News in judicial decisions on reimbursement of medicinal products

The Supreme Administrative Court of the Czech Republic (the “SAC”) addressed the issue of reimbursement of medical products in one of its recent decisions. In his decision, the SAC assessed the decision of the State Institute for Drug Control (the “SIDC”) of 5 September 2013, case SUKLS263940/2012 and came to several conclusions which are concerning the following areas: (i) review of the agreement on the agreed highest producers´ price by administrative authorities; and (ii) determination of the basic reimbursement of products during the vesting period. Below you can see a more detailed analysis of the assessed questions.

Review of the agreement on the agreed highest producers’ price by administrative authorities

In this matter, the SAC referred to an earlier judgment of the Constitutional Court of the Czech Republic, which stated that in relation to research in the public interest carried out at the determination of the amount and conditions of reimbursement of the medicinal product is the responsibility of the administrative authority (State Institute for Drugs Control) to verify, whether the agreement on the agreed price contains an obligation to ensure the availability of the product on the Czech Republics market.

In this case, the administrative authority during the assessment of agreement on the highest price (i) did not consider whether there is a realistic presumption of actual availability of the reference product and (ii) if this agreement consists an obligation to ensure availability, (iii) nor did they verify whether the subject, which executed the agreement in last two years, had not committed an offence under Section 39q (1) letters b) and c) of the Public Health Insurance Act. According to the mentioned judgment of the Constitutional Court of the Czech Republic, administrative authorities have a legal obligation to assess the public interest, i.e. they have obligation to verify whether the agreement contains an obligation to ensure product availability and that even in a situation where they intend base from the presumption of the product availability. According to the SAC, if such an obligation was not explicitly agreed in the agreement, the presumption of the availability of the product cannot be applied and it cannot be guaranteed that this reference product will be actually present in the Czech Republic´s market. In the event that the administrative authorities did not verify whether the assessment agreement contains an obligation of availability and was based only on the presumption of availability, they would have acted in clear violation of the judgment of the Constitutional Court of the Czech Republic.

The SAC stated that the condition for applying the conclusive presumption of availability is that the relevant agreement on agreed price contains unambiguous and undoubted commitment of the marketing authorization holder of the mentioned product, that he ensure availability of this product on the Czech Republic´s market in the sufficient amount throughout the efficiency of the agreement.

Determination of the basic reimbursement of products during the vesting period

In the assessed situation, SIDC set out the amount of reimbursement of the medicinal product according to Section 39c (2) letter a) of the Public Health Insurance Act. Under other provisions of the mentioned Act by implementing legislation should be stipulated, among other things, the vesting period for assessing the availability and determining the price of the producer. By this regulation is a decree, which implements certain provisions of the Public Health Insurance Act, according to which the price of a product for determining the basic reimbursement of other products is found out to the extent of 21 days from the date of initiation of the subject administrative procedure.

It is also important, that the quoted decree in Section 12 (2) explicitly excludes thus defined the vesting period for the case of the procedure according to Section 39c (2) letters c) or d) Public Health Insurance Act, but not for the procedure pursuant to Section 39 (2) letter a) the same law, which the administrative authorities applied in this time assessed case. By the linguistic interpretation, the SAC came to conclusion, that is necessary to strictly distinguish between these two procedures.

The erroneous procedure had in the assessed case results that administrative authorities incorrectly came out when determining the reimbursement from agreement on agreed price with agreed delayed effectiveness. The price for the reference medicinal product, which was agreed in the agreement, became effective after the expiration of the vesting period of 21 days from the initiation of the administrative procedure, SAC nevertheless took this price into account when he was assessing the price. In addition, the consideration of the mentioned agreement was possible only due to incorrect official procedure of SAC, when the decision of SAC was not issued within the period stipulated by law. This resulted in the violation of the principles of legitimate expectations, transparency, and predictability of the result of administrative proceedings.

The Supreme Administrative Court of the Czech Republic, therefore by the new case law, that the basic reimbursement could not be set out on the basis of the price agreed in the agreement on the agreed price, whose effect was to occur in the future, even though this price was lower than the price of others products, which were included in the price comparison, but only prices, which were valid during the vesting period can be taken into account. According to the SAC “Although it is possible to understand the complainant´s point of view (SAC), according to which it may be more advantageous from the term of the public health insurance system and the interest of insured persons to take into account, when determining the price the current state,  at the time, when the administrative decision is taking. However, during application of the relevant legislation, it cannot be disregarded that if the rules for determining the vesting period should fulfil their purpose, which consists, inter alia, in maintaining predictability and transparency of decision-making in a given area of the exercise of public authority, it must be in advance clearly determined the vesting period, which in addition shall be set out strictly and shall not allow any discretion of the administrative authority, that might in an unpredictable way affect to the rights of the parties in proceedings.”

