Re-export of drugs in the Slovak Republic vol. 2 – the Act

11 January 2017

Katarina Pfeffer, Bibiana Mozoľová

We have commented previously on the troubling situation as regards insufficient drug supply in the Slovak Republic due (primarily) to the re-export of drugs. In our earlier article (Re-export of drugs in the Slovak Republic published in Bird & Bird's International Life Sciences Update for April 2016: see here), we reported that the aim of the Ministry of Health in Slovakia (Ministerstvo zdravotníctva Slovenskej republiky) was to avoid this situation through implementing a change in the current legislation. As described in that article, re-export mainly refers to drugs that are profitable for export. They are usually non-generic, relatively expensive drugs, such as cancer medication, vaccines, immunological medicinal products and osteoporosis medication sometimes used in rheumatology. In many cases the drugs are necessary for the treatment of serious and high-risk diseases which cannot otherwise be treated.

In 2015, drugs worth approximately €280 million were exported from Slovakia, resulting in (among other things) a shortage of such drugs for Slovakian patients. Over the course of the summer of 2015, the State Institute for Drug Control (SIDC) (Štátny ústav pre kontrolu liečiv) banned the export of several drugs, with the bans continuing into September. Drugs could still be exported to the Czech Republic, the Netherlands, Austria, Lithuania, the UK, Germany and Denmark, albeit with the exception of certain medicines: for example, distributors were unable to export insulin and vaccines, as well as medicines for Parkinson's disease, hyperkinetic disorders and schizophrenia. Bans on such exports were mainly justified on the grounds that the availability of those drugs on the domestic market was insufficient. However, the export bans were not deemed to be acceptable by the European Commission (EC), which found the bans to be in violation of the principle of free movement of goods (one of the main freedoms in the European Union) and in breach of the Treaty on the Functioning of the European Union (TFEU). The EC cautioned the SIDC and the Slovak Republic in March 2015.

In 2015, the SIDC issued more than 1,800 decisions prohibiting the export of drugs from the Slovak Republic.

On 19 October 2016, the National Council of the Slovak Republic approved Act No. 306/2016 Coll. (published on November 23, 2016), which amends Act No. 362/2011 Coll. on Medicinal Products and Medical Devices (the Act). The Act will take effect from 1 January 2017, and sets out a series of measures primarily aimed at preventing the export of drugs, as well as the removal of the measures for which the EC brought proceedings against the Slovak Republic.

The new rules on exports should ensure that distributors will no longer be able to export drugs covered by public health insurance. Such exports will only be permitted with the written authorization/Power of Attorney of the drug manufacturer. Distributors, as well as producers, will be obliged to supply medicinal products only to local pharmacies. Further, distributors must give notice of any such export at least seven days beforehand. That notification should identify the drug and include: (i) the drug's officially designated unit price; (ii) the total price of the exported drugs; (iii) the name of the state to which the drugs will be exported; (iv) the date of expiration of the drugs; and (v) the justification for the export of drugs.

Local pharmacies will also face new obligations: under the new rules, pharmacies will not be able to distribute drugs to everyone and the re-sale of drugs will only be allowed to holders of permits for the wholesale distribution of human drugs, as purchased from such pharmacies. As pointed out by the Ministry of Health, drugs purchased by distributors from pharmacies are often subsequently exported.

The Act also sets out sanctions in the event of a breach of the new obligations. The Ministry of Health will have the ability to impose fines of between EUR 5,000 and EUR 1 million, and, in certain cases, distributors or pharmacies may lose their operating licenses.

Whether the Act will effectively fulfil its main aim of preventing the re-export of drugs will not be known until after the first few months of 2017 have passed.

This article is part of the International Life Sciences and Healthcare update for January 2017

Authors

Bibiana Mozolova

Bibiana Mozoľová

Associate
Czech Republic & Slovakia

Call me on: +421 232 332 800
Image of Katarina Bujnakova

Katarína Pfeffer

Associate
Czech Republic & Slovakia

Call me on: +421 232 332 800