Regulatory, Pricing and Reimbursement
All about regulation, pricing and reimbursement of drugs in Lithuania. Prepared in association with TGS Baltic, a leading law firm in Lithuania, this is an extract from The Pharma Legal Handbook: Baltics, available to purchase here for GBP 99.
1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?
The authority responsible for applying and enforcing the regulatory framework and performing control functions in relation to drugs and biologicals is the State Medicine Control Agency (hereinafter, SMCA). As for medical devices, the State Health Care Accreditation Agency (hereinafter, SHCAA) is responsible for applying and enforcing the regulatory framework and performing control functions.
Both institutions act 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 reimbursement and pricing of drugs, biologicals and medical devices is the Law on Pharmacy of the Republic of Lithuania and the Law on Health Insurance of the Republic of Lithuania and their regulations. The legislation for the authorisation of medicinal products is the Law on Pharmacy of the Republic of Lithuania and its regulations.
The primary legislation for the authorisation of medical devices is the Law on the Health System of the Republic of Lithuania, Regulation (EU) 2017/745 of the European Parliament and of the Council of 5 April 2017 on medical devices, amending Directive 2001/83/EC, Regulation (EC) No 178/2002 and Regulation (EC) No 1223/2009 and repealing Council Directives 90/385/EEC and 93/42/EEC (hereinafter, Regulation (EU) 2017/745), Technical Regulation on the Safety of In Vitro Diagnostic Medical Devices approved by the order of the Minister of Health of the Republic of Lithuania No. 679, passed 29 December 2001 (In Vitro Local Regulation) and other related regulations, approved by the Minister of Health of the Republic of Lithuania.
Generally, in Lithuania wholesale and retail mark-ups of medicinal products are regulated by the Minister of Health and the Government:
- as for the reimbursable medicinal products wholesale and retail mark-ups are regulated by the Minister of Health;
- as for non-reimbursable medicinal products wholesale and retail mark-ups are regulated by the Government.
Wholesale and retail mark-ups of medicinal devices are regulated only with respect to reimbursable medical devices. Mark-ups for reimbursable medical devices are regulated by the Minister of Health. Prices for non-reimbursable medical devices are not regulated.
3. What are the steps to obtain authorization to develop, test, and market a product?
A. MEDICINAL PRODUCTS
There are several medicinal product authorisation procedures in the Republic of Lithuania.
In case an entity seeks to authorise a medicinal product, which has not been authorised in any other state of the European Economic Area (hereinafter, EEA), in order to market it only in the Lithuanian market, it must submit an application to the SMCA.
The timeframe of the authorisation process on medicinal products should not exceed 210 days from the day when the application with all the required documentation was submitted.
During the authorisation processes, applicants must prove:
- as for new molecules and biologicals – quality, safety and efficacy of the medicinal product;
- as for generics – bioequivalence with the reference medicinal product.
In case an entity seeks to authorise a medicinal product, which has not been authorised in any other country of the EEA, in order to market it in several EEA countries, including Lithuania, it must submit to the SMCA an application with the dossier which has been provided to the national authorities of other Member States.
Mutual recognition procedure
In case an entity seeks to authorise in Lithuania a medicinal product, which has already been authorised in at least one Member State on a national basis (Reference Member State), it must submit the application with the dossier to the SMCA (Concerned Member State). If the whole mutual recognition process is successful, the SMCA will mutually recognise the marketing authorisation of the Reference Member State, permitting the marketing of that medicinal product in Lithuania as well.
Both mutual recognition and decentralized procedures are based on recognition by national authorities of a first assessment performed by one Member State. In order to authorise medicinal products, an identical application for marketing authorisation has to be submitted simultaneously to the competent authorities of the Reference Member State and of the Concerned Member States. The difference of both procedures lies in that the mutual recognition procedure applies to medicinal products which have not received a marketing authorisation at the time of application, while the decentralized procedure applies to medicinal products which already received marketing authorisation in one or several Member States at the time of application.
EU Centralised Procedure
In addition to the authorisation procedures indicated above, medicinal products can also be authorised with a single application in all EEA countries by the European Commission through the Centralized Procedure.
B. MEDICAL DEVICES
Only medical devices complying with the requirements of the Regulation (EU) 2017/745 or the In Vitro Local Regulation may be placed on the market of the Republic of Lithuania. Specific requirements vary depending on the type of the medical device (e.g., classes I, II, III, in vitro, etc.).