MoH approved Clinical Trial Agreement template in CZ and SK

We would like to inform you that, on 3rd May 2019, the Ministry of Health of the Czech Republic published on its website a Methodological Guideline on the Content of a Clinical Trial Agreement of a clinical trial of medicinal products for human use dated 30th April 2019, which includes a template Clinical Trial Agreement. The Ministry requested all clinical trial sponsors and healthcare providers involved in clinical trials to use such a template agreement as much as possible. The guideline is applicable to all Ministry-directly-managed hospitals (all of the major ones).

The template agreement is designed as a 3-party agreement between a sponsor, a site and an investigator. The agreement is bilingual (Czech and English) and reflects relevant EU and Czech legislation as well as key GDPR aspects.

The main objective of this template agreement is to shorten and simplify the process of executing a clinical trial agreement between sponsors and healthcare providers. The use of a template agreement should also lead an increase in the number of clinical trials performed in the Czech Republic and to the improvement of the Czech Republic’s position in international competition in clinical research. The Ministry’s ideal is that if the agreement will not be amended, it should be automatically accepted by the Ministry directly-managed hospitals.

The Methodological Recommendation in question is available on the website of the Ministry of Health of the Czech Republic, in the section “Legislation” and in the subsection “Clinical trial” (http://www.mzcr.cz/Legislativa/obsah/klinicke-hodnoceni_4016_11.html).

The Ministry of Health of the Slovak Republic approved a similar template Clinical Trial Agreement. The template agreement is a part of the Order of the Minister of Health No. 4/2018 and it is available on the website of the Ministry of Health of the Slovak Republic which is available on the website of the Slovak Ministry of Health (https://www.health.gov.sk/Clanok?Prikaz-4-2018). The Order of the Minister, with respect to the template agreement, is effective from 1st June 2019.

Our office was involved in the preparation of both of the agreements in the Czech Republic and Slovakia.

Please do not hesitate to contact us in case of any questions via our email (info@kastnerpies.cz).

Proposal for emergency distribution channel of pharmaceuticals in Czech Republic

The Czech Ministry of Health (“MoH”) is currently working on a draft legislation implementing an emergency distribution system (inspired by the Slovakia where something similar was introduced in April last year) that should, in the opinion of the MoH, prevent re-export of medicinal products from the Czech Republic and improve availability of the medicinal products on the Czech market. The MoH would like to introduce a specific emergency distribution channel based on which a pharmacy could order a medicinal product directly from the MAH if it cannot be reliably supplied through a standard distribution channel. The whole system is introduced in reaction to repeated complaints from pharmacies regarding unavailability of various medicinal products that are the subject of parallel trade.

The emergency distribution system should work in a way where MAH will have to establish and operate an electronic information emergency system for ordering of Rx products. If a pharmacy cannot procure a medicinal product from a distributor, it will be able to order it through the emergency system. The marketing authorization holder will be obliged, on the basis of this order, to supply the pharmacy with the required medicinal product within two working days of receipt of such order. If the marketing authorization holder fails to comply with this obligation, it will may be subject to significant fines. The draft amendment also provides exemptions from the obligation to supply a medicinal product, for example in case of the reported outage based on objective obstacles.

In relation to the emergency channel, the MoH intends to introduce additional measure that should ensure better availability of medicinal products (only for those with reimbursement) for Czech patients. Specifically, same as in Slovakia, the MoH will introduce a statutory provision based on which reimbursed medicinal products may only be exported to another country with express MAH’s consent. Therefore, the MAH will be fully responsible for assessing the availability of his medicinal product on the Czech market and, if it is not endangered, the medicinal product may be exported abroad with his consent.

The proposal of the Ministry of Health needs to go through the whole legislative process and it is expected to be effective in the course of the next year or beginning of 2020. However, especially the second part (related to consent with export of products) is criticized since it may constitute a competitive issue and violation EU competition law. From our experience in Slovakia, this right of the MAHs is rarely used as there is a potential risk of competition law consequences, even on the EU level.

The concrete text of the statutory amendments is not yet published and the information above is result of information communicated by the MoH’s representatives and thus maybe subject of additional changes.