New Amendment to the Pharmaceuticals Act in the Czech Republic

Czech Republic

A new amendment to the Pharmaceuticals Act was signed by the Czech President on 14 February 2017 (“Amendment”).

Under the Amendment, distributors will be obliged to supply pharmaceuticals within two business days upon receipt of a pharmacy’s request. To do so, distributors will be entitled to request the supply of pharmaceuticals from marketing authorisation holders (“MAH”), who will be required to provide the distributors with pharmaceuticals in a quantity reflecting the distributors’ market share.

The new legislation will also allow the Ministry of Health to categorise certain pharmaceuticals as ‘at risk of shortage’ if the unavailability of the drug could endanger the health and lives of patients in the Czech Republic. In order to export drugs under this category, prior notification to the Czech State Institute for Drug Control (“SIDC”) will be required. The Ministry of Health will have the right to ban the export within 15 days from notification. Exporting pharmaceuticals without the required notification or contrary to the Ministry’s ban will be subject to a fine of up to CZK 20,000,000 (approximately EUR 740,000).

Prior to becoming effective, the Amendment has faced criticism from pharmaceutical companies and distributors. The Chairman of the Czech Association of Pharmaceutical Companies has argued that the requirement to supply drugs to distributors in accordance with market share restricts the competition and may contradict European law, particularly as the method for calculating a distributor’s market share is unclear.

Although the aim of the Amendment is to restrict the exportation of pharmaceuticals from the Czech market, pharmaceutical companies argue that it will have the opposite effect. They state that the lowering of drug prices (introduced as a result of the Amendment) in combination with other provisions of the Amendment will encourage the exportation of pharmaceuticals. Moreover, lower prices may potentially dissuade pharmaceutical companies from placing new drugs on the Czech market. 

If you have any questions related to the Amendment please do not hesitate to get in touch with one of our contacts.