Romania 2009 – The Year of Changes
Published in “Financier Worldwide – Biotechnology & Life Sciences Sector”, 2010
2009 was a year of major changes for the Romanian pharmaceutical sector, starting with the new legislation regarding the mode of calculation of prices for medicinal products for human use, the claw back legislation and also, among others, the amendments in the conditions of reimbursement.
At the end of January, the Ministry of Health issued a new regulation regarding the calculation of prices for medicinal products for human use, i.e., Order 75/2009 for the approval of Norms regarding the mode of calculation of prices for medicinal products for human use (the ‘Order / Order 75/2009’), order that has drawn strong reactions from the marketing authorisation holders.
The Order, which entered into force upon its publication in the Official Gazette, i.e., on 02 February 2009, has repealed the former legislation regulating the calculation of prices of medicinal products and new rules have been set forth for calculation of the prices for medicinal products for human use. Such rules apply both for medicinal products newly entering the market, and for medicinal products already existing on the market, and whose prices have already been approved in accordance with the provisions of the former legislation.
As a general principle, based on the provisions of Order 75/2009, the price for over the counter (OTC) products is set freely by the marketing authorisation holder and notified to the ministry, while for Rx products, the price is proposed by the marketing authorisation holder or its representative, and approved by the ministry, by comparison (i.e., minimum price) with the prices for the similar products in 12 European countries (Czech Republic, Bulgaria, Hungary, Poland, Slovakia, Austria, Belgium, Italy, Lithuania, Spain, Greece and Germany), or, should the product not be commercialised in any of the said 12 countries, with the price in the country of origin. The Order has also implemented the policy of price comparison between original, first generic and generic products.
Also, according to the provisions of this Order, all prices of medicinal products have to be set in Romanian currency (RON), an aspect with important practical consequences for the medicinal products imported in other currencies.
However, the provision that probably raised the most reactions from the marketing authorisation holders was the one stipulating that within 30 days from the publication of the Order in the Official Gazette (i.e., until 4 March 2009) the marketing authorisation holders for medicinal products whose prices have already been approved, or their representatives, had to file with the Ministry of Health the supporting documents (as provided by the new legislation) for re-approval of the prices in accordance with the new procedure.
Once approved, the new prices are included in the National Catalogue of Prices for Medicinal Products, and become applicable, within 60 days from the publication of the Order in the Official Gazette (i.e., 04 April 2009).
Should the marketing authorisation holder have failed to file with the ministry the supporting documents within the 30 days term, after the expiry of the 60 days term (i.e., starting 04 April 2009) the respective medicinal product could no longer be marketed in Romania. In case the supporting documents were filed after the expiry of the 30 days term, the medicinal products could be marketed only after the price is approved in accordance with the provisions of the Order, within 90 days from filing.
According to the provisions of the Order, the marketing authorisation holders for medicinal products for which request for approval of the price had already been filed with the Ministry, but no decision had been issued until the moment of entering into force of the Order, or their representatives, had to file with the Ministry of Health the supporting documents (as provided by the new legislation) within 30 days from the publication of the Order in the Official Gazette (i.e., until 04 March 2009). The prices for such products were approved in accordance with the new procedure.
As a novelty in this field, the Order provides that in case the price proposed by the marketing authorisation holder or its representative (both for medicinal products newly entering the market, and for medicinal products already existing on the market) is not set in accordance with the provisions of the Order, the respective product shall be de-listed from the list of reimbursed products, for one year.
The purpose declared by the Ministry of Health for issuing this Order was the average 10 percent decrease in the price of medicinal products for the benefit of patients – a purpose which, according to the evaluations made public by the Ministry of Health, has been attained.
