Will there be penalties for violating the continuity of supply of reimbursed drugs?

However, in the background of this important and eagerly awaited legislative process by the pharmaceutical market, we have changes in the law introduced by DNUR, which have only now (as of July 1 this year) come into force. These are, of course, the amended provisions in Article 34 of the Reimbursement Law, concerning the liability of applicants for violation of the obligation to ensure the continuity of supply (and declared supply volumes) of a reimbursed drug. This provision, which provides for the imposition of financial penalties on applicants, in the event of a violation of the obligations of continuity and volume of supply, has so far not been of great concern to applicants, and this is because it was extremely difficult in practice to bring about the punishment of an applicant. This was due to the fact that the law provided two grounds for exemption from liability; the applicant was not obliged to reimburse the National Health Fund for the amount representing the product of the number of non-delivered unit packs of a drug and their official sales price, if the non-delivery of these packs was due to force majeure or the patients' needs were met by an equivalent of the drug that was not delivered.

Due to the above, financial penalty proceedings were initiated against applicants, but in practice there was no obligation on the company to repay the amount indicated in the regulations. This is because companies were usually able to demonstrate that patients' needs were met despite the reduced supply of the reimbursed drug. This could be evidenced not only by the availability on the market of an equivalent of the drug in question, but also by reduced orders placed with wholesalers, high inventories of wholesalers or pharmacies despite the lack of orders, no signals from the market about shortages of the drug in pharmacies, etc.

The above solution was (in the opinion of the Ministry of Health, as evidenced by last year's discussions in the Sejm during work on the enactment of DNUR) imperfect. Therefore, the amended wording of Article 34 of the Reimbursement Law, effective as of July 1 this year, does not provide for exemption from the applicant's liability in situations where, despite the lack of continuity of supply, patients' needs have been met (the force majeure premise still applies).

Instead, a new circumstance was indicated (in Article 34(2) of the Act) that exempts applicants from liability. According to this provision, the obligation regarding continuity of supply does not apply to drugs that are the subject of central tenders conducted by the President of the National Health Fund in the event that a drug supplier for the entire patient population in a given reimbursement indication is selected in this tender for a period of at least 12 months, and to drugs supplied seasonally. This exception should still be clarified in the SNUR, as it lacks reference to other central tenders, such as those organized by the Department of Public Procurement under the Minister of Health.

The new wording of Article 34(2) of the Reimbursement Law also attempted to clarify the concept of failure to meet an obligation to ensure continuity of supply, as past practice had indicated practical difficulties in interpreting this term. Unfortunately, the DNUR's amendment to the wording of this provision not only did not remove the doubts about its interpretation, but actually intensified them. Currently (i.e., as of July 1 of this year), failure to meet the obligation of continuity of supply is understood as lack of wholesale trade, within the meaning of Article 72(3) of the Act of September 6, 2001. - Pharmaceutical Law, of a reimbursed product, consisting in the delivery of the product to a provider or pharmaceutical wholesalers located in the territory of the Republic of Poland during a given calendar quarter in quantities smaller than those resulting from the commitment to monthly deliveries of that quarter, as specified in the administrative decision on reimbursement coverage. What is hidden under this complicated definition? According to the explanations provided by the Ministry of Health during meetings, as well as in the draft communiqué that was consulted with the public in the first half of this year, it is a question of providing an adequate quantity of the reimbursed product (in accordance with the commitment set forth in the decision or, in the case of older decisions, in the application for reimbursement), on a calendar quarter basis. This means that the applicant is not obliged to ensure the right volumes of supply each month, but only at the end of the quarter should be able to demonstrate that these volumes were provided during the quarter.

What's more, the Ministry of Health has assured several times that it will take into account not only the actual supply to the Polish market in a given quarter, but also the quantities of product already available in the market, such as those in the inventory of wholesalers, pharmacies, or even the manufacturer (located in Poland, as long as the batch of product has already been released for marketing). This is significant because this sensible approach relieves applicants of the obligation to supply medicines in excess of patient demand, which would inevitably lead to large additional costs on the part of suppliers and the need to dispose of product quantities not purchased within the expiration date. Therefore, adopting an approach whereby quantities of a product supplied in the previous quarter that have not yet been consumed can be credited against supplies in a given quarter is most appropriate and in line with the purpose of Article 34(2) of the Reimbursement Law, which is to ensure the availability of medicinal products for patients.

So, should there be any fear of financial penalties as a result of the DNUR's revised supply and volume obligation regulations coming into effect (July 1 this year)? Undoubtedly, the risk of being fined increases compared to the previous regulation. Nevertheless, those pharmaceutical entrepreneurs who will strive to ensure the availability of their products adequate to the needs of patients, and who will be able to invoke the circumstance of force majeure if they are unable to do so, have nothing to fear.

Author: Katarzyna Czyzewska

Czyzewski law firm