The Hungarian Parliament has amended Act XCVIII of 2006 (Medicines Act), including by introducing Section 40/A to impose a new extra tax payment obligation on pharmaceutical companies marketing innovative products with social security reimbursement in Hungary. The relevant provisions imposing the new extra tax entered into force on 1 August 2012.

According to Section 40/A of the Medicines Act, the marketing authorisation holder of a medicine or - if the marketing authorisation holder does not engage in medicine distribution in Hungary and an agreement has been concluded between the marketing authorisation holder and the distributor concerning the delegation of the tax payment obligation and approved by the Hungarian tax authority - its distributor, must pay 10 % of the amount of reimbursement paid in respect of each medicine proportionate to the manufacturing or import price if:

  • the medicine is sold in pharmacies;
  • the medicine has been reimbursed for at least 6 years;
  • the price of the medicine serving as basis for reimbursement exceeds HUF 1000 (approximately EUR 3.5); and
  • there is no other reimbursed product that (a) contains the same active ingredient; (b) has the same pharmaceutical intake form; (c) has another brand name; and (d) the marketing authorisation holder of which is another entity.

The calculation of the extra tax shall be made per product and reimbursement title.

The National Health Insurance Fund Administration (OEP) will provide data to the pharmaceutical companies and the tax authority relating to the value of the sales and the reimbursement of the products falling under the scope of the extra tax by the 10th day of the second month following the subject month (the first time by 10 October 2012). The pharmaceutical companies shall submit the tax return to the tax authority and fulfil the payment obligation by the 20th day of the third month following the subject month (the first time by 20 November 2012). The tax authority shall immediately transfer the amount of the extra tax to the healthcare budget.

According to the official reasoning of Section 40/A of the Medicines Act, the new extra tax is aimed at products which have been reimbursed for at least six years and which not yet have generic competitor(s) in the market.

Section 40/A of the Medicines Act is not clearly formulated and gives rise to several questions of interpretation as to the scope of products to which the extra tax will apply. To date, no official guidance or interpretation regarding the new extra tax has been issued.