Manufacturers of medical devices (If the manufacturer of the medical device is not established in a Member State of the EEA, the mandatory data shall be submitted by the manufacturer’s authorised representative established in the Republic of Lithuania), persons assembling and/or sterilizing procedural packs and/or systems established in the Republic of Lithuania before placing them on the market on their own behalf have to register them with the SHCAA. The following medical devices have to be registered (i.e., all of the following medical devices have to be registered with the SHCAA until the European database on medical devices (EUDAMED) becomes functional):
- custom-made medical devices;
- custom-made active implantable medical devices;
- manufactured in vitro diagnostic medical devices;
- manufactured medical devices for performance evaluation;
- manufactured Class I medical devices;
- systems and / or procedure packs;
- sterilizable systems and / or procedure packs.
Manufacturers of medical devices, authorised representatives of medical device manufacturers, importers of medical devices and distributors of medical devices placing on the market of the Republic of Lithuania class IIA, IIB, III and custom-made active implantable medical devices in accordance with the rules specified in Regulation (EU) 2017/745 must submit data on the address of their registered offices and data on medical devices placed on the market of the Republic of Lithuania to the SHCAA.
4. What are the approximate fees for each authorization?
A. MEDICINAL PRODUCTS
State fees for authorisation of medicinal products depend on the type of the authorisation procedure.
As for national authorisation procedure, an approximate fee is EUR 5,413.
Decentralized and mutual recognition procedures
For decentralized or mutual recognition procedures, when the Republic of Lithuania participates as a Concerned Member State, i.e., a Member State which recognizes the authorisation of another Member State, an approximate fee is EUR 788.
In case the Republic of Lithuania participates in the authorisation process as a Reference Member State, i.e., a Member State which evaluates the marketing authorisation application dossier and prepares the assessment report on behalf of the Concerned Member States, the following approximate fees apply:
- decentralized procedure – EUR 11,961;
- mutual recognition procedure – EUR 6,691.
B. MEDICAL DEVICES
A state fee is charged for the registration of medical devices supplied to the market. The registration fee for one medical device is EUR 38.
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?
TERM OF VALIDITY
A national marketing authorisation of medicinal products is valid for 5 years. After this period, the holder of a marketing authorisation of a medicinal product may renew the authorisation of the medicinal product. Generally, a renewed marketing authorisation is valid for an indefinite period, however, the SMCA may decide on the need for a renewal after another 5 years from the first renewal procedure.
In case an authorised medicinal product is not marketed within 3 years from the moment of authorisation, the authorisation becomes invalid.
For medical devices, registration is valid indefinitely.
RENEWAL OF A MARKETING AUTHORIZATION
In order to renew a marketing authorisation for a medicinal product, authorisation holders must submit an application for the renewal of a marketing authorisation together with other required documents no later than 9 months before the expiry date of the initial authorisation. The renewal process cannot take more than 180 days from the date of the application for the renewal of a marketing authorisation.
The applicants must submit a consolidated file containing information on the quality, safety, and efficacy of the product, etc., together with the application for the renewal of a marketing authorisation. The file and the application shall be submitted to the SMCA.
The SMCA performs the re-evaluation of a benefit/risk balance based on a consolidated version of the file and any relevant new information. The renewal of a marketing authorisation is issued only if the benefit/risk balance is positive.
Once a marketing authorisation has been renewed and no further renewal is considered necessary, the marketing authorisation will be indefinite. However, the SMCA may decide on the need for a renewal after another 5 years from the first renewal procedure. The decision on whether to renew a marketing authorisation with unlimited validity or to require an additional 5-year renewal is taken on the basis of the criteria described by laws, e.g., based on pharmacovigilance data, the number of patients treated by the medicinal product, etc.
For medical devices, no registration renewal is required.
6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?
DIFFERENCES OF THE AUTHORIZATION PROCESS BETWEEN BRAND-NAME AND GENERIC MEDICINAL PRODUCTS:
A person who intends to authorise a brand name medicinal product is obliged to submit to the SMCA an application together with the results of pharmaceutical (physico-chemical, biological or microbiological), pre-clinical (toxicological and pharmacological) clinical trials and other documents/information required by laws.
As for generic medicinal products, it is not obligatory to submit the results of pre-clinical and clinical trials. However, for generic (similar) medicinal products, marketing authorisations without performing full clinical testing may be received only after the market exclusivity period of ten years from the initial authorisation of the reference (original) medicinal product has expired.
