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 USD 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 (SMCA). As for medical devices, the State Health Care Accreditation Agency (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 authorization, pricing, and reimbursement of drugs, biologicals, and medical devices is the Law of the Republic of Lithuania on Pharmacy and its regulations.
Generally, in Lithuania wholesale and retail mark-ups are regulated by the Government for all medicinal products and for reimbursable medical devices. Prices for non-reimbursable medical devices are not regulated.
The primary legislation for the authorization of medical devices is the Law of the Republic of Lithuania on the Health System and related regulations, approved by the Minister of Health of the Republic of Lithuania.
3. What are the steps to obtain authorization to develop, test, and market a product?
A. MEDICINAL PRODUCTS
There are several medicinal product authorization procedures in the Republic of Lithuania.
In case an entity seeks to authorize a medicinal product, which has not been authorized in any other state of the European Economic Area (EEA), in order to market it only in the Lithuanian market, it must submit an application to the SMCA.
The timeframe of the authorization process on molecules, biologics, and follow-on products is no longer than 210 days from the day when the application with all the required documentation was submitted.
During the authorization 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 authorize a medicinal product, which has not been authorized 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 authorize in Lithuania a medicinal product, which is already 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 authorization 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 authorize medicinal products, an identical application for marketing authorization 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 authorization at the time of application, while the decentralized procedure applies to medicinal products which already received marketing authorization in one or several Member States at the time of application.
In addition to the authorization procedures indicated above, medicinal products can also be authorized with a single application in all EEA countries by the European Commission through the Centralized Procedure.
B. MEDICAL DEVICES
In order to place a medical device on the Lithuanian market, an applicant has to register the medical device with the SHCAA.
The requirements for registration vary according to the class of the medical device (e.g. classes I, II, III, etc.). Classification of medical devices depends on different criteria such as the duration of contact with the patient, the degree of invasiveness, the part of the body affected by the use of the device, etc.
For registration, generally an applicant should submit to the SHCAA an application form together with the required documents and data (e.g., technical data of the medical device, documents certifying the compliance of the medical device with requirements established by laws, etc.). If the application form is completed correctly and all necessary documents have been submitted, the registration of a medical device may take up to 14 days.
4. What are the approximate fees for each authorization?
A. MEDICINAL PRODUCTS
State fees for authorization of medicinal products depend on the type of the authorization procedure.
As for national authorization 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 authorization of another Member State)), an approximate fee is EUR 788.
In case the Republic of Lithuania participates in the authorization process as a Reference Member State, i.e. a Member State which evaluates the marketing authorization 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. 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 authorization of medicinal products is valid for 5 years. After this period, the holder of a marketing authorization of a medicinal product may renew the authorization of the medicinal product. Generally, a renewed marketing authorization 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 authorized medicinal product is not marketed within 3 years from the moment of authorization, the authorization becomes invalid.
For medical devices, registration is valid indefinitely.
RENEWAL OF A MARKETING AUTHORIZATION
As for medicinal products, in order to renew a marketing authorization, authorization holders must submit an application for the renewal of a marketing authorization together with other required documents no later than 9 months before the expiry date of the initial authorization. The renewal process cannot take more than 180 days from the date of the application for the renewal of a marketing authorization.
The application must be submitted to the SMCA. The applicants must also 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 authorization.
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 authorization is issued only if the benefit/risk balance is positive.
Once a marketing authorization has been renewed and no further renewal is considered necessary, the marketing authorization 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 authorization 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 authorize 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 authorizations without performing full clinical testing may be received only after the market exclusivity period of ten years from the initial authorization of the reference (original) medicinal product has expired.
DIFFERENCES FOR LOCAL MANUFACTURERS VERSUS FOREIGN-OWNED MANUFACTURERS:
In Lithuania, there are no differences in the authorization process applied to the medicinal products of local manufacturers versus manufacturers established in the EEA.
As for manufacturers from third countries, they must meet the following requirements:
- the manufacturer from the third country must have a Good Manufacturing Practice Certificate according to the requirements of the European Union (EU);
- there must be a qualified person established in one of the EU countries having a licence for manufacturing. This person must be responsible that medicinal products are manufactured in the third country and imported into the EU in accordance with Good Manufacturing Practice (GMP).
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 authorization 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 authorization 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.
EU and U.S. regulatory institutions have entered into a mutual recognition agreement on GMP inspections, which will be in the transition phase until July 2019.
The agreement allows EU and U.S. authorities to:
- rely on each other’s GMP inspection systems;
- share information on inspections and quality defects;
- waive batch testing of products on import into their territories.
At this moment, the FDA confirmed the capability of 12 EU Member States. However, the Republic of Lithuania have not been confirmed yet.
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 authorization;
- revocation of the manufacturing licence;
- a fine, ranging from EUR 30 up to EUR 3,000;
- cancelation and/or removal of medicinal products from the market.
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 marketing, 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 National Health Insurance Fund (NHIF). The scheme is based on compulsory, largely employment-based contributions, administered by the NHIF.
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, financed by the NHIF.
In addition to public health care, the private sector provides mostly outpatient health care services which are paid by the patients themselves or their private health insurance. 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 NHIF 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 in order to provide certain services for the patients insured by compulsory national health insurance free of charge.
12. Are prices of drugs and devices regulated and, if so, how?
Prices are regulated for the following products and devices:
- reimbursable medicinal products and medical devices;
- non-reimbursable medicinal products.
As for reimbursable medicinal products and medical devices, the prices are established in the List of Reimbursed Medicinal Products and the List of Reimbursed Medical Devices, approved by the Minister of Health of the Republic of Lithuania.
Retail prices of reimbursable medicines and medical devices are calculated by adding fixed (maximum) wholesale and retail mark-ups, established by the Minister of Health, and VAT (if applicable) to the product price applicable in Lithuania by the holder of the marketing authorization of the medicinal product or medical device.
As for non-reimbursable medicinal products, authorization holders have to declare to the Ministry of Health the price at which a non-reimbursable medicinal product will be distributed in Lithuania and also submit the prices of this product in reference countries. The retail price of non-reimbursable medicinal products is calculated by adding maximum wholesale and retail mark-ups set by the Government, and VAT (if applicable) to the price declared by the authorization holder.
Prices of non-reimbursable medical devices are not regulated, they are sold at market price.
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, and on the social status of the patient (e.g. pensioners may be provided different reimbursement terms compared with other citizens).
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 THIF;
- provided healthcare services are included in the list of healthcare services which costs are reimbursed by the state.
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 only. 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 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;
- inform the SMCA about possible adverse effects of medicinal products to the patients;
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.