Explanatory Memorandum to COM(2013)168 - Transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systems - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)168 - Transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of ... |
|---|---|
| source | COM(2013)168  |
| date | 18-03-2013 |
Contents
· General context
The legislation of the Union requires a marketing authorisation to be granted by the competent EU or national authorities before any medicinal product can be placed on the market.[1] The rules in force aim to safeguard public health by ensuring that the quality, safety and efficacy of medicines are properly evaluated before these can be made available to patients in the European Union. This legislative framework also intends to facilitate trade in medicines between Member States in accordance with the principle of free movement of goods.
Meanwhile, pursuant to Article 168(7) of the Treaty on the Functioning of the European Union, Member States are responsible for the organisation of their healthcare system and for the delivery of health services and medical care, including the allocation of resources assigned to them. In this framework, each Member State can take measures to manage the consumption of medicines, regulate their prices or establish the conditions of their public funding. A medicinal product authorised in accordance with EU legislation on the basis of its quality, safety and efficacy profile may therefore be subject to additional regulatory requirements at Member State level before it can be placed on the market or dispensed to patients under the public health insurance scheme. For instance, Member States usually evaluate the cost-effectiveness of authorised medicines, or their relative efficacy as well as the short- and long-term effectiveness compared to other products in the same therapeutic class, in order to determine their price, funding and utilisation in the framework of their health insurance system.
National measures to control the funding of medicines and manage their consumption in the framework of healthcare systems are susceptible to create barriers to trade as they affect the capacity of pharmaceutical companies to sell their products in domestic markets. The settled case-law of the Court of Justice of the European Union recognises the right of Member States to adopt such measures in view of promoting the financial stability of their health insurance system.[2] However, basic conditions of procedural transparency must be met to ensure their
* N.B. Provisions which have been introduced in the proposal compared to the initial proposal are indicated in bold, italic and underlined. Deleted provisions of the initial proposal are indicated in strikethrough.
compatibility with the rules of the Treaty relating to the Single Market. In particular, pricing and reimbursement measures must be free of discrimination against imported medicinal products and based on objective and verifiable criteria which are independent from the origin of the products.
Directive 89/105/EEC codifies the minimum requirements set forth by the Court of Justice. It was adopted to enable market operators to verify that national measures regulating the pricing and reimbursement of medicines do not contravene the principle of free movement of goods. To this end, the Directive lays down a series of procedural requirements to ensure the transparency of pricing and reimbursement measures adopted by the Member States. These obligations include specific time limits for pricing and reimbursement decisions (90 days for pricing, 90 days for reimbursement or 180 days for combined pricing and reimbursement decisions). The Directive also requires the competent national authorities to provide a statement of reasons based on objective and verifiable criteria for each of their decisions and to provide appropriate legal remedies to the applicant companies.
· Grounds for and objectives of the proposal
Directive 89/105/EEC has never been amended since its adoption. Its provisions reflect the pharmaceutical market conditions which prevailed more than twenty years ago. However, these conditions have fundamentally changed, for instance with the emergence of generic medicines providing cheaper versions of existing products or the development of increasingly innovative (yet often expensive) research-based medicinal products. In parallel, the constant rise in public expenditure on pharmaceuticals in the last decades has encouraged Member States to devise more complex and innovative pricing and reimbursement systems over time.
Despite the historically positive impact of Directive 89/105/EEC on the internal market for medicines, there is evidence that it does not fully achieve its objectives in the present context:
– Firstly, a gap has emerged between the provisions of the Directive, which describe the main types of pricing and reimbursement procedures established in the 1980s, and the much wider range of cost-containment measures adopted nowadays by Member States. Despite the extensive interpretation of the Directive by the Court of Justice, the implementation of its provisions in national law and the effective enforcement of its principles, in particular by the Commission, have become particularly challenging. This situation not only results in legal uncertainties but also in a reduced transparency of national pricing and reimbursement measures, which negatively affects the smooth functioning of the internal market to the detriment of European patients and pharmaceutical companies.
– Secondly, the time limits for pricing and reimbursement decisions established by Directive 89/105/EEC are regularly exceeded by Member States. This leads to delays in the marketing of medicinal products, which in turn slows down the availability of valuable treatments for patients. In 2009, the Commission’s Competition Inquiry into the Pharmaceutical Sector recalled that Member States should comply with these time limits. The inquiry also demonstrated that unnecessary delays in the pricing and reimbursement of generic medicines delay patients’ access to cheaper medicines and increase the financial burden on Member States. The Commission therefore considered that pricing and reimbursement procedures should be shortened with respect to generic medicinal products. In addition, the sector inquiry showed that the interference of patent or safety related issues with pricing and reimbursement processes can significantly delay access to cheaper generic medicinal products.
