues other than those identified by the PBAC (including a subset of issues); or

an applicant decides to lodge later than allowable for other pathways.Activities include evaluation or assessment of the claims made in the submission.

Independent Review(optional)

Independent reviews are available for applicants where the PBAC has declined to recommend the listing of a new drug on the PBS or in certain circumstances where PBAC has not recommended the listing of an additional indication of an already listed drug.

3.2.4 PBS Pricing Services and Notice of Intent for Pricing

Pricing services include existing cost recovered activities that are a mandatory part of the PBS listing process. A fee waiver or fee exemption may apply for eligible applications – refer to the Cost Recovery Administrative Guidelines and/or Part 5 of the Regulations.

A Notice of Intent for Pricing must be submitted for all pricing applications. The Notice of Intent for Pricing supports increased planning time by allowing time to prepare and resource all incoming identified pricing applications to support efficiency and provide certainty. In addition, a complete Notice of Intent assists the department with monitoring and data collection.

Following a positive recommendation from PBAC, applicants can elect to proceed to pricing services to reach a listing arrangement for the PBS. For information on NIP listing processes refer to the department’s website.

Pending Government approval, new fees for existing deed management services are expected to commence from 1 January 2021 and will apply to all new deed arrangements. As a result Pricing Pathways A, B and C include the ‘rebate management fee’.

PBS Pricing Services are outlined below.

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Table 4 - PBS pricing pathways activity description

Fee Category DescriptionNotice of Intent for Pricing (or ‘prior notice’ in the Regulations)

Notice of Intent for Pricing includes whether a sponsor intends to submit a pricing offer and by when; not submit a pricing offer; or return to the PBAC for re-consideration. Where an applicant intends to submit a pricing application, the Notice of Intent must include the pricing pathway which reflects the listing arrangements sought. The Notice of Intent fee is a non-refundable deposit that is invoiced together with the fee for pricing services.

Pricing Pathway A (facilitated)

This pathway only apply where PBAC has nominated the pathway based on the criteria in regulation 3.4 and the applicant accepts the nomination via the Notice of Intent for Pricing form. Activities include allocation of a departmental case manager, negotiation and finalisation of PBS listing arrangements and rebate management services.

Pricing Pathway B (New deed)

This pathway applies for submissions which require negotiation and finalisation of a new deed of agreement where there are no similar arrangements in place. This could include an assessment of proposed risk-sharing, managed entry and/or special pricing arrangements. Activities include negotiation and finalisation of PBS listing arrangements and rebate management services.

Pricing Pathway C (Existing deed)

This pathway applies to submissions which require third-party responsible person notification of changes to an existing deed of agreement, and/or where an applicant has received a positive PBAC recommendation to list within the scope of existing arrangements, whether these relate to the new listing or to another existing listing. Activities include negotiation and finalisation of PBS listing arrangements and rebate management services.

Pricing Pathway D (Standard listing)

This pathway applies to submissions that do not involve negotiation of a new or existing deed of agreement. Activities include finalisation of PBS listing arrangements

Pricing Secretariat An application is in the Pricing Secretariat category if it is not in the Pricing Pathway A, B, C, or D category. This category is intended for the simplest of applications. The pathway applies to changes to listings of existing medicines which do not require a new price.

Rebate management services

Includes administration of the terms and conditions of the deed of agreement to enable the PBS listing to continue and collection of processing of the rebates to the Commonwealth to enable the PBS listing to continue throughout the (five year) term of the deed. The rebate management fee is charged upfront and is included in the Pricing Pathway A, B and C fees and also when a deed is renewed.

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3.2.5 PBS List Management Services

The PBS list management activities include applicant driven services to manage the PBS listing.

Price increase requests, brand premium requests and Ministerial discretion requests are invoiced and charged per brand of legal pharmaceutical item, which is made up of the drug, form and manner of administration.

Under the Regulations, a separate fee applies to each list management application, including in instances where multiple applications are made in a single request relating to the same drug and for the same therapy (e.g. for two different strengths).

New fees for existing deed management services are expected to commence from 1 January 2021. As a result, two new fee categories – deed renewal and deed variation have been established to cost recover the activities associated with these requests.

PBS list management services are outlined below.

Table 5 - PBS List Management requested activities description

Fee Category DescriptionPrice increase request (incl brand premiums)

Applicants may seek the Minister (or delegate) to consider a request a price increase for a particular product listed on the PBS.