DIFFERENCES FOR LOCAL MANUFACTURERS VERSUS FOREIGN-OWNED MANUFACTURERS:
In Lithuania, there are no differences in the authorisation process applied to the medicinal products of local manufacturers versus manufacturers established in the EEA.
7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?
Combination products can be classified either as drugs or as medical devices. Depending on the nature of the combination product, the authorisation institution may be either the SMCA or the SHCAA.
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?
MONITORING OF COMPLIANCE:
There is a permanent pharmacovigilance system in Lithuania, which is administered by the SMCA. This system is based on the information on adverse effects submitted by healthcare professionals, pharmacists, patients and other persons (e.g., other state institutions, etc.). The SMCA and medicinal products authorisation holders submit information on adverse effects of medicinal products to EudraVigilance, a centralized European database of suspected adverse reactions to medicines that are authorised or being studied in clinical trials in the EEA.
COMPARABILITY WITH THE U.S. FOOD AND DRUG ADMINISTRATION (FDA) OR THE EUROPEAN MEDICINES AGENCY EXPECTATIONS AND REQUIREMENTS:
The Lithuanian regulatory regime is compliant with the EU regulations and directives. Lithuanian regulatory institutions refer to the European Medicines Agency’s Guidelines and other explanatory documents.
The EU and the United States of America (the U.S.) have entered into a mutual recognition agreement on GMP inspections.
In general, the agreement facilitates the exchange of official GMPs documents between the EU and the US authorities and reliance on the factual findings in such documents. The agreement seeks to facilitate trade and benefit public health by allowing the EU and the US to leverage and to reallocate their inspection resources, including by avoiding duplication of inspections, so as to improve oversight of manufacturing facilities and better address quality risk and prevent adverse health consequences.
The SMCA of the Republic of Lithuania has been recognised in accordance with the agreement on 1 June 2018.
9. What is the potential range of penalties for noncompliance?
The SMCA and the SHCAA can perform ordinary and non-ordinary audits of the entities engaged in activities related to medicinal products/medical devices.
As for medicinal products, in case of non-compliance the SMCA can impose the following sanctions:
- suspension/revocation of the marketing authorisation;
- suspension/revocation of the retail company’s right to sell medicinal products, pharmacy activity license, wholesale distribution license and manufacturing licence;
- an administrative fine to the head of a legal entity or other responsible person, ranging from EUR 30 up to EUR 4,300;
- cancelation and/or removal of medicinal products from the market.
In some particular cases (e.g., non-compliance with the conditions of sale (dispensing) of medicinal products to the general public, etc.) even the forfeiture of medicinal products may be imposed.
As for medical devices, in case of non-compliance the SHCAA can impose following sanctions:
- suspension for the placing on the market and/or distribution and/or use of medical devices;
- cancelation and/or removal of medical devices from the market;
- prohibition of the placing on the market, distribution, and use of medical devices;
- a fine, ranging from EUR 30 up to EUR 1,500.
The severity of the sanction may depend on the gravity of the infringement, repeatability of the infringement, damage caused to the patients, etc.
10. Is there a national healthcare system? If so, how is it administered and funded?
The Lithuanian national healthcare system is mainly funded from the Compulsory Health Insurance Fund budget (CHIF). The scheme is based on compulsory, largely employment-based contributions, administered by the NHIF. National healthcare system is structured to cover the entire population resident in Lithuania (however residents failing to pay compulsory contributions are not insured).
The Ministry of Health is responsible for general supervision of the entire health care system. It also governs the NHIF, which is subordinated to the Ministry.
11. How does the government (or public) healthcare system function with private sector healthcare?
The majority of Lithuanian health care institutions (HCIs) are non-profit-making public HCIs, mostly financed by the funds from CHIF.
In addition to public health care system, the private sector provides mostly outpatient health care services which are paid by the patients themselves (out-of-pocket payments), territorial health insurance funds or private insurers. The private healthcare sector is very limited in providing inpatient care but plays a substantial role in other areas such as primary care, cosmetic surgery, and dental care.
Based on the main source of financing, 3 types of HCIs may be distinguished:
- public HCIs (financed mainly from the CHIF and/or State or municipal budget allocations), which provide most of their services free of charge for the patients insured by compulsory national health insurance;
- private HCIs (financed basically from private funds (patients and private insurance)), which provide mainly paid services for the patients;
- mixed-type HCIs, i.e., private HCIs which conclude agreements with the NHIF or THIFs in order to provide certain services for the patients insured by compulsory l health insurance free of charge. The remaining services are paid.
