The Voluntary scheme for branded medicines pricing and access (“VPAS”) is a voluntary agreement that regulates the price of the vast majority of branded medicines sold in the UK (including branded generics and biosimilars). VPAS is critical to the commercial interests of most innovative pharmaceutical companies operating in the UK. It has traditionally
Germany significantly tightens Drug Pricing and Reimbursement Laws
The German regulation of pricing and reimbursement of pharmaceuticals is probably one of the most complicated legal areas in the entire world of life sciences laws. Now, the German government is adding another layer of complexity to the existing rules.
On 20 October 2022, the German Parliament has accepted the draft Act for the Financial Stabilization of the German Statutory Health Insurance System („GKV-FinStG“). The new act was subject to month-long controversial discussions within and outside of the Parliament and affected stakeholders. This was due to the fact that the new rules will affect almost all players within the healthcare system, including the health insurers, doctors, hospitals, pharmacies and, especially, the pharmaceutical industry. The new law encompasses significant cost-containment measures as the German healthcare system faces increased costs while, at the same time, the system suffers from a reduced inflow of funds.…
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New German Government plans significant changes with Impact on the Healthcare, Life Sciences and Food Sector
Following the federal election in September 2021, Germany will soon be led by a new three-party coalition, the so-called “traffic light coalition”, composed of the Social Democratic Party (SPD), the Liberal Democrats (FDP) and the Green Party (Die Grünen). This new federal government led by the new chancellor Olaf Scholz from the Social Democrats will replace the Merkel administration and will be in office for four years. On November 24, 2021, the new coalition has presented their coalition agreement with their plans for the next 4 years. The agreement needs to be approved by the respective party committees and it is expected that all three parties will approve it.…
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NHS England Publishes Draft Commercial Framework for Medicines
NHS England has recently published draft proposals on how it plans to approach doing commercial deals with pharmaceutical companies for branded medicines. This draft “Commercial Framework” is now open for comment and consultation (stakeholders can submit their views here). The consultation period ends on 10 January 2020, with Commercial Framework expected to be finalized…
The Commission’s Proposal on Health Technology Assessment – Will the EU Member States Accept its Mandatory Provisions?
This article was originally posted on our sister blog Global Policy Watch
Health technology assessment (“HTA”) is a multidisciplinary assessment process that seeks to evaluate the added therapeutic value of health technologies (i.e., drugs, certain medical devices, medical treatments including surgical procedures, and measures for disease prevention and diagnosis) based on both clinical and non-clinical elements. Until now, HTA has strictly fallen in the purview of EU Member States; they have cooperated among themselves in this field for more than 20 years on a purely voluntary basis. This has led to initiatives such as EUnetHTA, which is a network of national HTA bodies, and its various Joint Actions. Article 15 of the Cross-Border Healthcare Directive (Directive 2011/24) also provides for that national bodies responsible for HTA should cooperate on a voluntary basis. Gradually, these various actions have developed common criteria for the performance of HTA at national level. For example, the last “Joint Action 3” of EUnetHTA seeks to define common assessment methodologies, develop common ICT tools, and conduct and produce joint clinical assessments and HTA reports.
EU Member States have acknowledged the significant role that HTA plays and called on the European Commission to continue to support such initiatives (see, e.g., Council conclusions of December 6, 2014, on innovation for the benefit of patients). However, in a resolution of March 2, 2017, the European Parliament went a step further and called on the Commission to propose legislation on health technology assessment at the EU level to provide transparent and harmonized criteria to evaluate the added therapeutic value of drugs and other health technologies.
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German Exemptions from Mandatory Rebates for Pharma Companies Are in Line with EU State Aid Rules
The European Commission (the Commission) confirmed on 27 March 2015 that a German scheme exempting pharmaceutical companies from mandatory rebates is in line with EU State aid rules. The Commission concluded that the scheme facilitated price freezes on certain medicines, which in turn allows the costs of the public health system to be kept under control.
Council Directive 89/105/EEC allows Member States to introduce price freezes on pharmaceutical products. Article 4(2) of the Directive states that derogations from price freezes can be justified for “particular reasons”. Based on these provisions, Germany introduced a mandatory manufacturer’s rebate of 16% on certain prescription medicines sold to public sickness funds and private health insurers between 1 August 2010 and 31 December 2013. Also, under the Article 4(2) exemption, Germany set up a system of derogations for companies whose financial viability would be threatened by the rebate.
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Call for expression of interest to participate in early dialogue between HTA bodies and healthcare product developers
A call for expression of interest addressed to healthcare product developers who would be interested in engaging in early dialogues (EDs) with Health Technology Assessment (HTA) bodies was launched in December 2013 and will stay open until October 2014. The call concerns developers of both medicinal products and medical devices.
The European Commission defines HTA as a means to assess the ways science and technology are used in healthcare and disease prevention. It covers medical, social, economic, and ethical issues and provides policy-makers with objective information, so they can formulate health policies that are safe, effective, patient-focused and cost-effective. According to the Commission, HTA should be transparent, unbiased, robust and systematic, firmly rooted in research and the scientific method.
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French Competition Authority Issues Preliminary Assessment of Pharmaceutical Sector
The French Competition Authority (“FCA”) is currently investigating the intensity of competition in the supply of pharmaceuticals. The investigation was launched in February 2013 and concerns all levels of the medicinal distribution chain (pharmaceutical suppliers, wholesalers and retailers).
In July 2013, the FCA submitted to public consultation its initial assessment of the pharmaceutical sector. The FCA raised multiple concerns at every level of the distribution channel. The main areas of concern identified by the FCA are as follows:…
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The Limits Imposed by EU Competition Law on Pricing by Dominant Firms in the Life Sciences Sector
EU competition law imposes significant constraints on the ability of dominant firms in the life sciences sector to freely determine the price of their products. Price cuts and loyalty-inducing rebates can be abusive. So can excessively high or discriminatory prices. Vertically-integrated firms that control an important input must also ensure that the prices they charge upstream and downstream leave a sufficient margin to downstream competitors that rely on the upstream input.
Although these constraints apply only to firms that hold a dominant position on the relevant market where they are active, the importance of these limitations should not be underestimated considering that competition authorities are adopting very narrow market definitions.
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French Competition Authority Launches Pharmaceutical Sector Inquiry
In February 2013, the French Competition Authority (“FCA”) launched an inquiry into the pharmaceutical sector, examining each level of the medicinal distribution chain (pharmaceutical suppliers, wholesalers and retailers). The FCA is likely to focus on a broad range of issues, including:
- Generic entry: The inquiry will likely examine pay-for-delay arrangements and other issues relating to generic entry. Both the FCA and the European Commission are currently investigating several cases relating to practices allegedly aimed at disrupting generic entry. The FCA has also indicated that, following the sector inquiry, it may publish specific guidance on practices affecting generic entry.
- Parallel trade: In 2007, the FCA cleared (subject to certain commitments) the quota systems implemented by several major pharmaceutical companies. Quota systems are aimed at rationalising wholesale distribution and limiting parallel trade. The FCA may use the sector inquiry to revisit the issue of parallel trade and re-examine the quota systems.
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