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Market access in the Czech Republic

Though an attractive market potentially, this country has a slow registration procedure and an emphasis on drug cost rather than value

Czech Republic market access pharmaThough one of the smallest markets, the Czech Republic has two parallel referencing systems, including strict control of a drug on its launch and a rigorous system of drug registration. However, despite its size, this country is regarded as one of the best in terms of economic stability and development.

Access to the Czech Republic market is mainly influenced by the fact that its healthcare is financed through a system of social health insurance with mandatory membership. The state-funded health service is complemented by several insurance funds that also cover part or total costs of payments for drugs through a state-governed drug reimbursement system.

The main regulatory body is the State Institute for Drug Control (SUKL). It controls pharma companies' applications to introduce and market medicines, being responsible for drug registrations, pricing and reimbursement levels.

Review system
Every drug manufactured and marketed in the Czech Republic is subject to the registration procedure. This involves the close scrutiny of all documentation through which the applicant has to prove the safety, efficacy and quality of the product. Other factors reviewed are indications, contraindications, drug dosage and classification in over-the-counter (OTC) or prescription categories, patient information leaflet and the proposal for the contents of the drug packaging. The important part of the registration decision is a Summary of Product Characteristics (SPC) that serves as source of information on the drug for all healthcare professionals. 

The applicant for a new registration has to have its company office within the EU or European Economic Area, as does the manufacturer(s) responsible for the batch release. Douments have to be written in Czech, Slovak or English.

Documentation requirements depend on the type of registration procedure. Usually it takes about 12 months from commencement of the registration process to launch of the drug on the market. The fees vary in accordance with the type of registration. The basic flat fee for registering a new drug entering the market is €10,000.

Registration types
There are three types of drug registration:

  • National registration: this applies to drugs to be registered in the Czech Republic alone and only when the drug is not registered in any other EU state
  • Mutual recognition procedure (MRP) registration: this means that the state where the drug is registered through a national registration process becomes a reference state and all the other states of the EU selected by the applicant are so-called 'concerned member states' (CMS). The reference state formulates an evaluation report and the CMS preview this report within a period of 90 days and issue a positive or negative standpoint for their countries
  • Decentralised registration procedure (DCP): this also applies to the procedure of mutual recognition, where one of the states, as with the MRP, is selected by the applicant as a reference state and all the other states are CMS. In contrast to the MRP, the drug is not registered in the reference state and all the states evaluate the application within a period of 210 days and issue a positive or negative opinion for their countries.

Sunset clause
Law no. 378/2007, Coll. on drugs defines (in article 34 paragraph 3) a 'sunset clause' provision which stipulates when the registration will be terminated in cases where the drug is unavailable on the market. The sunset clause applies to drugs registered either in a national, MRP or DCP registration procedure. 

Launching the product followed by its actual presence on the market is of crucial importance to the provisos of the 'sunset clause'. While launching the drug is not limited by its volume, its availability on the market is governed by certain volume limitations.

This volume is stipulated as 10,000 defined daily doses (DDD) in drugs where the DDD is set by the World Health Organisation. In case the DDD is not set, the drug registration remains valid on the condition that at least one form of the drug has been launched on the market and at least one package of all registered forms is physically present on the market.

Article 34 of the code on drugs sets out two three-year periods pertaining to decisions on termination of registration for drugs with defined or non-defined DDD. Three years after the launch of the drug on the market, SUKL controls its presence on the market in the requested minimum volume as outlined above.

When the sunset clause is applied and the drug has not been available in the market for the last three years in the minimum requested volume, the drug's registration for the Czech Republic expires.

In extraordinary cases, SUKL can, taking the protection of public health into consideration, decide to waive the sunset clause to stop the drug registration being terminated. This decision is made in an administrative procedure that has to be initiated either by SUKL or by the applicant and registration holder. Such an application for non-termination of registration has to be submitted three months before the expiry of the three-year period after the drug's launch.

