Austria: (No) Removal From The Reimbursement Code

Last Updated: 31 July 2019
Article by Rainer Herzig

Introduction

The Austrian Social Security pays for medicinal products included in the Reimbursement Code ("Erstattungskodex"). The manufacturer or authorized distributor1 and the Main Association of Social Security Institutions ("Hauptverband der Sozialversicherungsträger") have to agree on the price which is paid to the originator for the medicinal product by social security. Upon entry of a generic in the Code the originator has to reduce the price that the product remains in the Code. Upon the entry of the third generic a further price reduction has to be agreed upon. If the Main Association and the originator do not agree on a price, the product is removed from the Reimbursement Code.

Facts

The originator's proprietary medicinal product Subutex was listed in the yellow area of the Reimbursement Code. Upon the entry of the third generic Buprenorphin in the yellow area the Main Association requested the removed Subutex from the Reimbursement Code, because they could not agree on a new price recommended by the Evaluation Commission of Medicinal Products. The originator claimed that there exists a considerable interest of the group of insured persons in the retention of Subutex in the code, thus justifying a higher price: Substitution patients (persons using the medicinal product because of their drug addiction) would refuse generics respectively would terminate the substitution treatment or switch to other less suitable and ultimately more expensive active ingredients, if they no longer receive the original product.

In its appeal to the Federal Administrative Tribunal the originator submitted extensive data on duration of therapy, discontinuation rates, consumption and mortality during and after termination of treatment. The originator did not submit any data on the proportion of substitution patients who have relevant reservations against generics causing them to discontinue the therapy or to switch to another active ingredient. The tribunal argued that the submitted French publication of 2012 shows that the arguments and the rejection by patients is not always justified, but often caused by inadequate information. The publication of 2011 was only a descriptive summary of (non-systematic) compiled studies and clinical case reports. The originator therefore could not prove an interest of the community of injured persons as an exception justifying a higher price than that of the third generic.

In legal terms the Federal Administrative Tribunal stated, inter alia, that it was necessary to examine whether the originator had offered a reasonable price reduction or the refusal of this offer by the Main Association was technically justified. It is basically consistent in the system of the Reimbursement Code to provide the same prices for products with the same active ingredient. However, due to certain characteristics of the original product or the treated diseases (e.g. a switch of patients to a generic only under difficulties) a "significant" interest of the insured persons can justify the remaining of the original product in the code the higher price. However, the originator did not provide any evidence that would justify a refusal of the price reduction to the level of the third generic. The expert statements submitted by the originator were not appropriate to disprove without further evidence the therapeutic equivalence of the generics and Subutex.

Although the originator had requested an oral hearing, the tribunal considered that an oral hearing was not necessary. Appeals concerning the Reimbursement Code are subject to the prohibition of introducing new evidence. The facts had been established by the Main Association so that the Administrative Tribunal confirmed the evidence taken by the Main Association.

The originator lodged a complaint with the Constitutional Court which was dismissed and referred to the Supreme Administrative Court2.

Decision

In the proceedings before the Supreme Administrative Court3 the originator argued that the main question was whether the switch from drug addicts from Subutex to Buprenorphin-generics causes the alleged difficulties already raised in the first instance procedure (higher probability of treatment discontinuation, increased mortality, etc). For this purpose, the originator had submitted a variety of scientific documents and, in support of these allegations, a witness or expert's proof. The appeal to the Federal Administrative Tribunal concerned mainly questions of fact. Therefore, the Federal Administrative Tribunal would have had to hold an oral hearing. The originator's right to listing and distribution of Subutex for a certain price were a "civil right" in the sense of Article 6 ECHR. Furthermore, there is no caselaw of the Administrative Court on the question of the "evidential value of statements by individual experts within the meaning of sec 24 (3) VO-EKO". In particular, it appears questionable whether the Federal Administrative Tribunal may deny an evidential value of such evidence. The Federal Administrative Tribunal had simply overruled these comments without citing scientific evidence for his opinion. According to Article 6 (2) Directive 89/105/EEC (Transparency Directive) the decision not to include a medicinal product in the list of reimbursable products must be based on objective and verifiable criteria. It is unclear on which considerations of the Main Association, the Federal Administrative Tribunal or the Evaluation Commission were based. Neither the Main Association nor the Federal Administrative Tribunal had complied with he obligation under Article 6 (2) of the Transparency Directive.

The Supreme Administrative Court cited sec 351c (10) Social Security Act, which reads:

"If there is a successor product (generic) for a proprietary medicinal product the following applies to maintain the financial equilibrium of the social security system:

1. The Main Association has to agree with the manufacturer of the original product on a price reduction of 30 %, so that the proprietary medicinal product remains in the code. For the inclusion of the generic in the Reimbursement Code the Main Association agrees with the manufacturer of the generic on a price which is 25,7 % below the reduced price of the original product. All further generics shall be included by the Main Association in the code if there is a sufficient difference in price to the first generic. As soon as a third price reduction is caused by a generic, the Main Association may agree with the manufacturer of the original product on a further price reduction. If no agreement is achieved, the original product is removed from the code."