Ministerial discretion request

Applicants may seek the Minister (or delegate) to consider the statutory price reduction or cumulative effects of other price reductions are not to apply.

Deed renewal request Applicants may seek to renew a deed agreement at the cessation of the existing five year deed term. Activities include re-negotiation and on what terms the existing deed should be renewed under s85E of the National Health Act 1953 and rebate management services.

Deed variation request Applicants may seek to vary the terms of an existing deed (within the current deed term). Activities include negotiation of the terms the existing deed should be varied under s85E of the National Health Act 1953.

3.3 Costs of the regulatory charging activityPending Government approval, for the remainder of the 2020-21 financial year, the total regulatory effort required by the department to deliver the fee for service activities (under full cost recovery and with stage 2 changes) from 1 January to 30 June 2021 is estimated to be $17.81 million.

The current cost recovery regulations provide waivers and exemptions for sponsors if their submissions satisfy the criteria. Based on the past three year average for waivers and non-orphan exemptions granted, the estimated annual cost waived is approximately $2.68 million. This also includes estimated initial orphan drug exemptions (see Section 2.1).

The revised volume, costs and associated cost recovery revenue are updated reflecting current processes.

Table 6 - 2020-21 fees with estimated volumes and revenue for 1 January 2021 to 30 June 2021 pending final approval.

Charge Type Fee fromJanuary 2021

Estimated Volume

Estimated Revenue for 1 Jan – 30 Jun 2021

($m)ATAGI Pre-submission Evaluation

Complex Submission Fee $180,950 2 $0.27Simple Submission Fee $103,270 2 $0.16Pre-Submission Meetings

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Charge Type Fee fromJanuary 2021

Estimated Volume

Estimated Revenue for 1 Jan – 30 Jun 2021

($m)1st Pre-Submission Meeting Fee $15,580 30 $0.472nd Pre-Submission Meeting Fee $21,180 5 $0.11Intent to Apply Submissions Intent to Apply/Notice of Intent Fee $430 144 $0.06Submission Services (PBAC Evaluation) Category 1 Fee $222,910 8 $1.78Category 2 Fee $168,270 24 $4.04Category 3 Fee $42,590 17 $0.72Category 4 Fee $33,280 16 $0.53Resubmission - Standard re-entry Fee $166,220 12 $1.99Resubmission - Facilitatedresolution pathway Fee $238,230 1 $0.24Resubmission - Early resolution Fee $41,400 3 $0.12Resubmission - Early re-entry Fee $41,250 9 $0.37Secretariat Submission Fee $12,300 3 $0.04Generic Submission Fee $6,450 80 $0.52

PBS Pricing Services Pricing Pathway A* Fee $140,980 3 $0.42Pricing Pathway B* Fee $111,490 4 $0.45Pricing Pathway C* Fee $73,660 10 $0.74Pricing Pathway D Fee $19,870 13 $0.26Pricing Secretariat Fee $12,740 3 $0.04

PBS List Management Services Deed Variations Fee $1,970 3 $0.01Deed Renewals* Fee $10,330 11 $0.11Price Increases Fee $5,040 185 $0.93Ministerial Discretion Request Fee $7,040 7 $0.05Total $14.57

# The Intent to Apply/Notice of Intent fee is payable in addition to the fees specified in the table above.* These fees include the five year rebate management fee of $8,275.

In line with the CRGs, the Stage 2 activity based costing model includes the following costs2:

Direct costs: allocation of direct costs included in this model are staff salaries (including on-costs for superannuation and leave) for those directly involved in the activity, committee costs and supplier costs (e.g. contractors, consultants and legal).

Indirect costs: cannot be easily linked or where tracking this outweighs the benefits. Indirect costs are allocated as overheads for staff directly involved in performing the activities using the Department of Finance’s approved costing methodology. Indirect costs include staff training and development, workers compensation premium, human resources support, organisational services, desktop ICT services and property operating expenses.

Other costs: IT system maintenance and depreciation costs associated with the PBS/NIP listing processes.

