Spain: Supreme Court ruling on reference pricing system

18 December 2012

José Manuel Ramos

Prior to the approval of Royal Decree 16/2012 (dated 20 April 2012) the Law 29/2006 (dated 26 July 2006) concerning guarantees and rational use of medicinal products and medical devices, regulated the reference price system by providing that “Public financing of medicinal products will be subject to the reference price system. The reference price will be the amount whereby the presentations of medicinal products, included in each of the determined groups, will be financed, provided that they are prescribed and supplied through an official medical prescription of the National Health System.”

To form groups of medicines with the same reference price as drafted by the Law of Medicine, it called for the accordance of the following requisites:

a) financed medicinal products.
b) same active substance.
c) identical method of administration.
d) there will be at least one presentation of a generic medicinal product.

Since 2006, with the previous regulation at hand, the Ministry of Health and Consumer Affairs approved diverse ministerial orders where a system included the generic reference prices. In some cases, some drugs included in groups of medicines, despite being authorized in our country, were not actually marketed by the manufacturer laboratory and therefore were not in a condition to be dispensed.

This paradoxical situation was frustrating for innovative pharmaceutical companies since a generic drug that was not actually on the market would drastically reduce the price of innovative drugs that were indeed on the market. This injustice led pharmaceutical companies to bring forth to the courts the need to market generic drugs for joint training.

At first, case law had accepted the position of the Administration. This stated that to establish the reference price was enough as long as a favourable resolution on the inclusion of the medicinal product in the pharmaceutical benefits of the National Health System (NHS) had been adopted. There was no need for such product to be effectively marketed.

However, since 2010, the National Court modified their manifested criteria and the way Law 29/2006 should be interpreted. It should now be interpreted to mean that the reference price system requires that the presentations included in the groups be effectively launched and marketed. This was because only if this condition was met could the rules regarding dispensation and substitution work properly.

Judgments made by the National Court were appealed to the Supreme Court of Spain, who on 8 October 2012 confirmed the view held in recent resolutions by the Court. That view is that the reference price system requires the presentations included in the groups be effectively launched and marketed. Given this pronouncement not to appeal by the Supreme Court of Spain, the Ministry of Health must accept the criterion.

It will not be until the new order from the Ministry of Health, which will be issued by the end of December 2012, that we find out whether the judgment obeys the Supreme Court of Spain or continues to ignore recent judicial pronouncements.

Nevertheless, we must keep in mind that on April 20th Royal Decree-Law 16/2012, regarding urgent measures to ensure the sustainability of the National Health System and improve the quality and safety of their benefits, was approved.

This Royal Decree-Law amends Article 93 of Law 29/2006, of July 26th, on Guarantees and rational use of medicinal products and medical devices. We have to take into account that this Royal Decree adds the reference price system requires at least one presentation of a generic medicinal product, "unless the drug or its main active ingredient has been approved with a minimum of ten years in a Member State of the European Union, in which case it will not be essential to have a generic drug for a set".

This article was written by:

José Manuel Ramos
Associate
Madrid

 

Other articles in the Life Sciences newletter for December 2012:

> Pan-European declaration of non-infringement can be brought before the English Courts

> Germany: No imminent threat of patent infringement upon obtaining a marketing authorisation

> Czech Republic: New restrictions on advertising of pharmaceuticals

CJEU dismisses appeals by AstraZeneca and upholds General Court Judgement

> Dutch reference to the CJEU: Georgetown University v Dutch Patent Office