In its decision of March 14, 20124 the Constitutional Court had stated that notwithstanding the use of the term "may" the request for a further price reduction of the original following the third price reduction through a generic is not at the discretion of the main association. The Main Association is not free to agree with some manufacturers on a reduction and to spare others from a reduction nor may it refrain from the removal of the original product in case no agreement is reached. In its decision of March 11, 20145 the Constitutional Court emphasized that there continues to be a "significant" interest of the insured persons in the presence of the original product in the Reimbursement Code as part of the social health insurance, due to certain characteristics of the original product or the treated diseases e.g. a difficult switch of patients to a generic. Although it is basically consistent to provide the same prices for the same products in the system of the Reimbursement Code, the Main Association has to consider such interest caused by conversion difficulties in the negotiations with the originator and to evaluate the economic interest of social security. The scope to be observed by the Main Association is sufficiently defined by the constitution. The necessary legal protection of the originator is secured by the fact that the decision of the Main Association is subject to appeal.

The Administrative Court followed this opinion in respect of the relevance of conversion difficulties from original products to generics.

In the complaint or in the response to the complaint the originator and the Main Association may only refer to facts and evidence at the time of the decision of the Main Association. The submission of new facts or evidence in the appeal proceedings is only permitted to support or rebut the facts and evidence already put forward in first instance. Such new facts and evidence must be taken into account only if they are either filed already in the appeal or in the response to the appeal.

The objective of the first–instance medical–therapeutic evaluation by the Evaluation Commission is to quantify the benefit of the treatment of a certain group of patients with a specific medicinal product in comparison to therapeutic alternatives. In case of products with the same active ingredient it can be assumed that there is no additional therapeutic benefit so that the health-economic evaluation has to be made according to sec 25 (2) VO-EKO. Only in exceptional cases medicinal-therapeutic reasons such as the described difficulties in conversion could justify that the product remains in the Reimbursement Code. The Evaluation Commission has to assess the validity of evidence according to the catalogue of criteria in sec 24 (3) VO-EKO (reaching from prospective studies to expert statements). The evaluation by the commission has to comply with the criteria of science, transparency and health-economic evaluations. If the evaluation is conclusive it has the weight of an expert's opinion. The Main Association (and in case of appeal the Federal Administrative Tribunal) may overrule this opinion only if it is non-conclusive respectively it is contradicted by valid expert opinions.6 That the alleged conversion difficulties are to be expected in the present case, is a technical question to be answered by an expert. If the parties submit opinions of other experts they have to be reviewed and verified by official or non-official experts as an subsidiary body of the Federal Administrative Tribunal where appropriate. The "validity of evidence" (the informative value of the documents) according to the quality criteria of sec 24 (3) VO-EKO does not mean that "subordinate" documents lack any decisive value of evidence. The originator has requested an oral hearing. The Federal Administrative Tribunal may refrain from an oral hearing only in case the files indicate that an oral discussion cannot contribute to the clarification of the dispute. In the present case the Federal Administrative Tribunal had to verify whether drug addicted patients (potentially suffering under psychiatric disease) may experience conversion difficulties also in case of proper medical education and treatment.

There is no indication that for the identification of potential conversion difficulties alleged by the originator it may be assumed that the oral hearing cannot contribute to the clarification, particularly since it is not only "a question of technical nature" but the taking and discussion of expert evidence against a controversial backdrop. It is one of the fundamental duties of the Federal Administrative Tribunal, to take account of the principle of immediacy according to sec 24 VwGVG to get a personal impression of the credibility of witnesses, parties and also the opinions of experts and to base its assessment of evidence on this impression. If an oral hearing has to be held according to Article 6 ECHR/Article 47 GRC it is not necessary to assess the relevance of this violation of procedural rules. The decision therefore had to be set aside.

Comment

The Administrative Court stressed both the importance of an oral hearing if requested by the parties and appropriate to clarify the facts but also the importance of taking into account conversion difficulties between original products and generics for the maintenance of the entry of the original medicinal product in the Reimbursement Code at a higher price.

Footnotes

1. Hereinafter referred to as originator.

2. Constitutional Court, September 24, 2018, E 4056/2017-18.

3. Administrative Court, January 29, 2019, Ra 2018/08/0238 (ECLI: AT: VwGH: 2019: Ra 2018080238.L00

4. B970/09, VfSlg 19631.

5. B1451/2011, VfSlg 19857.

6. Supreme Administrative Court July 6, 2016, RO 2016/08/0012, VwSlg 19415A.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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