The Netherlands: refund system allowed under self regulation rules

15 December 2009

Machteld Hiemstra

In its decision of 17 September 2009 the Appeal Committee of the Dutch self regulatory body concerning pharmaceutical advertising, upheld the decision in first instance that a refund system set up by Pfizer for their products Detrusitol and Toviaz is allowed. This decision is a clear departure from earlier decisions in which the mere existence of a refund system would be qualified as unlawful advertising.

On the basis of the refund system, patients either do not need to pay the price difference between the fixed reimbursable price and the actual price of prescription drugs to the pharmacist or they will be reimbursed. The pharmacist must either fill in a form or provide such form to the patient to send to a third party who will make the payments. This case was initiated by a pharmacist.

This is an important decision as under the Dutch reimbursement system medical practitioners are under great pressure to prescribe  medicinal products on the basis of active substance rather then brand name. Patients will only receive full reimbursement (directly or via their pharmacy) for medicinal products indicated by health care insurance policy unless a prescription contains a brand name. Pharmacies are not allowed to simply deliver a generic version if a branded medicinal product is prescribed. In such a case, a pharmacist, prescribing doctor and patient will mutually decide whether the branded product is necessary for treatment.

The Appeal Committee ruled that compensation schemes set up by pharmaceutical companies are as such not in conflict with the relevant legislation or self regulatory statute. So long as the rules on medical advertising are adhered to, pharmaceutical companies are free to determine and use mechanisms resulting in competition on prices for end users/patients.

The Committee considered that the refund system does not constitute unlawful advertising, mainly because patients were not confronted with any promotional elements within the context of obtaining payments. Further, the Appeal Committee considered that medical practitioners were not involved and would, when becoming aware of the option for patients to be refunded, not be influenced in making professional choices based on the best indicated medicine. As pharmacists do not receive any compensation for providing forms to patients or filling in forms to receive reimbursement, the services requested from pharmacists do not constitute unlawful advertising either.

The issue raised by the pharmacist, that the refund mechanism is in conflict with the legislation determining fixed prices for reimbursement of medicinal products, was not dealt with by the Appeal Committee. This is because the issue falls outside the competence of the Committee which is strictly limited to pharmaceutical advertising.