There’s plenty in the pipeline in the healthcare and pharmaceuticals sectors. In 2018 it will be decided, for instance, whether and, if so, when the proposed transfer of tasks such as the healthcare merger test from the Netherlands Healthcare Authority (“NZa”) to the Netherlands Authority for Consumers and Markets (“ACM”) will take place. Questions related to the functioning of the healthcare system, the manner of assessment of healthcare mergers, the waiting lists, the duty of care and the reimbursement rates for contracted and non-contracted healthcare are high on the agenda for 2018. Against this backdrop, the pressure on the NZa and ACM to arrange for timely and effective supervision will increase further in 2018.

Healthcare mergers: low turnover thresholds extended and notification violations fined

The trend of the NZa’s and ACM’s discouragement of healthcare mergers will continue in 2018. In 2017, the opportunity presented itself to set different thresholds for healthcare mergers at ACM. Despite specific suggestions, the Ministry of Economic Affairs and Climate Policy (“EZK”) did not make use of that opportunity. At the end of 2017, the Ministry extended the lowered turnover thresholds by a further five-year period until 2023. Also, the proposed reassignment of the healthcare merger test from the NZa to ACM will not take place before 1 January 2019. Most likely, the double healthcare merger test by the NZa and ACM will therefore remain in place in 2018. In late 2017, the NZa fined a healthcare provider for the first time for late notification of a transaction. In 2018, it therefore remains important to check in good time whether the low thresholds applied by the NZa and ACM in the assessment of healthcare mergers are being met. While the NZa reported that it would sanction gun-jumping, ACM announced that it may be more inclined to prohibit hospital mergers in future. ACM gave that signal because a study had allegedly shown a relative increase in prices as a result of hospital mergers. Despite ACM’s signal regarding its critical assessment of hospital mergers, healthcare mergers involving large market shares may therefore still be given the go-ahead in 2018, as was the case in 2017. The Mededingingswet (Dutch Competition Act) has not yet been amended; if ACM wishes to prohibit a merger, it must therefore be able to demonstrate also in 2018 in respect of every individual healthcare merger that it significantly reduces competition. It is remarkable in this regard that ACM’s own study also suggests that not all mergers lead to price increases. Be that as it may, ACM cannot deny in 2018 either that studies of its own (see here, here, here and here) show that the procurement power of healthcare insurers will not decrease in 2018 and that, as in 2017, healthcare insurers can exercise compensating procurement power in the event of mergers.

Procurement of healthcare: enforcement of the Healthcare Procurement Regulations, duty of care of healthcare insurers, impediment criterion and transparency by healthcare insurers are focus points in 2018

The government has a preference for contracted care over non-contracted care. The trend towards long-term agreements between healthcare providers and healthcare insurers will furthermore increase in 2018. It will therefore be increasingly important for healthcare providers to be aware of their rights in the healthcare procurement process, and possibly also to explore the possibilities of working together in that process. See in that regard the 12 tips for the healthcare procurement process. For an explanation of the developments in the healthcare procurement procedures, please visit this blog.

In 2017, healthcare providers challenged a turnover ceiling that they considered too low and the NZa was forced to mediate in the healthcare procurement process in the mental healthcare sector. While first-line healthcare providers complained to the NZa that the rates were too law, ACM emphasised as it had done in the past that a collective boycott of healthcare insurer’s contracts is in breach of the competition rules. This will not leave healthcare providers empty-handed in relation to healthcare insurers in the 2018 contracting process: healthcare providers and their trade associations may request the NZa, as in the past, to take enforcement measures against healthcare insurers. In late 2017, the NZa fined a healthcare insurers De Friesland Zorgverzekeraar in response to an enforcement request on the grounds of breach of the NZa Transparency in the Care Procurement Process Regulations (the “Healthcare Procurement Regulations”). The mandatory rules that healthcare insurers must observe under those regulations were supplemented at the start of 2018.

Although the NZa was satisfied in 2017 with the healthcare procurement by healthcare insurers, it also had to face facts in 2017. The problems with waiting lists increased exponentially and no or insufficient progress was being made, as the NZa acknowledged. With regard to its supervision of the duty of care, the NZa expects healthcare insurers to actively attempt to keep waiting times within the so-called Treek standards. The NZa’s new Policy Rules on the Duty of Care Assessment Framework aim for a more active form of supervision. The public demand that the NZa suits its action to its words will increase in 2018. In light of the NZa’s supervision style, healthcare providers are well advised to notify the NZa in a timely manner of any imminent breach of the duty of care. In 2018 the discussion about limiting the free choice of doctor, i.e. Section 13 of the Healthcare Insurance Act, is on the agenda again. This year the question will rise as to how long the NZa and ACM will continue to allow healthcare insurers a free hand in providing information on policies and the reimbursement of non-contracted care. It goes without saying that ACM’s approach to the enforcement of rules regarding the correct statement of prices of airline tickets, package deals and holiday homes will also impact the healthcare sector at some point. The NZa and ACM themselves have noted that it is unclear to consumers what additional amount is due if care is purchased from an uncontracted healthcare provider. That applies in particular when the healthcare insurer refers in that regard to reimbursement based on a percentage of an average rate contracted by the healthcare insurer.

Expensive medicines: abuse of a dominant position?

In 2017, the Commission reported that it was investigating whether charging excessive prices in the sale of expensive medicines constitutes abuse of a dominant position. In several countries, such as the United Kingdom and France, studies are being performed into price fixing of (expensive) medicines. We expect that European competition authorities will become increasingly interested in this topic in 2018, after which the Netherlands will have to follow suit. The Dutch coalition agreement states that the pharmaceuticals industry will be stimulated and, if necessary, urged to set low prices. The Dutch minister for medical care has furthermore announced in response to advice from the Raad voor Volksgezondheid en Samenleving (Council for Public Health and Society) that he will be investigating the possibilities of introducing compulsory licences for pharmaceuticals manufacturers. The Dutch minister for medical care emphasised that he will thoroughly investigate that option. He will also consult with ACM as to whether high prices for new medicines constitute abuse of a dominant position. In light of earlier experiences we do not consider it likely that ACM will take enforcement measure of its own accord. It will in any event refer to its earlier observations on this subject. ACM reported in that regard that “a brand manufacturer (originator) can sometimes be called to account under the Competition Act. In other cases that is not possible; other parties must then take action to control the costs of pharmaceuticals”. With regard to the latter point, ACM will continue to draw attention to the possibilities that it identifies for collective procurement of medicines. This does not alter the fact that the developments in competition regulation in Brussels and other EU Member States may (in due time) also impact the pharmaceuticals market in the Netherlands.