Commercial drug names will no longer appear in hospital records
New amendments to Cabinet of Ministers Regulations No. 265 “Procedures for Keeping Medical Documents” have recently been adopted by the Cabinet of Ministers. The plan is that from 1 January 2020, when providing information on medicines to be used for further treatment, only the active substance will be indicated in hospital records. These amendments were made shortly after recent changes to Cabinet of Ministers Regulations No. 899 “Procedures for Reimbursement of Expenditure for Acquisition of Medicinal Products and Medical Devices Intended for Outpatient Medical Treatment”, under which commercial names of drugs will no longer appear on prescriptions of medicine by doctors.
- Press release from the Ministry of Health of the Republic of Latvia, available through the link (in Latvian).
Competition Council publishes report on financial availability of medicines
On 25 November 2019, the Latvian Competition Council published a market supervision report on “Price formation of medicines and possible restrictions on competition affecting the financial availability of medicines” (in Latvian). The aim of the report was to consider the factors affecting prices of medicines in Latvia and their financial availability.
The Competition Council concluded that the mark-up mechanism for non-reimbursable non-prescription medicines encourages resellers to sell the most expensive medicines among medicines of the same type. Regarding reimbursable medicines, the Competition Council considers that the pricing mechanism currently motivates wholesalers to offer and sell more expensive medicines, while pharmacies could be interested in selling medicines with a producer price under EUR 100 per package. This is because a pharmacy’s mark-up becomes fixed as the producer’s price reaches EUR 100.
In Latvia, currently 8-26% of a medicine’s final price consists of the producer’s and the pharmacy’s mark-up. In general, the Competition Council has recognized that mark-ups on medicines are high and in most cases may not be objectively justified.
However, the requirement to indicate the general name of a medicine when prescribing reimbursable medicines was pointed out as a positive effect. This results in issuing the medicine with the lowest price and therefore motivates producers to maintain low prices.
Overall, the Competition Council suggests that the Ministry of Health should review the mechanisms for setting the price of medicinal products in cooperation with other authorities responsible for the industry.
The Ministry of Health has commented on the report and states that it is already working on reviewing the current regulation. Draft amendments are expected to be ready by the end of this year.
- Competition Council report on “Price formation of medicines and possible restrictions on competition affecting the financial availability of medicines” link (in Latvian);
- Press release by the Latvian Ministry of Health available through the link (in Latvian).
Amendments to procedure for distribution and quality control of medicinal products
New amendments to Cabinet of Ministers Regulations No. 416 “Procedures for Distribution and Quality Control of Medicinal Products” have recently been passed at the State Secretary meeting. The amendments aim to implement effective and transparent control over medicine wholesalers’ supplies. This is because during 2018 and 2019 the State Agency of Medicines received 659 reports on shortages of medicines, whereas the deficiency was objectively justified in only 358 cases. This implies that in the remaining cases medicine delivery was rejected when there was no actual shortage of supply. In future, wholesalers will be required to submit daily reports on medicine supplies to the State Agency of Medicines. The reports will include the name/description of the medicine, the concentration, the number of doses in a package and the number of packages available. The State Agency of Medicines will also supervise ordering and delivering procedures between wholesalers and pharmacies. Every export of state reimbursable medicines on which individual financing contracts are concluded will require permission from the State Agency of Medicines. The new regulation is expected to lower the risks of medicine shortages in pharmacies.
- Cabinet of Ministers official portal on legislation, available through the link (in Latvian).