The first time the sunset clause set by the code was applied was on December 31, 2010. For all drugs registered before December 31, 2007, the three-year period commenced on December 31, 2007. For all drugs launched on the market after January 1, 2008, the three-year period commences on a day when the decision on drug registration comes into legal force. Since January 1, 2011, SUKL has monitored in monthly intervals all registered drugs and their availability and presence in the market over the past three years. Additionally, it publishes a list every month containing drugs that can be affected by the sunset clause in the next six subsequent months.

Up to December 2, 2011, there had been 4,202 drugs with registration terminated by sunset clause application. Currently, there are 2,167 drugs listed as being in danger of being terminated by sunset clause application within the next six months. In these cases, the drugs' registration holders have to act in accordance with the provisions of SUKL if they want to enter the administrative procedure for non-termination of registration.

Low drug prices
The Czech Republic's drug market and its price levels were strongly affected by seven per cent cuts in maximum regulated prices in 2010 and its drug prices lie far below the EU average. This situation is set to worsen over the next few years.

Czech drug prices combine two referencing methods – international reference pricing and reimbursement and also referencing within therapeutic groups. The country has been applying this system since 2008 and it uses international referencing strictly both in setting the price of the drug for the producer and setting the level of reimbursement. It is the only country in Europe which does so. This method runs alongside the traditional and long-standing system of referencing within therapeutic groups.

SUKL sets maximum prices as an average production price of the three lowest prices of that particular drug in eight reference countries of the reference group (Estonia, France, Greece, Hungary, Italy, Lithuania, Portugal and Spain). Reimbursement levels are based on a reference principle within a reference therapeutic group, with the condition that at least one drug in a particular therapeutic group has to be fully reimbursed. Reimbursement in one reference country is a sufficient condition for reimbursement in the Czech market.

The three main aspects that influence market access of drugs in the Czech Republic have serious implications for pharma companies, who have to cope with them, while at the same time criticising the system.

Slow process
First, drug registrations involve a very time-consuming process due to the evaluation of reference and concerned member states. This is an onerous task for the local affiliates of companies, which globally try to maximise the number of registrations elsewhere. There is a strong need for support by global departments to take care of registration procedures and files and it is in the interests of companies to introduce such support into their 'best practices' principles, as it would offer a strong advantage in the whole process where various local affiliates and international communications play a significant role.

The sunset clause has cleared the market of drugs that were registered but not present on the market. Sometimes as a result of the sunset clause, companies artificially keep one, two or three packages of the drug in the market during the three-year period after registration in order to avoid it being terminated.

Companies have to ensure there is continuous presence and stock of the drug, which is sometimes a challenge if a global pharma company prefers other markets where the sales potential is higher and it does not have the motivation to ensure the physical presence of the drug in the Czech market. Here, international co-operation and also links to logistics and distribution channels are of crucial importance.

The pricing policies of many companies are seriously harmed by the downward pressure on prices, setting maximum prices and reimbursement levels based on reference therapeutic groups. In many categories, launching a drug for a certain price in a group where there may be a product costing half as much, the product has to fight for the remainder of the price to be paid by the end user. Many companies have decided to solve such issues by parallel imports, but many have also been deterred from launching the product in the Czech Republic at all.

As all GPs operate within the state-funded insurance scheme, they have to follow the rules of the system regarding their quotas of prescriptions. They thus care a great deal about the price level and the level of reimbursement of the drug, as this is automatically deducted from their reimbursement limits.

So price and reimbursement have a direct impact on prescribing and therefore it is the task for sales and marketing teams to perform at their best to demonstrate the benefits of their drugs to the physician. One good thing is that sales representatives are still allowed in the Czech market and no restrictions are planned in the coming months. Marketing initiatives are, however, under tight control by SUKL and incentives for physicians are limited to gifts below €60 per year, per physician and company.

Cost emphasis
The system still militates against the ability of drug companies to use clinical arguments towards a drug's benefits and so to demonstrate the value of its medicines to all stakeholders: the state – in the form of SUKL – professional medical societies and physicians. Therefore, all discussions and procedures are still very much based on comparing the costs and their impact on healthcare funding in the short term, instead of focusing on the whole pharmacoeconomic area and the benefit of treatments and innovations in healthcare from a long-term perspective.

Vendula Machackova
The Author
Vendula Machácková
is head of global marketing, Pears Health Cyber

11th January 2012


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