Nevertheless, in consideration of the current economic crisis which has created supplementary difficulties for the producers of original medicinal products as well as for the producers of generics, in October 2009, the Ministry of Health put into public discussions an order for the modification and completion of Order 75/2009. This new draft order aims to eliminate the double reference, i.e., price of the first generic to be set by reference to the price of the original and then price of the original (new-princeps) to be set by reference to the price of such new generic, and the comparison with the lowest price for the same medicine from the list of countries for comparison. In what concerns the comparison, this is now intended to be made with the average of the three lowest prices of the same medicine as approved within the countries for comparison. Also, the reference price for the generic is made by reference to a percentage of 70 percent from the price of the innovative medicinal product, compared to 65 percent before. However, from the draft publicly available it appears that this reference price would be applicable only in the situation where the medicinal product in question does not have a registered price within the countries from the comparing list. This Order has become the object of public debate and is currently in the legislative approval process.
Another piece of legislation that has sparked strong reactions from marketing authorisation holders and legal persons actually obtaining income from commercialisation of medicinal products in Romania, was the Emergency Government Ordinance no. 104/2009 amending and completing Law no. 95/2006 regarding the reform of the healthcare system (the ‘Ordinance’) in force as of its publication in the Official Gazette, i.e., 07 October 2009 which sets forth the first claw back system on the Romanian pharmaceutical market.
The purpose declared by the government for issuing this Ordinance was to finance certain health expenses from the health insurance public system, by providing the obligation of the marketing authorisation holders and legal persons actually obtaining income from commercialisation of the medicinal products in Romania which are included in the national healthcare programs, reimbursement system sold on prescription and hospital use, to contribute to the budget of the Ministry of Health with a quarterly contribution calculated as a percentage (5 to 11 percent from the total trimester income) from the value of the cash collections from public health care system after the VAT deduction. The contributions are due as of the entry into force of the Ordinance, namely 07 October 2009.
The Ordinance is rather unclear as to the calculation basis as it makes reference either to the value of the cash collections, or the volume of sales, or incomes (Annex 14).
Moreover, it is unclear if the Ordinance refer to a total of sales, cash collection, incomes for each product, for all the products of a marketing authorisation, or legal person obtaining incomes from commercialisation in Romania of the medicinal products from the public system, respectively if this total of the incomes is calculated on a different basis for medicinal products for which a distributor is the holder of the marketing authorisation or for which it is only the distributor.
Also, no distinction is made between the products that are effectively sold within the public system and those which, although belonging to the above mentioned categories, are not sold within the public system, but to patients that are entirely paying for such.
The sanction for not complying with the payment obligation is the loss of the reimbursement right from the national unique fund for social health insurances of the value of the medicinal products mentioned above. Considering the current reimbursement system, apparently, this is an indirect sanction for the marketing authorisation holders and distributors and will probably directly affect the pharmacies.
These aspects, along with others that appear unclear, are expected to be clarified by the norms to be issued by the government for the implementation of these legal provisions.
However, it is noteworthy to mention that the claw back contribution might lead to a dramatic decrease of the profit margin of companies commercialising medicinal products in Romania.
Another piece of Romanian legislation adopted within the context of the current economic crisis is represented by Order no. 1331/905/2009 issued by the Ministry of Health and National Health Insurance House regarding the modification of Order no. 416/428/2009 for the approval of the Methodological Norms for the implementation of the Framework Agreement regarding the conditions of granting medical assistance within the social health insurance system for 2009. This order modifies, among others, the reimbursement term for the current activity in 2009 from 60 days up to 180 days from the date of validation of the invoices, according to the legal provisions in force, within the limit of the approved funds. These provisions are expected to also directly affect the pharmacies and implicitly the patients who benefit from compensated medicinal products.
According to a marketing study realised by CEGEDIM, almost 1500 pharmacies are at risk of closure next year as an effect of the prolongation of the reimbursement term, the most affected being those which realise sales of €30,000 on average per month.
2009 brought significant changes for the pharmaceutical sector, but significant changes are expected to occur in 2010 also, considering the current economic environment and the condition of the public health insurance system in Romania.