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Legal News: New rules for the annual mandatory centralized negotiation of discounts on medicinal products

Legal News

The Ministry of Health has modified significantly the annual mandatory procedure for centralized negotiation of discounts (“Negotiation Procedure”) on medicinal products.

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The changes are set out in the Ordinance for amendment and supplementation of Ordinance 10 of 2009 for the conditions and procedure for reimbursement of medicinal products pursuant to Art. 262, Para. 6, Item 1 and Item 2 of the Medicinal Products in Humane Medicine Act, of medical devices and dietetic foods for special medical purposes as well as of medicinal products for health activities pursuant to Art. 82, Para. 2, Item 3 of the Health Act (“Ordinance 10”) promulgated on 7 November 2017 and the main amendments shall enter into force on the day of promulgation.

The main amendments to the Negotiation Procedure are as follows:

Clarification of the medicinal products subject to the Negotiation Procedure

Subject to mandatory centralized negotiation of discounts continue to be medicinal products with a new international non-proprietary name (INN) which are requested for inclusion in the Positive Drug List (PDL).

The medicinal products included in Appendix 1 and 2 of the PDL whose reimbursement value paid by the National Health Insurance Fund (NHIF) is calculated on the basis of grouping where no medicinal products of other marketing authorization holders (MAH) are involved are also subject to mandatory centralized negotiation. The medicinal products included in Appendix 2 must also be included in the package of services provided by the NHIF aiming at the treatment of malignant diseases and paid in the in-patient health care outside of the value of the rendered medical services.

Mandatory advance discount due to a significant increase of NHIF’s expenses for the year

If NHIF’s expenses increase by more than 3% in comparison to the previous year, the MAHs which are the reason for the excess due to their medicinal products shall be obliged to pay a discount in the amount of 20% of the respective part of the increase.

The discount concerns all medicinal products subject to the Negotiation Procedure. The excess shall be evaluated after deduction of the discounts already negotiated.

The discount is an advance discount since its payment depends on the estimated expenses of the NHIF for the last quarter of the year. The final adjustment shall be made in the first quarter of the next year.

Additional advance discount

For medicinal products with a new INN, the NHIF and the respective MAH shall negotiate an additional discount which shall be applicable in case of excess of the negotiated estimated annual expense of NHIF for the respective medicinal product.

The discount shall be negotiated on an annual basis for a period of three years and shall be progressive – the MAHs shall be obligated to provide a discount in an increasing amount in accordance with the level of excess of the negotiated estimated annual expenses for the respective medicinal product.

The MAH shall pay the discount until 15 November of the same year on the basis of the estimated expense and the estimate excess in the last quarter of the current year.

Negotiation of discounts under the statutory minimum

Ordinance 10 now allows the negotiation of discounts under the statutory minimum for medicinal products where objective conditions are present. The medicinal products must contain an active substance with a well-established medicinal use and lack of an alternative treatment, or if the alternative treatments are significantly more expensive.

Advance payment of the negotiated discounts for the fourth quarter

The previous version of Ordinance 10 provided that the discount payment for the fourth quarter shall be made after the end of the latter. After the amendments, the negotiated discounts for the fourth quarter must be paid in advance until 15 November.

If the effectively paid amount of the discount for the fourth quarter is different from the final amount, the adjustment is to be made until the end of the first quarter of the next year.

“Transitional” mandatory advance discount due in November 2017

If NHIF’s expenses for the period from 7 November until 31 December 2017 are more than 3% of those during the same period in 2016, each MAH which contributed to the excess by its medicinal products shall pay a discount amounting to 40% of the respective excess.

The presence or absence of an increase shall be determined in accordance with an estimation by NHIF after deduction of the discounts already negotiated. The said advance discount shall be due until 15 November 2017.

Advance payment of the discount for the fourth quarter of 2017

The mandatory discount for compensation of NHIF’s expenses for the fourth quarter of 2017 which was negotiated in 2016 shall be due in advance until 15 November 2017 on the basis of the effectively incurred costs of NHIF. The previous legislative solution provided that the discounts for the fourth quarter should have been paid in the first quarter of the next year.

© 2018 KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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