Activity based costing methodology has been applied to allocate costs to activities and outputs using volume-based cost drivers. This method enables more informed analysis of the efficiency of outputs and business processes. Costs were estimated on the following basis:

The regulatory activities to be delivered were identified in consultation with relevant staff. PBAC costs were estimated based on the number of members and meetings, and include

wages/salary of members, travel allowances, accommodation, flights and catering as applicable. The number of submissions per year is the average number of submissions for the past three years. Supplier costs were based on signed contracts.

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Staff costs/overheads include salaries as recommended by the Department of Finance.

List management fees have increased due to parameter changes including: IT and depreciation costs and changes to departmental salary and wages in line with Government requirements. There has been no change to existing list management activities however, price increase and ministerial discretion fees now include IT build costs which has significantly increased the direct costs associated with these services.

Table 7 - Unit cost per activity with breakdown

Unit Cost per Activity 2020-21 Direct Costs Indirect Costs Other Total Cost

ATAGI Pre-submission Evaluation Complex Submission $121,200 $1,720 $58,030 $180,960Simple Submission $72,640 $1,170 $29,460 $103,270

PBAC Pre-Submission Meetings1st Pre-Submission Meeting $13,100 $1,920 $560 $15,5802nd Pre-Submission Meeting $17,840 $2,590 $750 $21,180

Prior NoticeIntent to Apply/Notice of Intent $360 $60 $20 $430

Submission Services (PBAC Evaluation)Category 1 $204,230 $14,410 $4,280 $222,910Category 2 $157,110 $8,580 $2,570 $168,270Category 3 $37,190 $4,160 $1,250 $42,590Category 4 $28,120 $3,970 $1,190 $33,280Resubmission - Standard re-entry $154,990 $8,640 $2,590 $166,220Resubmission - Facilitated resolution pathway $225,070 $10,160 $3,000 $238,230Resubmission - Early resolution $35,780 $4,330 $1,290 $41,400Resubmission - Early re-entry $35,660 $4,310 $1,290 $41,250Secretariat Submission $10,190 $1,570 $540 $12,300Generic Submission $5,350 $860 $250 $6,450

PBS Pricing ServicesPricing Pathway A* $117,590 $18,420 $4,960 $140,980Pricing Pathway B* $93,060 $14,600 $3,820 $111,490Pricing Pathway C* $61,480 $9,780 $2,400 $73,660Pricing Pathway D $16,530 $2,570 $770 $19,870Pricing Secretariat $10,620 $1,580 $540 $12,740

PBS List Management ServicesDeed Variation Request $60 $10 $1,890 $1,970Deed Renewal Request* $6,750 $1,780 $1,800 $10,330Price Increases $4,190 $660 $200 $5,040Ministerial Discretion Request $5,930 $860 $250 $7,040

* These fees include the five year rebate management fee.

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Table 8 below details the fee pay points supporting a consistent approach of upfront payment across all charging categories for PBS listing and management processes. These fee pay points occur prior to activity being undertaken and costs being incurred by the department.

Table 8 – PBS Listing and Management Process with Cost Recovery Fee Point

Category ATAGI Pre-submission Evaluation ProcessATAGI Pre-submission Evaluation services

Application receivedATAGI Pre-submission Evaluation Fee Point

ATAGI AssessmentATAGI advice

Category PBS Listing ProcessPBAC Pre-submission meetings

Request for pre-submission meeting receivedPre-submission Meeting Fee Point

Pre-submission meeting with sponsorReview sponsor meeting outcome record

Submission services (PBAC evaluation)(Submission categories and Resubmission Pathways)

Intent to apply form received informing of submission evaluation typeIntent to apply and application Lodgement Fee Point*

PBAC EvaluationPositive PBAC Recommendation

(Proceed to positive recommendation pathways)OR

Rejected PBAC Recommendation (Proceed to resubmission pathways)Pricing services PBAC positive recommendation

Notice of Intent form received informing of the positive recommendation pathway

Notice of Intent and Positive Recommendation Pathway Fee PointPricing offer made

Pricing agreement reachedAdjustment to the invoicing based on the pricing agreement reached**

Listing occursCategory PBS Post Listing Process

List Management Services Request for post listing activity (i.e. price increases, or ministerial discretion) received

Post Listing Fee PointActioning the requested post listing activity

* Any submissions not requiring PBAC’s consideration (see Item 3, 4, 5 in the table ‘Fee for providing submission services’ in the Regulations 2.2) will be invoiced within 10 business days of the request for services.**Pathway A, D, Secretariat Pathway – invoice is to be paid in full; if Pathway B or C selected – sponsor is invoiced the Pathway C (existing deed) fee and an adjustment can be made (if needed) once the final pricing agreement is reached.Cost recovery fee points are underlined in red text.