12. Are prices of drugs and devices regulated and, if so, how?
Prices are regulated for the following products and devices:
- non-reimbursable medicinal products;
- reimbursable medicinal products and medical devices.
NON-REIMBURSABLE MEDICINAL PRODUCTS AND MEDICAL DEVICES:
As for non-reimbursable medicinal products, marketing authorisation holders (MAHs), parallel import permit holders (PIPHs) or their local represen-
tatives (LOCs) have to declare to the Ministry of Health the price at which a non-reimbursable medicinal product will be distributed in Lithuania (the Declared Price). The Declared Price is used as the basis from which maxi-mum allowed wholesale and retail prices of non-reimbursable medicinal product are calculated by adding maximum wholesale and retail mark-ups set by the Government, and VAT (if applicable). However, the final maximum markups and maximum price is determined taking into account the actual price at which the product is sold to wholesaler and/or retailer. In case of multiple wholesalers / retailers in a supply chain, the maximums mark-up is shared between them.
Prices of non-reimbursable medical devices are not regulated, they are sold at a market price.
REIMBURSABLE MEDICINAL PRODUCTS AND MEDICAL DEVICES:
With respect to the reimbursable medicinal products, MAHs, PIPHs, parallel distributors or their LOCs, manufacturers of medical devices or their LOCs have to submit the price applied for Lithuania (Applied Price for Lithuania) to the NHIF. The Applied Prices for Lithuania are used as the basis for calculating the end prices of reimbursable medicinal products and reimbursable medical devices (i.e., by adding to it fixed (maximum) wholesale and retail mark-ups, established by the Minister of Health, and VAT (if applicable)).
As for reimbursable medicinal products and medical devices, the prices are established in the Pricelist of Reimbursed Medicinal Products and the Pricelist of Reimbursed Medical Devices, approved by the Minister of Health of the Republic of Lithuania.
13. How are drugs and devices used by patients paid for? What roles do public and private payers play?
Payment for medicinal products/medical devices in the outpatient sector depends on whether such products/medical devices are reimbursable or non-reimbursable.
A reimbursable medicinal product or medical device may be fully or partially reimbursed. The level of reimbursement of such products depends on the terms of reimbursement established for a particular product, the price of a particular medicinal product/medical device, on the social status of the patient (e.g., pensioners may be provided different reimbursement terms compared with other citizens) and the diseases that the product is prescribed for.
In case a medicinal product/medical device is only reimbursed partially, the patient has to pay a co-payment.
As for the inpatient sector, expenses for medicinal products and medical devices may be covered from public funds, provided that:
- a patient is covered by compulsory health insurance;
- healthcare services are provided by the healthcare institution which has concluded a compensation agreement with the territorial health insurance fund;
- provided healthcare services are included in the list of healthcare services which costs are reimbursed by the state;
- to have a written order from a (e. g., family) doctor to see a specialist or get certain medical services.
In other cases, except the situations where emergency assistance (first-aid) is provided to the patient, patients have to pay for the medicinal products or medical devices provided.
14. Who dispenses drugs and devices to patients and how are those dispensers compensated?
As for the outpatient sector, medicinal products are dispensed by pharmacies. In addition, retail companies having the right to sell medicinal products are allowed to dispense a limited list of medicinal products as approved by SMCA (no prescription or reimbursed products). Medical devices may be dispensed by healthcare institutions and sellers (i.e., pharmacies, shops, vending machines, etc.).
As for the inpatient sector, medicinal products and medical devices may be dispensed by healthcare institutions.
As far as the compensation issue is concerned, please see the answers to questions 10 and 11 of this Chapter.
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?
In case of medicinal products, pharmacists and pharmacy technicians who dispense medicinal products to patients are obliged to:
- provide the patient with information on the use of medicinal products;
- dispense medicinal products according to legal requirements only;
Pharmacists are also allowed to provide pharmaceutical care services and to perform vaccination and COVID-19 rapid antigen testing within the premises of the pharmacy (in this case pharmacies shall have a valid HCI license and pharmacists shall have valid healthcare professionals’ licenses).
In addition, in case of a reimbursable or prescription medicinal product or reimbursable medical device, patients must also be informed about other similar products/medical devices.
Cashiers of the retail companies having the right to sell medicinal products can sell OTC medicinal products included in the list approved the SMCA. There are no pharma-related qualification requirements provided for such cashiers in local legal acts.