Regulatory, Pricing and Reimbursement Overview
An insight into regulatory, pricing and reimbursement overview in Czech Republic. Prepared in association with PRK Partners, a leading law firm in Czech Republic, this is an extract from The Pharma Legal Handbook: Czech Republic, 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 main authorities with jurisdiction over drugs, biologicals and medical devices in the Czech Republic are the Ministry of Health and the State Institute for Drug Control. Along with these two main regulatory authorities, the following authorities also possess limited and specific jurisdiction over drugs, biologicals and/or medical devices: the Ministry of the Interior, Ministry of Justice, Ministry of Defence, Ministry of the Environment, Ministry of Agriculture, State Veterinary Administration, Institute for State Control of Veterinary Biologicals and Medicines, State Office for Nuclear Safety, Customs Authorities, District Veterinary Authorities and District Authorities.
2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?
The authorization, pricing and reimbursement of drugs, biologicals and medical devices is mainly regulated by the following acts (and related regulations):
- Act No. 378/2007 Coll., on Drugs, as amended (the “Act on Drugs”);
- Act No. 48/1997 Coll., on Public Health Insurance, as amended (the
“Public Health Insurance Act”);
- Act No. 268/2014 Coll., on Medical Devices, as amended (the “Act on
Medical Devices”); and
- Act No. 526/1990 Coll., on Prices, as amended.
3. What are the steps to obtaining authorization to develop, test, and market a product?
In order to conduct testing of drugs, which have not been registered yet, it is necessary to obtain a clinical trial authorization from the State Institute for Drug Control. For the testing of drugs, which have already been registered, it is sufficient to notify the State Institute for Drug Control of the clinical trial.
In order to introduce a drug to the market, it is necessary to obtain a registration (marketing authorization). There are three types of registrations: (i) National Registration, (ii) Mutual Recognition Procedure and (iii) Decentralized Procedure. National Registration authorizes the marketing of the product solely in the territory of the Czech Republic. The other two authorization types authorize the marketing of the product in other EEA states as well. In addition, the Centralized Procedure by the European Medicines Agency, which authorizes the product for all EEA states, can also be used. The requirement for a marketing authorization does not apply in a limited number of exceptions (drugs prepared in a pharmacy based on a prescription for an individual patient, drugs for research and development, etc.).
Manufacturers and distributors of drugs are required to obtain licenses from the State Institute for Drug Control. A manufacturing license is required also for importing drugs from non-EEA states. Distribution licenses issued by EEA states are recognized in the Czech Republic provided that the distributor submits a notification to the State Institute for Drug Control.
4. What are the approximate fees for each authorization?
The approximate fees for each authorization are:
- Authorization of a clinical trial for a not yet registered drug: approx. EUR 1,750
- Authorization of a clinical trial for a registered drug: approx. EUR 800
- National Registration: approx. EUR 9,000 to approx. EUR 11,000
- Mutual Recognition Procedure: approx. EUR 11,000
- Decentralized Procedure: approx. EUR 16,800
For further details on fees please see: http://www.sukl.eu/sukl/ust-29-version-19
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/ registrations renewed?
Marketing authorizations are valid for 5 years after the decision granting the authorization comes into force and effect. The State Institute for Drug Control may extend the validity of the authorization on the basis of an application submitted no later than nine months before the expiry of such authorization and a review of the risk-benefit balance of the drug. If the extension is approved by the State Institute for Drug Control, the authorization will last for an indefinite term.
6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?
In general, the authorization process is the same for original and generic products. The only difference is that under certain circumstances results of preclinical and clinical trials do not have to be submitted in cases where the reference product has been registered in at least one other EEA member state for at least eight years.
The authorization process prescribed by law is the same for local manufacturers as well as foreign-owned manufacturers.
However, the applicants for the marketing authorization must have their residency or registered seat in the Czech Republic or in another EEA member state.
7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated?
