Overview of the Lithuanian pharmacy market

02.03.2020 Overview of the Lithuanian pharmacy market

Rokas Kazakevičius, Associate at TGS Baltic Lithuania, summarises key legal developments related to the Lithuanian pharmaceutical market.

Prices of reimbursable medicinal products have been frozen

In order to be reimbursed in Lithuania, besides other requirements, a medicinal product has to be included in the Pricelist of Reimbursable Medicinal Products (Pricelist). Each Pricelist is valid for a quarter of a year until a new one comes into force. Base prices[1] are calculated for each medicinal product included in the Pricelist, taking into consideration the price of the relatively cheapest medicinal product in a particular group. The Government of the Republic of Lithuania established a new rule for counting base prices for medicinal products. If, while preparing the draft Pricelist for the upcoming quarter, the base price for a particular medicinal product is found to be higher than the price in the Pricelist in force, the lower base price should apply even when the new Pricelist comes into effect. 

The significant implication of this new limitation is that the suppliers of medicinal products lose their ability to respond to market changes. For example, if the supplier raises the price of its medicinal products despite the fact that the base price of the group where that product is included has been frozen, the patient’s co-payment for that medicinal product rises and in case it exceeds the maximum allowed co-payment, the medicinal product might be not included in the upcoming Pricelist. That means that the medicinal products would not be reimbursed anymore. 

The Minister of Health exceeded his competence 

On 23 October 2019, the Supreme Administrative Court of Lithuania (SACL) found that the Minister of Health of the Republic of Lithuania (Minister) had exceeded his discretion while establishing rules, which, according to the Constitution of the Republic of Lithuania, had to be established by the Parliament of the Republic of Lithuania or the Government of the Republic of Lithuania (respectively). 

The SACL found that the Minister had exceeded his competence while establishing the requirement that a person, issued with a prescription for reimbursable medicinal products labelled as “First Prescription”, should be dispensed only the cheapest medicinal products from a particular group in the Pricelist. According to the Minister’s order, if a person refuses to accept the cheapest medicinal product and requests a more expensive one, the more expensive medicinal product would not be reimbursed at all. The SACL found that this regulation encumbers the right of persons covered with the Compulsory Health Insurance to obtain reimbursement for medicinal products from the Compulsory Health Insurance Fund (CHIF). The SACL found that such encumbrance should be laid down by law and not by an order of the Minister.

The SACL also acknowledged that:

  • the Minister is not competent to make a decision to exclude a medicinal product from the Pricelist, as such a right is not directly established by law;
  • the Minister has no discretion to determine the procedure for calculating the base price of reimbursable medicinal products as it is at the discretion of the Government of the Republic of Lithuania; 
  • the Minister is not entitled to allow provisions obliging suppliers to reimburse a certain amount of expenses caused to the CHIF’s budget by the fact that a supplier’s reimbursable medicinal product, having relatively the lowest base price in a particular product group in the Pricelist, has been excluded from the Pricelist due to its shortage and this caused a rise of base prices of the other medicinal products included in that Pricelist group;

The SACL ruled that the said rules established by an order of the Minister must cease to have effect from 31 December 2019. The court reasoned that this decision was necessary in order to create objective opportunities to regulate legal relationships so as not to disrupt the procedures of dispensing reimbursable medicinal products, in order to avoid creating a situation where individuals’ ability to exercise their constitutional and legal rights to health care could be complicated or substantially denied.

The Ministry of Health of the Republic of Lithuania (Ministry) was not able to ensure that all legal gaps would be covered until that date. Thus, the Ministry asked the SACL to postpone the date of the expiry of the legislation mentioned above. The SACL agreed to postpone the said date of expiry until 28 February 2020. However, until that day the Ministry was not able to duly implement all of the changes.

 

[1] The base price of a reimbursable medicinal product is a part of the retail price of the reimbursable medicinal product, according to which the cost of purchasing the medicinal product is fully or partially reimbursed from the budget of the Compulsory Health Insurance Fund.