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4. STAKEHOLDER ENGAGEMENTOn 12 February 2020, the department hosted a public webinar to launch consultation on proposed cost recovery arrangements for stage 2 PBS process improvements. The consultation period closed on 16 March 2020, 8 submissions were received in response to the department’s consultation paper. A summary of feedback and how it is addressed is outlined below.

Table 9 - Summary of consultation feedback

Consultation feedback ResponseThe magnitude of the increase in fees across all charging categories and impacts on sponsors.

The proposed Stage 2 fees have been developed to meet the requirements of the Australian Government Charging Framework and as a result there has been some change in the way we apportion indirect and direct and other costs. This has meant some fees have reduced, while others have increased due to parameter changes.

With the exception of PBAC pre-submission fees, fee waivers can be applied for across all charging categories where sponsors face financial viability concerns (and can demonstrate the listing is in the public interest) – refer to the Cost Recovery Administrative Guidelines and/or Part 5 of the Regulations.

Further consultation on deed management fees prior to introduction is needed

Section 3.1.3 outlines the department’s revised implementation approach for deed management fees, including when and how these fees are invoiced and charged.

The department has continued to consult with industry through representative groups to directly address concerns. Following implementation, the department will monitor the number of deeds that cease before 5 years.

Clarification of how list management fees are charged for medicines

Section 3.2.5 includes additional information to clarify how list management fees are invoiced and charged under the existing arrangements as per the Regulations.

Further information is also provided in the Cost Recovery Administrative Guidelines available on the PBS website. There has been no change to how list management fees are charged since 1 July 2019.

Transparency of fee breakdowns

Table 7 provides fee breakdown information for all fees.

Clear category definitions

Section 3.2.3 outlines submission category activity descriptions.

Stage 2 changes will be supported by revised Procedure Guidance, regulation amendments, changes to the PBS cost recovery website and Cost Recovery Administrative Guidelines.

Mechanism for PBAC re-consideration of a recommended outcome.

Resubmission pathways apply to submissions with a ‘not recommended’ PBAC outcome. Submissions with a ‘recommended’ PBAC outcome are eligible for a Pricing Pathway.

Where an applicant would like to return to the PBAC for re-consideration, they must advise the department through the Notice of Intent for Pricing form and follow the PBAC submission process.

Following implementation of changes, the department will monitor the number of submissions with a ‘recommended’ outcome, seeking PBAC re-consideration using the Notice of Intent for Pricing form.

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5. FINANCIAL ESTIMATESThe forecast expenses of the partial cost recovery approach within this CRIS along with the estimated revenue for the second half of 2020-21 (for the period from 1 January – 30 June 2021 pending implementation of Stage 2) and three forward years are in Table 10 below.

There is an ongoing net loss of revenue (and need for additional Government appropriation to the department to cover the shortfall). Forward projections demonstrate the difference between expenses and revenue increases every year.

Should there be any change to the underlying cost recovery model, a new financial estimates table will be provided.

Table 10 – Financial estimates for PBAC cost recovery activities for the second half of 2020-21 and three forward years

Forecast Financial Estimates 2020-21 ($ million)

2021-22 ($ million)

2022-23 ($ million)

2023-24 ($ million)

Combined Expenses = X $17.81 $36.16 $36.81 $37.42 Combined Revenue = Y $14.17 $28.78 $29.37 $29.85 Balance = Y - X ($3.64) ($7.38) ($7.44) ($7.57)Cumulative Balance ($8.16)* ($15.54) ($22.98) ($30.55)

*The cumulative balance includes the balance from the first half of 2020-21 under Stage 1. This can be calculated by talking the cumulative balance from the forecasted cumulative balance for 2020-21 from V1 of this CRIS and dividing it by two to represent the first half of the financial year.

6A. FINANCIAL PERFORMANCE

Table 11 below will be updated after each financial year to report on the actual financial performance. The forecast financial performance as published in the CRIS will be compared with the actual financial performance for each financial year. Any variance greater than 5 per cent will be identified and explained.

