# Presentation: 589365

## Current trend in Czech legislation of price and reimbursement setting, first experience

- Current phase of the reform
- Current reimbursement criteria
- First results of the reform
- Future reforms

## Reasons for changing of system of price and reimbursement setting

- Rationalisation of the system
- Unclear rules of Categorisation Comittee
- Disharmony of the previous  legal regulation with EU law
- Disharmony of the previous  legal regulation with the Czech Constitutional Law

## Rationalisation of the system:

- Reimbursement of the effective pharmaceuticals
- In the least economically demanding form for comparable effect
- „reference system“
- Reference groups
- Flexible introduction of new pharmaceuticals into the reimbursement system
- Highly innovative products
- Reduction in the reimbursement of low-priced products for treatment of trivial disorders in favour of the reimbursement of high-priced products with provable efficiency

## Unclear rules of Categorisation Comittee

- Reimbursement used to be settled by MoH (in section so called Categorisation Comittee)
- Unpremeditated rules
- Non-standard decision making
- No binding deadlines
- No regular discretionary remedies of the verdicts by an independent authority

## Disharmony of the previous legal regulation with the EU law

- The EU Commission discovered discrepancy on the field of reimbursement and price setting between the Czech Law regulation and **Council Directive 89/105/EEC** of 21 December 1988 relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems (Transparency Directive)The Czech republic was notified of the discrepancy found mainly within:
**Procedural field**, f.e. guarantees of binding deadlines given in Transparency Directive, individualization of the decision-making procedure and essential review of the verdict by an independent authority
**Factual field**: the Czech law regulation was criticised for the absence of objective and provable assessment criteria (the relevant Internal Instruction of the MoH  contained  only a few assessment criteria)

## Disharmony of the previous legal regulation with the Czech Constitutional Law

**Resolution of the Constitutional Court of the Czech Republic:**
- Finding PL US 36/05 of January 16, 2007 No.57/2007
- § 15 of the Public Health Insurance Law No.48/1997 CoL., justifying MoH to assess the reimbursement of pharmaceuticals by a notice was abolished as  of January 1, 2008
- Discrepancy between reimbursement regulation and the Czech Constitutional Law was found incompatible with the article 36 of the Bill of Rights  (especially with respect to right to a fair trial)

## Accepted new law

- Law No.**261/2007** CoL., on the stabilisation of public budget
- Effective as of January 1, 2008
- Principle amendment of price and reimbursement setting to the Public Health Insurance Law No. 48/1997 CoL.
- Individualization of the assessment process of maximum prices and reimbursement
- Premeditated and provable assessment criteria
- Binding deadlines
- Administrative procedure
- Introduction of regulation fees
- Limit of co-payment and fees
- Law No. **378/2007** CoL., on pharmaceuticals
- Effective as of January 1, 2008
- New competencies of State Institute for Drug Control (hereafter the Institute)
- Modification of registration of pharmaceuticals
- New generic substitution adjustment

## Consequential by-laws

- Decrees to the Law No.48/1997 CoL. on:
- Reference groups
- Reference countries for price setting
- Supportive and supplementary pharmaceuticals
- Details on reimbursement assessment
- Price Regulation of MoH:
- Range of Ex_F Price regulation
- Modification of degressive margin
- Deduction from price related to settlement of regulation fee
- Decrees to the Law on Pharmaceuticals on:
- Prescribing
- Correct Pharmacy Practice
- Etc.

## Current reimbursement criteria

## Procedure of Reimbursement Setting

- Administrative procedure
- Reviewing of Decision is possible by appeal to MoH and than to Court of Justice
- Participants in the procedure on assessment, change or cancelation of max. price or level and conditions of reimbursement are always:
- 	- registration holder
- 	- health insurance companies
- Conditions for Decision on Reimbursement:
- 	- Registration of a pharmaceutical
- 	- Specific Treatment Programme
- 	- Settled max. price, if the product is subject to max.price regulation

## Deadlines

- The State Institute for Drug Control (the Institute) decides:
- on the max. price within **75**** days**, from the day the administrative procedure was started;
- On level and conditions of reimbursement within **75 days**, from the day the administrative procedure was started;
- Common procedure does not exceed **165 days**, from the day the administrative procedure was started

## Basic Reimbursement

- Is the reimbursement for usually prescribed daily dose of the substances in the reference group and is identical for all these substances
- The reference groups are groups of pharmaceuticals that are in principle therapeutically interchangeable and have similar or proximate efficiency and safety and similar clinical use
- The MoH determines the List of Reference Groups by a decree

## Basic Reimbursement

- 1.  The lowest price of usually prescribed daily dose of the pharmaceutical categorized into Reference group – discovered in any EU MS (for a pharmaceutical accessable in the Czech Republic)
- Accessability: share of this pharmaceutical on the whole volume of sales of substance must amount to at least 3% (in the previous calendar quarter);
- 2.   Daily cost of other therapy,
- If it is comparably efficient and cost effective with use of pharmaceutical
- 3.   Final price for consumer , as a result of price competition
- 4.   Final price for consumer included in a written price agreement between health insurance company and holder of registration, manufacturer or importer
- When assessing the basic reimbursement a procedure is applied, which starts at point 1. and uses other points, if the assessed reimbursement is lower than the one assessed according to the previous point.