The fundamental objectives and principles of Directive 89/105/EEC remain fully valid in the present context. Accordingly, this initiative aims at adapting the Directive to the current pharmaceutical environment while preserving its core foundations. The overall objective of the proposal is to clarify the procedural obligations incumbent upon Member State and to ensure the effectiveness of the Directive, both in avoiding delays in pricing and reimbursement decisions and in preventing barriers to pharmaceutical trade. This shall be done without affecting national social security policies, except as far as it is necessary to achieve the transparency of national procedures and the effectiveness of the internal market legislation.
· Consultation of interested parties
A public consultation on a possible revision of Directive 89/105/EEC was held from 28 March to 30 May 2011. In response to this consultation, the Commission received 102 contributions from a broad range of stakeholders including national authorities, public health insurers, individual companies and organisations representing the research-based pharmaceutical industry, the generic industry, the medical devices industry and other interested parties such as representatives of the distribution chain, health professional organisations, patients and citizens. Small and medium sized enterprises were also consulted through the Enterprise Europe Network.
A large majority of respondents recognised the positive impact of the Directive on the transparency of national procedures and the functioning of the internal market. However, many of them also pointed to its weak implementation by Member States and highlighted its shortcomings in terms of legal clarity and enforcement. Opinions differed as to the relevant actions which should be proposed by the Commission. For instance, the generic industry unanimously advocated a revision of the Directive, while research-based companies and their representative organisations favoured a soft law approach based on an interpretative Communication by the Commission.
The results of the public consultation are available at: ec.europa.eu/enterprise/sectors/healthcare Impact assessment
Responses to the public consultation were carefully considered during the impact assessment carried out by the Commission services. The impact assessment report identifies and assesses regulatory and non-regulatory options to achieve the overall objective of ensuring that adequate and effective transparency rules apply to the pricing and reimbursement measures adopted by Member States. The proposal to revise the Directive is based on the combination of options recommended in the framework of the impact assessment, namely:
– To ensure timely pricing and reimbursement decisions: options A.3/c (regular reports on pricing and reimbursement approval times), A.4/a (shorter time-limits for pricing and reimbursement decisions concerning generic medicinal products) and A.4/b (prohibition of patent linkage and re-assessment of safety features).
– To ensure the adequacy and effectiveness of the Directive in the current context: options B.3/b (extensive revision of the Directive to clarify its scope and wording) and B.4 (notification of draft national measures to facilitate enforcement).
The possible extension of the Directive to include medical devices was examined in the impact assessment but discarded due to the specificities of this market.
Furthermore, in spite of the difficulty to conclude on the overall cost-benefit balance of reducing the time limits with respect to originator medicines, a reduction from the current 90/180 days to 60/120 days is proposed in light of the positive impact it would have on the swift availability of innovative medicines to patients and on rewarding pharmaceutical innovation when medicines are approved for reimbursement. However, given the complexity of the health technology assessment (HTA) procedures, it was deemed necessary to find a more differentiated approach for the time limits; therefore, different time limits are proposed, depending on whether the medicinal products are subject to health technology assessment (90/180 days) or not (60/120 days).
The impact assessment report and its executive summary are available at: ec.europa.eu/governance/impact/ia_carried_out
· Legal basis and subsidiarity
The main objective of Directive 89/105/EEC is to facilitate the functioning of the internal market for medicinal products. The legal basis is therefore Article 114 of the Treaty on the Functioning of the European Union.
The existing Directive has as its underlying principle the idea of minimum interference in the organisation by Member States of their domestic social security policies.[6] This fundamental principle is maintained in the proposal. The proposed requirements to ensure timely and transparent decisions carefully balance the obligation to preserve the competences of Member States in the field of public health against the necessity to guarantee the effectiveness of the Directive in meeting its internal market objectives. In order to respect the responsibilities of the Member States under the Treaty, the proposal does not provide for the approximation of national pricing and reimbursement measures, nor does it restrain the ability of Member States to freely determine the prices of medicines and the conditions of their public funding on the basis of the criteria they choose. The impact assessment report explains in further detail how the subsidiarity and proportionality principles have been taken into account in the proposal.
· Overview of the main legal elements
The proposal maintains the core principles of the existing Directive but also puts forward a comprehensive adaptation of its legal provisions based on the following key elements:
– Clarification of the scope of the Directive: the transparency requirements apply to all pricing and reimbursement measures understood in a broad sense, including “demand side” measures to control or promote the prescription of specific medicines. Nevertheless, measures involving public procurement and voluntary contractual agreements with individual companies are excluded from the scope of the Directive in order to avoid interference with other bodies of law.