As PBS/NIP listings are only partially cost recovered, the aim of comparing the actual financial results with forecasted financial estimates over a 5-year period is to ensure that the degree of alignment of under-recovery of costs is as agreed by the Australian Government as part of the department’s financial balance management strategy.

Table 11: Financial performance for cost recovered activities

Actual Financial ResultsForecast 2019-20 2020–21 2020–21 2021–22 2022-23

2019-20 ($ millions) ($ millions) ($ millions) ($ millions) ($ millions)

Expenses = X 32.20

Revenue = Y 21.73

Balance = Y – X(negative deficit) ($10.47)

Cumulative balance(negative deficit) ($10.47)

Material variance explanation

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Actual Financial ResultsForecast 2019-20 2020–21 2020–21 2021–22 2022-23

Balance management strategy explanation

6B. NON-FINANCIAL PERFORMANCE The Government’s Charging Framework has been developed to apply across the general government sector. It includes performance requirements based on Section 38 of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act), which is ‘Measuring and assessing performance of Commonwealth entities’.

The non-financial performance of the activities explained in this CRIS is monitored through a set of requirements under subsection 99YBC (5) of the Act included in the department’s annual report, consistent with the PGPA Act. The performance requirements are:3

The Secretary must, as soon as practicable after June 30 in each year, prepare and give to the Minister a report on processes leading up to the Pharmaceutical Benefits Advisory Committee consideration, including:

a) the extent and timeliness with which responsible persons are provided copies of documents relevant to their submission to the Pharmaceutical Benefits Advisory Committee

b) the extent to which responsible persons exercise their right to comment on these documents, including appearing at hearings before the Pharmaceutical Benefits Advisory Committee

c) the number of responsible persons seeking a review of the Pharmaceutical Benefits Advisory Committee recommendation

Ensuring access to cost-effective, innovative, clinically effective medicines through the PBS

Percentage of submissions for new medicines that are recommended for listing by the Pharmaceutical Benefits Advisory Committee, that are listed on the Pharmaceutical Benefits Scheme within six months of agreement of budget impact and price.

Source: 2018-19 Health Portfolio Budget Statements, p.104 and Health Corporate Plan 2018-19, p.6

2018-19 Target 2018-19 Result 2017-18 2016-17 2015-16 2014-15

80%100% 88% 85% 92% N/A

Result: Met Result: Met Result: Met Result: Met

7. KEY FORWARD DATES AND EVENTS September 2020: public consultation on revised draft 2020-21 CRIS. October-November 2020: update the CRIS to report 2019-20 actual results and consult industry on

the outcome. November 2020: publish the updated 2020-21 CRIS on Health’s website (annual requirement). 1 January 2021: new 2020-21 fees to support implemented Stage 2 process changes (pending

Government approval). March/April 2021: public consultation on draft 2021-22 CRIS. October-November 2021: update the CRIS to report 2020-21 actual results and consult industry on

the outcome. 2022: commence the department portfolio charging review for the 2023-24 Budget.

3 As outlined in the Department of Health’s Annual Report . 22.

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8. CRIS APPROVAL AND CHANGE REGISTER

Date of CRIS change CRIS change Approver

7 March 2019Compliance with Australian Government Cost Recovery Guidelines and Government approved revised cost recovery arrangements

Glenys Beauchamp, Secretary for Health

13 March 2019 Agreement to the 2019-20 CRIS V1.0 The Hon Greg Hunt MP, Minister for Health

10 April 2019 Approval for the CRIS 2019-20 V1.0 release

Senator the Hon Mathias Cormann,Minister for Finance and the Public Service

11 June 2019 Approval of the 2019-20 CRIS V2.0 The Hon Greg Hunt MP, Minister for Health

9 December 2019 Approval of the 2019-20 CRIS V2.1 updated for 2018-19 financial outcome

Adriana Platona,First Assistant Secretary, Technical Assessment and Access Division

18 May 2019 Approval of the draft 2020-21 CRIS V1.0 for consultation

Louise Clarke,Assistant Secretary, Health Technology Assessment – Policy Branch

19 June 2020 Approval of the final 2020-21 CRIS V1.0 publication Caroline Edwards, Acting Secretary for Health

24 September 2020 Approval of draft 2020-21 CRIS V1.2 for consultations

Louise Clarke,Assistant Secretary, Health Technology Assessment – Policy Branch

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