Under Czech law, both biologics and drugs are classified as drugs and are subject to the same regulation under the Act on Drugs, while medical devices are regulated separately under the Act on Medical Devices. There is no special regulation aimed at combination products. Therefore, any combination of drugs and bio- logics is regulated by the Act on Drugs. With respect to combinations of drugs/ biologics and medical devices, the part consisting of a drug/biologic is regulated by the Act on Drugs and the part consisting of a medical device is regulated by the Act on Medical Devices, unless the part consisting of a medical device is fully integrated into the product and is for single use only, in which case the product as a whole is considered to be a drug and is regulated solely by the Act on Drugs.
8. How is compliance with regulations monitored and evaluated? Is the regulatory regime comparable with the US Food and Drug Administration or the European Medicines Agency expectations and requirements?
The State Institute for Drug Control monitors compliance with the Act on Drugs and the performance of obligations imposed on the basis of its decisions and measures with respect to relevant subjects, including the manufacturers and distributors of drugs and medical devices. It also carries out inspections in order to ensure compliance with the requirements of GMP (good manufacturing practice), GDP (good distribution practice) and good clinical practice in the area of human pharmacy. The State Institute for Drug Control also operates and manages the pharmacovigilance system for drugs as well as medical devices and participates in the pharmacovigilance processes in the EU.
In general, the Czech regulatory regime can be deemed comparable with the one of the European Medicines Agency.
9. What is the potential range of penalties for noncompliance?
The range of penalties is dependent on the type of violation and whether it has been committed by a natural person or a legal entity/entrepreneur. The amounts of the penalties range from approx. EUR 390 to approx. EUR 780,000. Apart from financial penalties, a prohibition of activity (for up to two years) may be also imposed.
10. Is there a national healthcare system? If so, how is it administered and funded?
Yes, there is a national healthcare system in the Czech Republic. It is mainly regulated by the Public Health Insurance Act and is based on the principles of universal accessibility of healthcare and solidarity, mandatory health insurance, freedom to choose a health insurance company and a basic package of healthcare covered by the public health insurance.
Participation in the public healthcare insurance system is mandatory for every person with a permanent residency in the Czech Republic and every employee whose employer has a permanent residency or seat in the Czech Republic. The system is funded through mandatory monthly contributions by (i) employees and self-employed persons, (ii) employers and (iii) the state, which pays the insurance contributions for socially least-advantaged individuals, like children, students, pensioners, etc. Contributions are paid to individual health insurance companies (currently, seven health insurance companies hold the authorization to provide public health insurance in the Czech Republic, one health insurance company is owned by the Czech state). Health insurance companies are obliged to ensure healthcare is provided to their clients. They play a key role in the system of purchasing healthcare services by contracting with individual healthcare providers.
Czech legislation specifies the types of healthcare covered by the public health insurance system and the extent of such coverage; basically, the public health insurance system fully covers preventive medical examinations, diagnosis of diseases, and treatment of diseases as specified by applicable Czech law; it also determines the drugs and medical devices which are fully or partially covered by public health insurance and the respective conditions thereof.
In comparison with public health insurance, the share of private health insurance is rather negligible in the Czech Republic.
11. How does the government (or public) healthcare system function with private sector healthcare?
In the Czech Republic, the public healthcare providers provide the majority of inpatient healthcare services. They are usually profit-making or non-profit-making entities, founded by the Ministry of Health or regional authorities or municipalities. Outpatient clinics are usually in private ownership. There are also a few private healthcare providers that provide inpatient healthcare services. Health insurance companies have agreements in place also with certain private health-care providers, so certain services provided to the patients by these providers can be fully or partially covered by the public health insurance system.
12. Are prices of drugs and devices regulated and, if so, how?
The prices of drugs are regulated by a pricing regulation issued by the Ministry of Health. The regulation determines which drugs are subject to price regulation (e.g. drugs reimbursed under public health insurance) and sets out a general framework for price regulation. The maximum price for individual products, which are subject to price regulation, is determined by a decision of the State Institute for Drug Control in administrative proceedings on the basis of the reference price calculation method using three lowest prices in EU countries. Information about whether a product is subject to price regulation and what the maximum price is can be found in a database of drugs maintained by the State Institute for Drug Control.
