Changes in price and reimbursement regulation as of January 2008

Price regulation

The areas of competence are laid down in Section 2a of Act No. 265/1991 Coll., on Jurisdiction of Authorities of the Czech Republic in the Field of Prices.
The Ministry of Health executes powers in implementation and regulation of prices for healthcare services, medicinal products, foods for special medical purposes, dental products and medical devices and carries out price control of healthcare services.
The State Institute for Drug Control decides on maximum prices of medicinal products and foods for special medical purposes and carries out price control of medicinal products, foods for special medical purposes and medical devices.
As regards medicinal products and foods for special medical purposes (“products”) it means that the Ministry of Health issues decisions on prices by which the method of regulation of a product is determined. Decisions on prices are published in the Ministry’s Bulletin (currently chapter 1/2008).
According to the decision on prices a medicinal product or food for special medical purposes (“product”) is subject to price regulation if the product is fully or partially covered by the national health insurance system. Price regulation applies to ex-factory prices and trade margins. Prices of individually prepared products, individually prepared radiopharmaceuticals and blood components manufactured in blood establishments are regulated by general rules. Proprietary medicinal products are regulated on the level of ex-factory prices. 

SUKL is the competent authority responsible for setting the maximum ex-factory prices. The method for setting prices is stipulated by Act No. 48/1997 Coll., as amended; the decision -making process has the form of individual administrative proceedings. Proceedings are initiated upon submission of an application. The essential elements of an application are laid down by the above mentioned Act. An application form can be downloaded from SUKL website, including instructions how it should be filled in. A time limit of 75 days is set for adoption of a decision in administrative proceedings. Appeals should be filed with the Ministry of Health. 

According to transitional provisions, maximum prices fixed by the Ministry of Finance under regulations existing in 2007 remain valid from 1 January 2008. Therefore, there is no need to submit applications for products whose maximum prices have been already fixed. 

Trade margins are set by the Ministry of Health by means of decisions on prices. Decisions on prices are published in the Ministry of Health Bulletin (currently chapter 1/2008). 

Reimbursement regulation

The method for setting levels and conditions of reimbursement has been changed. Unlike previous practice, the information on reimbursement will not be published by means decree of the Ministry of Health. The levels and conditions of reimbursement will be set up on a case-by case basis within administrative proceedings. 
Under the amended Act No. 48/1997 Coll., the Ministry of Health prepares legal regulations (laws, decrees) and acts as the appellate authority in administrative proceedings. The State Institute for Drug Control (SUKL) is the authority of first instance which decides on the levels and conditions of reimbursement.
The above mentioned Act also stipulates criteria for making decisions on the levels and conditions of reimbursement.
An application has to be submitted in order to initiate proceedings. The essential elements of application are laid down by law, the application form and instructions on how to fill it in are provided on the SUKL website. 
A time limit of 75 days is prescribed for adoption of a decision in administrative proceedings. The set levels and conditions of reimbursement are applicable from the first day of the month following the month when the decision became valid (i.e. when it became final and conclusive). There is no need to apply for inclusion into a General Health Insurance Company list or any other list, the valid SUKL decision on the levels and conditions of reimbursement is sufficient.
In order to decide on reimbursement the maximum ex-factory price must already be fixed or the relevant administrative proceedings must run in parallel. The time limit for joined proceedings covering both the maximum price and levels and conditions of reimbursement is set to 165 days.
In accordance with transitional provisions reimbursement decisions made by the Ministry of Health remain valid from 1 January 2008 without change (i.e. reimbursement levels as of 31 December 2007 are the same as those valid from 1 January 2008)  

Release of information

SUKL publishes an updated list of medicinal products and foods for special medical purposes covered by the health insurance system; the line listing includes all products together with their maximum prices, with justification of decision on price-setting, and levels and conditions of reimbursement with justification of how the rate and conditions of reimbursement were determined.
The above mentioned list is not identical to the General Health Insurance Company list and does not replace the list published by the Ministry of Health (under Section 16b par.1 of Act No. 48/4997 Coll.), of medicinal product covered fully or partially from national health insurance system which indicates the reimbursement levels and level of patient’s co-payment eligible for inclusion in an annual limit.  

Co-payment/Fees

The above mentioned Act No. 48/1997 Coll., as amended, provides for co-payment and fees, however, they are out of SUKL’s competence.
The level of co-payments eligible for inclusion in an annual limit is determined and published by the Ministry of Health. 

VAT change

Since 1 January 2008 the reduced VAT rate has increased from 5% to 9%. Maximum ex-factory prices and reimbursement levels for medicinal products remain unchanged. Thus, without introduction of other changes, the consumer prices and consequently patient co-payments would increase. As regards prescription-only medicines, the 4% VAT increase and higher trade margins on cheaper products are compensated by the pharmacy service fee of 30 crowns, for more expensive products it is partially compensated by reduction of trade margins and also from the 30 crowns service fee. Both mechanisms are laid down in the decision on prices issued by the Ministry of Health.