A momentary respite in European reference pricing

The judgment of the Third Chamber of the Supreme Court on October 28, 2015 has precipitated a momentary respite in European reference pricing. The resolution nullifies the Second Additional Provision of Royal Decree 177/2014, of March 21, regulating the reference pricing system and homogenous groups of medicinal products in the National Health System and certain information systems in connection with the reimbursement and pricing of medicines and medical devices. The af... The judgment of the Third Chamber of the Supreme Court on October 28, 2015 has precipitated a momentary respite in European reference pricing. The resolution nullifies the Second Additional Provision of Royal Decree 177/2014, of March 21, regulating the reference pricing system and homogenous groups of medicinal products in the National Health System and certain information systems in connection with the reimbursement and pricing of medicines and medical devices. The aforementioned provision stated that those authorized to sell presentations of medicines (or local representatives) at a weighted reference price or at the minimum threshold that were also offered at a lower price in another EU member state, must report the lower price to the General Directorate of the Basic Services Portfolio at the Ministry of Health, Social Services, and Equality. This body also has the authority to submit a review of the weighted prices and those at the minimum threshold to the Inter-ministerial Committee on Prices when it learns that a presentation in these circumstances will be sold in Europe at a lower price. The Supreme Court accepted the argument of the pharmaceutical industry on the understanding that it is “arithmetically improper to simply transfer to our system the industrial price at which the presentation is sold in another European Union country without assessing the circumstances or specificities of the various countries affected and without even contemplating parameters such as per capita income, the nature of the corresponding public health system, or eventual fluctuations in the value of currencies, aspects which are far from trivial.” This system of review, however, would be possible, according to the Court, if covered by a legal provision. In fact, the pricing review is covered by – what was at the time of appeal – Article 91 of Law 29/2006 on the Guarantees and Rational Use of Medicines and Medical Devices. This article is equivalent to Article 96 of current Royal Legislative Decree 1/2015, approving the revised text of the Law governing the Guarantees and Rational Use of Medicines and Medical Devices (with the same wording). This article provides for the modification of prices “when changes are required in the economic, technical, healthcare circumstances or in the therapeutic utility assessment,” apart from scenarios involving the review of nullified acts, the detriment of voidable acts, revocation or rectification. The law, however, contains no mention of such exceptional criteria as that established in the Additional Provision now nullified. The Judgment concludes: “It is our understanding, therefore, that the regime imposing the contested additional provision clearly exceeds its role of collaboration and necessary complement to the Law it develops, because it establishes a system of fixing and reviewing reference prices (exclusively addressing the existence of a lower sales price in an EU member country) not covered or contemplated in the applicable legal precepts, given that under these precepts, such a price determination (either fixing or reviewing them) requires the concurrence of certain assumptions, from which that established in the additional provision is excluded, and moreover, the adoption of a resolution (motivated by and based on objective criteria) that cannot be exercised exclusively in a circumstance not contemplated by law.” The obligation of the affected laboratories to report lower European prices, which has generated controversy since its publication, is no longer required. This concern is now allayed for labs that feared entering at weighted prices due to the application of European reference pricing (though only with respect to that to which the annulled precept refers). At present, European reference pricing is being used normally and with varying degrees of transparency, in most neighboring countries, and in Spain, as a factor to take into consideration when establishing the price of medication. However, automatic referencing, as stipulated in the annulled provision, only existed in Hungary. This is evident from the study prepared in mid-2015 by our network, Conférence Bleue. Notwithstanding the respite generated by the judgment, the industry would do well to remain vigilant of any new legislative developments that may occur. Though not expected this term, the persistent desire to cut pharmaceutical spending may trigger a legislative change that provides coverage, to a greater or lesser extent, to European reference pricing.