## Temporary Reimbursement

- Exception for highly innovative pharmaceuticals in case of lack of information on treatment results in clinical practice or cost efficiency
- Can be assessed for 1 year, max. 3 times
- Conditions:
- If accessible data prove adequately benefit of a highly innovative pharmaceutical for therapy
- If a highly innovative pharmaceutical fulfils other reimbursement conditions
- If the pharmaceutical is reimbursed by public funds in at least 1 country of Reference basket.

## Increased (second) reimbursement

- Can be settled in addition to the basic reimbursement in the reference group
- If the product is cost-effective for
- Particular indication
- Determined group of patients
- Conditions of the increased reimbursement must be always stated by the Institute

## Full Reimbursement Guarantee

- During hospital stay - always
- Non-resident care :
- Appendix to Law 48 contains a list of fairly large groups of substances, of which at least 1 product must be fully reimbursed
- 300 groups
- Example:
- 80: ACE Inhibitors   acting for less than 24 hours
- captopril, enalapril
- 81: other  ACE Inhibitors
- lisinopril, perindopril, ramipril, quinapril, cilazapril, fosinopril, trandolapril, spirapril, moexipril, imidapril

## Therapeutic effectiveness, cost-effectiveness

- Therapeutic effectiveness is the ability to produce a desired amount of a desired effect with the pharmaceutical or the food for special medical purposes in conditions of the current clinical practice.
- As the rational therapeutical intervention should be considered a health care for prevention or disease treatment to achieve the most effective and safest treatment taking into account the cost-effectiveness.
- Pharmaceuticals or food for special medical purposes are cost-effective, if their use for treatment is more cost-effective than other treatments with comparable effect.

## Not reimbursed pharmaceuticals 

-    State Institute for drug Control will not settle reimbursement of these pharmaceuticals  and  food for special medical purposes:
- Supportive and supplementary,
- Their use is improper from expert point of view
- With the lack of evidence of their therapeutic  effectiveness
- Not fulfilling the conditions of therapeutic effectiveness

## Regular Revision of the System

- At least once a year
- Continual procedure
- The Institute assesses the harmony of the level and conditions of reimbursement of pharmaceuticals and food for special medical purposes with rules of legal system
- Mainly fulfilment of the expected results of pharmacotherapy,
- Effectiveness of determined reference groups,
- Level of basic reimbursement,
- Conditions of reimbursement,
- Assessment of clinical and cost effectiveness and comparison with original aims of pharmacotherapy

## Maximum price setting:

- The Institute in administrative procedure
- Average of Ex-F prices in the reference basket countries
- If product is available in at least 3 countries of reference basket
- Reference basket:  EU member states with Purchasing Power Parity close to the Czech Republic  and implementing price regulation of pharmaceuticals
- Average of the 3 lowest Ex-F prices of the product in remaining EU MS, if the ref. basket is not applicable
- Exceptions:
- Facilitation for generics
- Facilitation for highly innovative pharmaceuticals

## Maximum Price of the First Generic

- The Institute settles the max. price at least 20% lower than the max. price of the original pharmaceutical
- If the price suggested by the applicant or stated according to the price setting rules is lower than the reduced price (above mentioned) this price is settled by the Institute

## Primary Outcomes of the Reform

## Primary Outcomes of the Reform

- On-going revision of the system lowers the reimbursement within the groups of pharmaceuticals, where the prices used to be higher comparing to other EU MS
- Because of the introduction of a regulation fee for expedition of the pharmaceuticals on prescription – the least costly pharmaceuticals were excluded from the reimbursement (paracetamol, ASA)
- Shift of financial resources from reimbursement of inexpensive pharmaceuticals to the most costly care  (oncology, biologic therapy, orphan drugs,...)

## % Increase of Reimbursement(1. Q 2007 = 100%)

## Trend in Consumption of Pharmaceuticals

**Reimbursement**

**Packages**

## Trend in Consumption (packages)             year on year

## Future Reforms

- 2 phases:
- a) The upcoming modification of current rules
- b) Preparation of new Public Health Insurance Law

## Upcoming modification of the rules

- Making some formulation more accurate according to the suggestions by the EC
- Example:
- original text: The Institute sets the max. price, so that it would not exceed...** **
- new text: If not established differently according to this Law, the Institute sets the max. price...

## Upcoming modification of the rules

- New way of the basic reimbursement calculation:
- Basic reimbursement – at the level of average of the 3 lowest Ex-F prices in EU MS with the exception of the states named in the MoH Notice
- Originally – whole EU
- In preparation – MoH establishes by the notice the List of EU MS not to be used for the calculation of average of the prices
- (EU MS with less than 1.5 mil. and more than  70 mil. inhabitants, MS with GDP per capita lower by at least 40% compared to the CR)

## Upcoming modification of the rules

- Change of definition of accesability:
-       Share of the pharmaceutical on the whole volume of sales of substance must amount to at least 3% and if at the same time the share of substance amounts to at least 4% of the whole volume of sales of all in principle therapeutically interchangeable pharmaceuticals or food for special medical purposes
- External price is not to be used for reimbursement setting if the reimbursement conditions in the given country significantly lower the price of pharmaceuticals or food for special medical purposes

## Future Reforms – New Law

- All-new reimbursement of medical devices
- More emphasis on responsibilities of health insurance companies related to providing the clients with medical devices
- Condition of reimbursement – entry to the List of medical devices
- Forming of groups of m.d. with alike use
- (joint reimbursement within the group)
- Entry to the List in course of administrative procedure
- All-new reimbursement of food for special medical purposes
- analogically

## Non – legislative challenges

-  Role of Insurance Companies
-  Anti – corruption activity