Regulatory, Pricing and Reimbursement
A brief overview of the situation regarding regulatory, pricing and reimbursement in Latvia. Prepared in association with TGS Baltic, a leading law firm in Latvia, this is an extract from The Pharma Legal Handbook: Baltics, available to purchase here for USD 99.
1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?
There are several authorities responsible for applying and enforcing the regulatory framework in relation to drugs, biologicals, and medical devices:
- Health Inspectorate of the Republic of Latvia exercises State supervision in the health sector, including supervision and control of the manufacture and distribution of drugs (including biologicals) and medical devices;
- State Agency of Medicines of the Republic of Latvia (SAM) provides several functions, including registration of drugs, issuing permits for import, export, transit and distribution of drugs, as well as preparations intended for clinical trials, issues permits for the performance of clinical trials of drugs and supervises their procedures, evaluates the conformity of drugs wholesalers, manufacturers and importers, determines whether a drug belongs to non-prescription or prescription drugs, performs conformity assessment and registration of medical devices, performs conformity assessment and supervision of centres for acquiring and storage of tissues, cells and organs, blood rooms of medical treatment institutions, blood preparation divisions and the State Blood Donor Centre, assesses applications for receipt of a special permit (licence) for operating of a pharmacy and for registration of manufacturers, importers and distributors of active substances, performs the functions of pharmacovigilance;
- National Health Service performs economic evaluation of drugs, medical devices, medical technologies, and health care services to be paid by the State budget funds, determine the prices of drugs and medical devices intended to be compensated, draws up a list of drugs and medical devices intended to be compensated in outpatient medical treatment, etc.
All of them are State administration institutions under the supervision of the Ministry of Health.
2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?
The primary legislation for the authorization, pricing and reimbursement of drugs, biologicals, and medical devices is Pharmaceutical Law (Farmācijas likums) (PL) along with the Medical Treatment Law (Ārstniecības likums) and Regulations issued based on these laws and supplemented by guidelines.
3. What are the steps to obtain authorization to develop, test, and market a product?
Licence for Activities Related to Drugs
The preparation, manufacture, importing and distribution of drugs in the Republic of Latvia is allowed if a special permit (licence) has been issued for the relevant form of entrepreneurial activity, except for a person, who has a special permit (licence) issued in a Member State of the European Union or in a state of the European Economic Area, which gives the right to perform the wholesaling or manufacture of drugs, – in this case the person shall only inform the SAM, but does not need to obtain the licence.
A drugs manufacturer or importer is permitted to distribute manufactured drugs only to drugs manufacturers or importers, licensed drugs wholesalers, licensed pharmacies, medical treatment institutions and institutions of veterinary medicine.
- To manufacture or import drugs a permit (licence) for manufacturing or importing of drugs is needed, and the SAM adopts the decision on issue/rejection thereof within a period of 90 days.
- In order for a drugs wholesaler to commence operations – a special permit (licence) to open (operate) a drugs wholesaler business is needed; the SAM adopts the decision on issue/rejection thereof within a period of 90 days.
- In order to manufacture, import or distribute active substances, it is necessary to register the type of activity; the SAM adopts the decision on registering thereof within a period of 60 days.
- The SAM provides the permits (licences) for clinical trials – the SAM reviews the submission regarding the commencement of the clinical investigation of medicinal products and adopts a decision within a period of 60 days;
- To open a pharmacy a special permit (licence) is needed and it is valid for 5 years.
It is allowed to distribute only drugs registered in Latvia, except for drugs registered by the centralised procedures of the European Agency for the Evaluation of Medicinal Products (allowed without registration in Latvia) and special cases listed in the PL.
In order to register a drug, a person shall submit to the SAM a registration application, which complies with the sample published in Volume 2 of the collection of documents of the Rules Governing Medicinal Products in the European Community of the European Commission and which is published on the website of the SAM.
The SAM takes a decision within 210 days after lodging of the relevant registration application to the SAM (if drugs are registered in accordance with the national registration procedure, for registration made in accordance with the mutual recognition procedure or decentralised procedure different deadlines apply). If the decision is taken in respect of generic drugs to be registered in accordance with the national registration procedure, the decision is taken within 90 days.
It is allowed to place a medical device on the market, if it complies with the requirements of legislation, the relevant conformity assessment procedures have been performed, the EC conformity declaration has been made and the device is labelled with the CE marking.
To put medical devices of type IIa, IIb and class III, as well as A, B list and self-testing in vitro diagnostics and active implantable medical devices on the market, they shall be notified to the SAM, adding declaration of conformity and other information, this information is reviewed within 10 business days and published on the website of the SAM. With this the notification procedure is considered complete.
4. What are the approximate fees for each authorization?
State fee for issuing a licence to open a pharmacy is up to EUR 285, to open a wholesale business – up to EUR 427, for manufacturing activities – up to EUR 712. Regulation (price-list of the services of the SAM) sets prices for different situations depending on the activity, for example:
- The fee of analysis for registration of a drug according to the national procedure for the first submitted form of medication with a new active substance is EUR 5,692, but for the same in the decentralised procedure, where Latvia is the state of reference, – EUR 14,229. Fee for post-registration maintenance for each form and strength of medication – EUR 499 a year;
- Analysis for obtaining a permit for the distribution of drugs registered in the European Economic Area country, but not registered in the Republic of Latvia – EUR 705;
- Conformity assessment of a pharmaceutical company (pharmaceutical wholesaler, pharmaceutical company) – up to EUR 570.
The notification procedure for medical devices is free of charge.
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?
In general, the initial registration of drugs is in force for 5 years. The SAM is entitled to take a decision on re-registration of the medicinal product on the basis of a repeated evaluation after 5 years since the first registration. If the medicinal product has been re-registered once, the registration of the medicinal product is in effect for an unlimited period of time, except for special cases. An application shall be submitted for re-registration.
