Bird & Bird Spain’s life sciences partner offers her opinions on the current state of laws and regulations surrounding pricing and reimbursement in Spain today, including the steps Spain’s autonomous regions have taken to attempt to legislate in this area, and how this impacts national policy.
What is the main legal challenge the health industry is facing in Spain?
Regulatory uncertainty: since approval on July 26, 2006, Spanish law on medicinal products and medical devices has been amended at least once a year, and sometimes twice (2013) or, even, three times (2010), the majority of these amendments implemented directly by the government by means of urgent royal decree laws and subsequently confirmed by the Spanish parliament. These amendments have been related to highly sensitive issues, like pricing and reimbursement, crucial for pharmaceutical companies to take their market and investment decisions and strategies in the short and long term. In addition, some of these annual amendments, initially so urgent, have kept undeveloped by secondary legislation for years, producing additional doubts and uncertainties on their scope and enforcement (for example, the Spanish ministry of health has been preparing a draft of royal decree on pricing and reimbursement for almost last three years; this royal decree is expected to be approved by the Spanish cabinet before the end of 2014).
Why is the regulatory framework so complex in the Spanish health sector?
It has to do with the territorial organization of the Spanish state, divided into 17 different autonomous regions. To ensure equal health and pharmaceutical care conditions for all Spanish citizens in all regions, the Spanish central government is the only one entitled to produce legislation on the basis of the healthcare and the pharmaceutical system as well as the only one to take decisions on the public funding of medicine and medical devices. Regional governments, in their turn, are entitled to produce legislation developing such national basic regulation, as well as to enforce it, providing (and paying) health and pharmaceutical care to patients through regional hospitals and healthcare centers.
Has the recession to do with this regulatory complexity?
Absolutely. Recent regulatory uncertainty is an outcome of the recession, since the last amendments to medicinal product and medical device regulations have mainly aimed at reducing public expenditure in healthcare. In addition, regional governments, responsible for acquiring and paying the products needed to provide healthcare services, have adopted a wide number of measures to reduce their cost. Some of them have consisted in changing their financing or dispensation conditions, being out of the scope of the competences of the regional governments, since those changes are reserved to the exclusive competence of the central government.
Have these regional measures invading exclusive competences of the central government been reviewed by the courts?
Yes, a number of them. For example, the decisions of two regional governments, Catalonia and Madrid, to impose on patients in their respective territories the payment of one euro per medical prescription, were declared null and void by the Spanish constitutional court by judgments on May 8, 2014 and May 29, 2014. The decisions of another regional government, Andalusia, to restrict the dispensation of certain medicines exclusively to hospitals, excluding their supply through pharmacies (with the consequent savings of pharmacies margins) have been also annulled by the Andalusia high court in judgments on March 17, 2014 and May 12, 2014. Finally, the decisions of the Andalusia government to call competition proceedings to select just a number of medicines or medical devices to be publicly funded per category and for certain periods (the so called “subastas andaluzas“) have been challenged by the central government before the Spanish constitutional court, which has not delivered a final judgment yet.
How will the new directive on prices of medicines impact on pricing and reimbursement proceedings in Spain?
It will depend on the final wording of the new directive amending directive 89/105/CEE, but it should dramatically change our pricing and reimbursement proceedings, not only in terms of shorter length, but especially in terms of more transparency and predictability. Until now, financing and reimbursement decisions have been produced with poor publicity, contradiction and motivation, and with poor chances for pharmaceutical companies to defend their interests or to negotiate. The Spanish ministry of health should take into account the new transparency requirements resulting from the proposal of directive when drafting the royal decree on pricing and reimbursement that is expected to be approved before the end of 2014.
Is there room in Spanish legal system for new funding formulas based on cost-sharing or risk-sharing agreements?
Yes. These agreements have been already used by certain Spanish regional governments like Andalusia, Valencia or, specially, Catalonia, for the public procurement of medicines and medical devices. In the last months, the Spanish ministry of health has been negotiating this type of agreement with two pharmaceutical companies (Merck and Gilead) but not for public procurement but for public funding decisions, reserved to the competence of the central government. Risk-sharing formulas are perfectly possible in public funding, used for years in the UK and Italy, whose experiences should be taken into account.
Just some days ago, Juncker made public his new team of commissioners, jointly with certain organization changes in DG SANCO. Has there been impact for Spain?
It is interesting that the EMA and some units dealing with marketing authorizations and quality of medicines have moved from DG SANCO to DG Enterprise and Industry, depending on the new commissioner of internal markets. This movement should intensify European Commission support for the European pharmaceutical industry and, in particular, to free movement of medicines across Europe. In my view, this is definitely interesting for Spain, in light of recent restrictions put by Spanish authorities to the placement of certain biological products (vaccines) on the Spanish market, infringing EU principles and regulations. New EC should take action with regard to this infringement.
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