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 GBP 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 Defense, 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 regulated primarily 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”);
- Regulation (EU) No. 2017/745 on Medical Devices (the “MD Regulation”), effective from 26 May 2021;
- Act No. 268/2014 Coll., on Medical Devices, as amended (the “Act on Medical Devices”), effective from 26 May 2022 the Act on Medical Devices will be replaced by Regulation (EU) No. 2017/746 on In Vitro Diagnostic Medical Devices (the “IVD Regulation”);
- Act No. 89/2021 Coll., on Medical Devices (the “New 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 on drugs that have not yet been registered, it is necessary to obtain clinical trial authorization from the State Institute for Drug Control. To test drugs that have already been registered, it is sufficient to notify the State Institute for Drug Control of the clinical trial.
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 Czech Republic. The other two authorization types allow for the marketing of the product in other EEA member states as well. In addition, a Centralized Procedure by the European Medicines Agency can also be used; it authorizes the product for all EEA member states. 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.) the requirement for marketing authorization does not apply.
Manufacturers and distributors of drugs are required to obtain licenses from the State Institute for Drug Control. A manufacturing license is also required to import drugs from non-EEA states. Distribution licenses issued by EEA member 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 3,800;
- Authorization of a clinical trial for a registered drug: approx. EUR 800, and EUR 1,700 for accelerated processing;
- National Registration Procedure: approx. EUR 3,000 to approx. EUR 11,000;
- Mutual Recognition Procedure: approx. EUR 11,000;
- Decentralized Procedure: approx. EUR 13,000 to approx. 16,500.
The above fees as well as fees for other types of proceedings are stipulated in Decree No. 427/2008 Coll.
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/ registrations renewed?
Marketing authorizations are valid for five years after the decision granting the authorization comes into force and effect, provided that the drug is marketed in the Czech Republic.
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 the authorization and after 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, again, provided that the drug is marketed in the Czech Republic. However, if the State Institute for Drug Control finds that there is insufficient pharmacovigilance data (incl. exposure of an insufficient number of patients to the drug concerned), it may choose to extend the validity of the authorization for a new five-year period instead.
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, the 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, applicants for marketing authorization must reside or have their 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. Starting in May 2021 medical devices are regulated under the MD Regulation in combination with the New Act on Medical Devices while in vitro diagnostic medical devices are regulated under the Act on Medical Devices, and from May 2022 they will be regulated under the IVD Regulation. There are no special regulations for combination products. Therefore, any combination of drugs and biologics is regulated by the MD Regulation provided that the drug has an action that is ancillary to that of the action of the device. However, if the action of the drug is principal and not ancillary to that of the device, the product will be regulated by the Act on Drugs, while the relevant general safety and performance requirements set out in the MD Regulation will apply as far as the safety and performance of the device part are concerned. The same applies if the device and the drug form a single integral product which is intended exclusively for use in the given combination and is not reusable.
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 legal regulation of drugs and medical devices as well as with the performance of obligations imposed on the basis of its decisions and measures with respect to relevant subjects. This includes manufacturers and distributors of drugs and medical devices. It also carries out inspections 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 a pharmacovigilance system for drugs as well as medical devices and participates in pharmacovigilance processes of the European Union.
The regulatory regime is based on EU regulations and directives and is in line with the European Medicines Agency’s expectations and requirements.
9. What is the potential range of penalties for noncompliance?
The range of penalties depends on the type of violation and whether it has been committed by a natural person or a legal entity/entrepreneur. Broadly speaking, penalties in the area of drugs range from approx. EUR 3,800 to approx. EUR 770,000. Apart from financial penalties, a prohibition of activity (for up to two years) may be also imposed. In the area of medical devices, penalties range from approx. EUR 7,700 to approx. EUR 1,160,000.
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 regulated primarily by the Public Health Insurance Act and based on the principles of universal accessibility to healthcare, 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 permanent residency in the Czech Republic and for every employee whose employer has a permanent residence 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 disadvantaged individuals, including children, students, pensioners, etc. Contributions are paid to individual health insurance companies (at present, seven health insurance companies are authorized 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 that their clients have access to healthcare. They play a key role in the system of purchasing healthcare services by contracting with individual healthcare providers.
Czech legislation specifies what types of healthcare are covered by the public health insurance system and the extent of this 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 that 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, 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 under 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 healthcare 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?
Drug prices 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 that are subject to price regulation is set by a decision of the State Institute for Drug Control in administrative proceedings on the basis of the reference price calculation method using the three lowest prices in relevant 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.
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 plus VAT.
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 provided that the patient is covered by public health insurance and the healthcare provider has concluded an agreement with the health insurance company of the patient, which pays for the provided services.
In the outpatient sector, drugs are fully or partially reimbursable, if reimbursement is provided for an individual product by a decision of the State Institute for Drug Control in administrative proceedings. Information about the amount to be reimbursed can be found in the drugs database maintained by the State Institute for Drug Control. Otherwise, the patient pays 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, indication limit, etc.). This categorization does not apply to custom-made medical devices; those are reimbursed based on a percentage rate specified by law. Medical devices prescribed in the context of outpatient healthcare services are eligible for reimbursement so long as they are included in the appropriate reimbursement group. Thus, manufacturers seeking to have their medical devices categorized as reimbursable must notify the State Institute for Drug Control of the reimbursement group to which the device belongs. Similarly, to have a medical device removed from a group or switched from one group to another the manufacturer must also notify the State Institute for Drug Control of such change. 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. This list 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) optics and (iii) dispensers contracted by insurance companies. Dispensing medical devices remotely via consignment delivery is also possible.
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 qualifications 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, receipts, and the 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:
- dispense only devices for which a declaration of conformity has been issued and that have been CE marked; this does not apply if the device is custom-made;
- comply with the requirements of good storing practices;
- provide the patient with all information about facts that may affect his/her safety and health in connection with the use of the medical device;
- discard and store separately all medical devices that cannot be used for reasons specified in the Act on Medical Devices (e.g. when there is a reasonable suspicion that the safety and health of patients or third parties are endangered or when the period for safe use or implantation of the device has expired, etc.);
- when dispensing a device on the basis of an electronic prescription, immediately inform the central repository of electronic prescription via the eRecept system that the prescribed device has already been issued; and
- archive all medical prescriptions for medical devices not reimbursed from public health insurance for a period of five years.
Specific rules apply to dispensing a device via consignment delivery.