The permit (licence) for special activities like drug manufacturing or wholesale, as well as registration (notification procedure) of medical devices is valid for an unlimited time period, except the licence for pharmacies that is valid for 5 years. If the information in the permit (licence) for special activities changes, the licence shall be re-registered.
6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?
Regarding brand-name drugs and generic drugs – in case of generic drugs registration it is not necessary to submit non-clinical reports and clinical research reports, if the holder of the registration of the original medicinal product has agreed that the registrant will use cross-references to the original patent application file submitted by the owner of the original medicinal product. It is necessary to prove bio comparability and significant similarity.
There are no differences between local manufacturers of drugs and foreign-owned manufacturers. There is a specific procedure for local manufacturers of medical devices and a possibility for them to obtain a free sale certificate.
7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?
There is no specific regulation; general requirements for registration of drugs and devices apply depending on the nature of the combination, for example, regulation of medical devices applies if an integral part of a medical device is a substance which, when used separately, is considered to be a drug.
8. How is compliance with regulation monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?
There is a permanent pharmacovigilance system to obtain information about risks that the drugs create for patients and public health and to participate in the pharmacovigilance process in the European Union. This information is mainly related to the adverse effects of the drugs. Similarly, there is a vigilance system in place for medical devices, system is designated to monitor accidents. The Health Inspectorate monitors the activities of the subjects involved in the actions with drugs and medical devices to ensure the preservation of the quality of the product at all stages of the distribution and rapid withdrawal of low-quality products from the market. The system is comparable with the European Medicines Agency expectations and requirements as the national regulation is closely related to the regulation of the European Union.
9. What is the potential range of penalties for noncompliance?
The Health Inspectorate is entitled to make on-site visits to monitor the compliance with regulatory enactments. In case of noncompliance the Health Inspectorate may issue a written warning to prevent the noncompliance, but, if it is not eliminated, the Health Inspectorate may issue a decision to terminate the operations of the subject. In special cases, for example, if prohibited drugs are placed on the market, it is possible also to terminate the activities without previous warning. The SAM may suspend or cancel the registration of drugs, for example, if it is recognised that the drugs are harmful, as well as ensure the withdrawal of the product from the market or stop the use of a medical device.
It is also possible to impose an administrative fine for noncompliance of up to EUR 7,100 (with or without confiscation of property) to legal entities.
10. Is there a national healthcare system? If so, how is it administered and funded?
Yes, there is a national healthcare system. Health-care services can be paid by the State (only small part shall be co-financed by patient), by private insurers or by the patient. For the State paid services there are uniform approved service tariffs. There is also a compensation system for drugs and medical devices enabling patients of certain diseases to obtain drugs with 100%, 75% or 50% compensation according to the nature and severity of the disease (diagnosis). The compensation system is administered by the National Health Service and funded by the State budget. According to international indicators, the health-care system in Latvia is underfinanced – it has one of the lowest financings in the European Union as well as high rate of out-of-pocket health expenditure, therefore the system is under reform.
11. How does the government (or public) healthcare system function with private sector healthcare?
The public healthcare system covers certain set of services and is constantly struggling with underfinancing, resulting in long queues for services. The public and private health sectors function separately; however, the private sector participants can apply and conclude contracts with the National Health Service to provide services within the national health-care system.
12. Are prices of drugs and devices regulated and, if so, how?
A system of restrictive pricing of drugs has been established in Latvia, covering both drugs partially or fully paid by the State budget funds, and drugs outside this compensation system.
For drugs and devices compensated by the State budget – pharmacies are allowed to sell those drugs and devices only for the price set by the National Health Service. According to the regulation, the price of reimbursable drugs or medical devices shall not be higher than the third lowest sales price of the manufacturer and the price of the wholesale trade of the drugs or medical devices in the Czech Republic, Denmark, Romania, Slovakia, and Hungary and shall not exceed the sales price of the manufacturer and the price of the wholesale trade of the drugs or medical devices in Estonia and Lithuania. The price of parallel distributed and parallel imported drugs shall be lower than the price of such reimbursable drugs, in relation to which parallel distribution or parallel importation has been carried out.
For all other drugs – the manufacturer or distributor has to inform the SAM about the selling price of the drugs, and the regulation sets out certain formulas, according to which the maximum allowed selling price for the wholesaler and pharmacy is determined, therefore the increase of prices is determined only by the increase of the manufacturer’s sales prices. This regulation does not apply to drugs obtained through public procurement.
Prices of devices are not regulated, except for those compensated by the State that have been described previously.
13. How are drugs and devices used by patients paid for? What roles do public and private payers play?
They are either paid by the State, covered by private insurers, or paid by patients themselves, depending on the type of diagnosis and choice of the patient.
14. Who dispenses drugs and devices to patients and how are those dispensers compensated?
Drugs are dispensed by pharmacies based on prescriptions of healthcare professionals or requests from patients. They are compensated by the State, covered by private insurers, or paid by patients themselves. The same applies to devices, except that it is possible to distribute them also outside pharmacies.
15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?
A pharmacy needs a special permit (licence) for its activities and it is responsible for the quality of the medicinal products it distributes and the carrying out of pharmaceutical care. It may purchase medicinal products only from medicinal product manufacturing undertakings, medicinal product wholesalers and pharmacies. When performing pharmaceutical care and ensuring the monitoring of side-effects caused by the use of medicinal products, the pharmacist shall inform customers regarding medicinal products and the use thereof, provide pharmacotherapeutic consultations, distribute medicinal products and other healthcare products, as well as propagate measures related to health promotion and illness prevention, on the basis of the latest scientific progress and taking into account consumer interests.