The prices of medical devices are regulated by a pricing regulation issued by the Ministry of Health. The regulation determines which medical devices are subject to price regulation (e.g. devices reimbursed under public health insurance) and sets out a general framework for price regulation. The final price of a device paid by a consumer must not exceed the sum of the manufacturer’s price (the price for which the device is first placed on the market), the maximum margin allowed by the pricing regulation and VAT. The persons placing the device on the market are obliged to notify health insurance companies of the highest manufacturer’s price applied in the previous calendar year.
13. How are the drugs and devices used by patients paid for? What roles do public and private payers play?
In general, drugs and medical devices are fully reimbursable during inpatient care, if the patient is covered by public health insurance and the healthcare provider is public or – if private – has concluded an agreement with the health insurance company of the patient, which covers the provided services.
In the outpatient sector, drugs are fully or partially reimbursable, if reimbursement is provided for the individual product by a decision of the State Institute for Drug Control in administrative proceedings. Information about the reimbursement amount can be found in a database of drugs maintained by the State Institute for Drug Control. Otherwise, the patient has to pay for the drug in full.
As regards medical devices, the law divides them into reimbursement groups according to their functional characteristics and intended use. For each reimbursement group, the law specifies reimbursement conditions and limits (financial limit in CZK per unit, prescription and indication limit, etc.). By way of exception, the categorization does not apply to individually manufactured medical devices; those are reimbursed based on the percentage rate specified by law. Medical devices prescribed in the context of outpatient healthcare services are eligible for reimbursement upon their inclusion in the appropriate reimbursement group, whereas manufacturers seeking reimbursement for their medical devices must notify the State Institute for Drug Control of the reimbursement group to which the device belongs. Similarly, the removal of the medical device from the group or a change of group must also be notified to the State Institute for Drug Control. The State Institute for Drug Control publishes on its electronic notice board a full list of medical devices eligible for reimbursement under public health insurance, which is valid for the following calendar month. Devices not included in the list are paid by the patient in full.
14. Who dispenses drugs and devices to patients and how are those dispensers compensated?
Drugs may be dispensed by (i) pharmacies, (ii) transfusion units of healthcare providers (transfusion products and blood derivatives), (iii) nuclear medicine units of healthcare providers (radiopharmaceuticals), and (iv) immunological or microbiological units of healthcare providers and facilities for public health protection. In addition to this, drugs can be used by healthcare providers during the provision of healthcare services.
Medical devices may be dispensed by (i) pharmacies, (ii) dispensers of medical devices, (iii) optics and (iv) dispensers contracted by insurance companies. Dispensers are compensated through the public healthcare system to the extent to which the drugs and devices are reimbursed under the public healthcare system. Any remainder of the price of the drug or device is paid by the patient.
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?
Only pharmacists or other persons with a sufficient professional qualification are allowed to dispense drugs and/or medical devices.
Pharmacies and other dispensers of drugs are, inter alia, required to:
- buy drugs only from manufacturers, distributors or other pharmacies,
- handle drugs properly in line with their marketing authorization,
- ensure that the patient is adequately informed about the proper use of the drug,
- ensure that the patient is informed about similar products that are reimbursed by the public health insurance system,
- keep complete and conclusive records of stock, receipt and dispensing of drugs,
- immediately notify the State Institute for Drug Control of suspected adverse reactions to drugs,
- verify security features and discard the unique identifier of the dispensed
product equipped with security features under applicable regulations.
Dispensers of medical devices are, inter alia, required to:
- sell only devices for which a declaration of conformity has been issued and which have been CE marked; this does not apply if the device is individually manufactured,
- comply with the requirements of good distribution practice and ensure that the medical device is stored and handled in accordance with the instructions for use and any other instructions of the manufacturer,
- perform a regular inspection of medical devices and, if necessary, remove any in case there is a potential risk to safety,
- provide the patient all information that may affect his / her safety and health in connection with the use of the medical device,
- keep all documents relating to the medical device, including medical prescriptions, for a period of five years.