Constitutional Court of the Czech Republic refuses to repeal the sixth part of the Act no. 48/1997 Coll.

03 May 2011

Eva Bajakova

On 30 March 2011, the Constitutional Court of the Czech Republic (the ‘Constitutional Court) refused to repeal the sixth part of the Act no. 48/1997 Coll., on public health insurance, as amended (the ‘Respective Part of the Act’). The Respective Part of the Act concerns administrative proceedings at the State Institute for Drug Control, through which prices and reimbursements of medicines and food for special medical purposes are regulated. Parties to the proceedings are, on the one hand, holders of registration, importers or producers of medicaments, and on the other hand, insurance companies.

A petition for repeal of the Respective Part of the Act was submitted by the Supreme Administrative Court of the Czech Republic (the ‘Petitioner’). The Petitioner argued that holders of registrations, importers and producers of medicaments only distribute their products through pharmacies, and therefore the question of to what extent the final price would be covered by insurance was irrelevant to them. Insurance companies were to reimburse pharmacies from public funds. This part of the agenda did not fall into the scope of their business activities. For these reasons the Petitioner deduced that the rights of neither party could be directly affected. According to the Petitioner’s opinion, the final administrative decision was in fact a cost decision which is by its nature an abstract normative rule. The Petitioner felt that the State Institute for Drug Control might be empowered to issue a cost decision even though the conditions for a regime of its enactment and publication were not fulfilled. The Respective Part of the Act acted to confuse the lawmaking with the application in such a way as to contradict the rule of law and legal certainty. This is wholly unacceptable in a democratic system.

The Constitutional Court, however, pointed out that it had already dealt with the question of the legal regulation of medicines. In a former ruling, it had rejected the notion that the Ministry of Health could determine medicine prices and reimbursement by a mere regulation, as this would lack transparency. Instead, reimbursements of medicines should be determined in administrative proceedings so as to permit the weighting of various interests.

It follows that the current regulation contained in the Respective Part of the Act provides a fair process and is fully consistent with the Constitutional Court’s former ruling. The petition for repeal was therefore rejected as it was manifestly unfounded.