– Comprehensive coverage of national measures and legal clarity: the provisions of the Directive are reworded in accordance with general principles (rather than on the basis of specific national procedures) and incorporate the case-law of the Court of Justice. Several key provisions are clarified and updated to avoid interpretation controversies. In particular, it is made clear that the time limits for pricing and reimbursement decisions include all procedural steps leading to the decision, including health technology assessments where applicable.
– Adaptation of the time limits for pricing and reimbursement decisions: the time limits applicable to generic medicines are reduced to 30/60 15/30 days when the reference product has already been priced and included in the health insurance system. The time limits applicable to all other medicinal products are reduced to 60/120 days. However, in cases where national authorities subject medicinal products to health technology assessment procedures in order to assess the relative efficacy or the short- and long-term effectiveness, as an integral part of their decision-making process, the time-limits shall be 90/180 days.
– Non-interference of patent and safety issues with pricing and reimbursement procedures: the proposal clarifies that intellectual property rights should not interfere with pricing and reimbursement procedures, as is already the case for marketing authorisation procedures. In addition, elements already assessed in the framework of the marketing authorisation process (quality, safety and efficacy, including bioequivalence) may not be reassessed in the framework of pricing and reimbursement procedures.
– Dialogue and enforcement tools: different instruments are put in place to facilitate dialogue on the implementation of the Directive and to ensure its effective enforcement (consultation on draft measures at national level and pre-notification to the Commission, the creation of a remedies procedure in case of non-compliance with the time-limits related to the inclusion of medicinal products in health insurance systems).
· Repeal of Directive 89/105/EEC
The amendments proposed to Directive 89/105/EEC are substantial and cover all major provisions currently in force. For the sake of legal clarity, and in accordance with the principle of better regulation, the adoption of the proposal will lead to the repeal of existing legislation. However, the effects of Article 10 of Directive 89/105/EEC shall be maintained.
No correlation table is foreseen as the existing EU legislation referring to Directive 89/105/EEC does so in a general way without pointing to specific provisions of the Directive.
4. BUDGETARY IMPLICATION [where necessary]
The Commission's proposal has no impact on the European Union budget beyond what is already foreseen for the years to come in the Multiannual Financial Framework. The details of the financial resources are indicated in the Legislative Financial statement.
The notification of the Member States' transposition measures must be accompanied by correlation tables explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. This is necessary due to:
· The complexity of the Directive, which does not touch upon the substance but only lays down minimum procedural requirements to ensure the transparency of the measures regulating the prices of medicinal products for human use and their inclusion in the scope of public health insurance systems.
· The complexity of the transposition process due to the difficulties related to the interpretation of the Directive. The application of a set of procedural rules to the complicated architecture of the pricing and reimbursement systems is not always easy and straightforward.
· The constant evolution of national measures on pricing and reimbursement in view of controlling pharmaceutical expenditure, which makes it difficult to monitor the implementation process.
Therefore, the obligation to communicate correlation tables will facilitate the implementation process.
The proposed act concerns an EEA matter and should therefore extend to the European Economic Area.
The proposal for a Directive repealing the Council Directive 89/105/EEC was adopted by the Commission on 1 March 2012.
The European Economic and Social Committee Opinion was adopted on 12 July 2012.
Negotiations in the Council Working Party on Pharmaceuticals and Medical Devices proved to be difficult, given the politically sensitive nature of the file. Main concerns of the Member States were related to: the principle of subsidiarity; the remedies procedure (Article 8); the creation of a system of pre-notification of draft national measures to the Commission (Article 16); shortening of the time limits for taking decisions on pricing of medicines and their inclusion in the scope of health insurance systems (Articles 3, 4, 5, 7); the distinction between originator medicinal products subject to HTA and those not subject to HTA (Articles 3, 7); the obligation to consult the interested parties (Article 15).
The European Parliament adopted its position in 1st reading on 6 February 2013 with 559 votes in favour, 54 against and 72 abstentions. The European Parliament put forward amendments which provide a pragmatic compromise: while maintaining the substance of the Commission proposal, they also take into consideration the concerns expressed by the Member States.
As the result of the vote in Plenary and taking into consideration the position of the Member States in the Council, the Commission decided to amend its Proposal. The amendments of the European Parliament voted in Plenary have been duly taken into account. The Commission accepted or accepted in principle a large number of the amendments: 50 were acceptable (16 as such and 34 acceptable in principle, even if, a few of them were acceptable only in part) and only 7 were unacceptable. These 7 amendments were unacceptable because they represented a step backwards compared to the existing Directive, because they would have introduced legal uncertainty, or they would have gone beyond EU competences.