Amendment adopted to Czech Pharmaceuticals Act to address drug shortages

January 2024 – An amendment to the Pharmaceuticals Act has been adopted by the Czech parliament and officially published.

As already reported in our previous newsletter, the aim of the amendment is to improve the availability of medicines on the market and to mitigate the potential negative impacts of recent and ongoing medicine supply shortages.

The amendment creates new obligations for operators in the medicines market, in particular (i) additional obligations following the interruption or discontinuation of the supply of a given medicinal product; and (ii) a mandatory system of reserve stocks. Following a number of additional changes made by Czech legislators, the national pharma regulator, the State Institute for Drug Control (SUKL), has been granted certain powers to address potential drug shortages.

The key elements of the new law are summarised below:

Obligations after a supply interruption or termination

Under the proposed plan, marketing authorisation holders (MAHs) will be obliged to continue to make available certain medicinal products after an interruption or discontinuation of supplies, with a statutory minimum quantity of either up to twice the given medicinal product’s average monthly usage, or the average monthly supply of the given medicinal product, provided that the given product has been supplied either without interruption or with an interruption not exceeding 20 days in total during the previous two years. This obligation may be also fulfilled by foreign-language-labelled batches of the given medicinal product. However, the Ministry of Health (MoH) will be able to issue exemptions via a special list of medicinal products to which this obligation will not apply. Medicinal products will also generally be exempted for the first 12 months after being placed on the market in the Czech Republic.

In addition, the State Institute for Drug Control (SUKL) will be able to designate certain medicinal products as being “restricted availability” where the MAH has notified an interruption or termination of supplies in the Czech Republic – if the SUKL assesses that the current available quantity of the given medicinal product does not meet the current needs of patients in the Czech Republic. The SUKL will also designate as “restricted availability” substitute medicinal products for which the MAH has notified an interruption in marketing.

Within 30 days of the designation of a medicinal product as “restricted availability”, the MAH must make public any information on the measures taken in the Czech Republic to overcome supply restrictions. At the same time, if they have the given medicinal product in stock, distributors will be obliged to supply such medicinal products to pharmacies within two working days of receiving a request.

Medicinal product reserve system

According to the draft amendment, the MoH should also monitor – using data obtained from mandatory reports by market operators – whether the planned supply of medicinal products corresponds to the anticipated needs of Czech patients. If the MoH assesses that a shortage of a particular medicinal product could occur, it will include the product in a so-called reserve stock system. Under this system, medicinal products can be included for a maximum period of 12 months, with the possibility of an extension for a further 12 additional months.

Distributors of medicinal products will then be obliged to establish and maintain pharmacy stocks in a quantity corresponding to the respective average monthly supply. Such a new mechanism, therefore, envisages a greater synergy between drug manufacturers and distributors in order to ensure better availability of medicinal products on the market. At the same time, the amendment is also intended to improve communication and exchanges of information between MAHs and the public administration on the actual availability of medicinal products on the market.

Distributors will also be prohibited from distributing medicinal products abroad that have been marked as “restricted availability”, thus preventing further exports when it is already evident that availability is or will soon be restricted.

Additional powers for the MoH and SUKL

The amendment also grants additional powers to the MoH to implement general measures that allow the ministry to modify the conditions for the distribution, prescription and dispensation of any medicinal product deemed essential for the provision of health services, if its availability is threatened. The need for such general measures by the MoH will be assessed on the basis of up-to-date information on the availability of medicinal products, with a view to possibly amending the conditions for their distribution, prescription or dispensation, including the duration of any such restriction. Such information must be provided by SUKL without undue delay upon request.

SUKL has also been given new powers to issue measures that temporarily correct or amend the maximum price, quantity and conditions of reimbursement for a given medicinal product whose availability may be threatened, or which is deemed to be critical for the protection of public health, provided that such measures are in the public interest and the applicable statutory conditions are met.

The amendment entered into force on 1 January 2024, with the exception of certain provisions relating to the reserve system and the marking of products as "restricted availability", which will enter into force on 1 June 2024.

It remains to be seen how these precautionary measures will be used in practice. In our view, they will only be used in special circumstances to address and correct temporary market imbalances.

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