On 1 July 2016, Act no. 340/2015 Coll. on Special Conditions for the Efficacy of Some Agreements, Publication of These Agreements, and on an Agreement Register will come into force. The primary purpose of this Act is the transparent provision of information on the use of public funds and public property. We present below basic information on the new areas of law the Act introduces, with particular emphasis on its impact on the pharmaceutical industry.

From the date the Act comes into effect, the mentioned entities will be obliged to publish via the Agreement Register private-law agreements, agreements on the provision of grants or repayable financial assistance concluded in written form. These entities include state-funded institutions (e.g. state hospitals), local government authority-funded institutions, health insurance companies and legal entities in which the state or any local government authority (on its own or together with other local government authorities) has the majority ownership or through another legal entity (e.g. a number of hospitals fall under this definition). Anyone will be allowed to view the Agreement Register via remote access for free.

The obligation to publish agreements in the Agreement Register applies to agreements which will be concluded on 1 July 2016 and later. This obligation will not apply to earlier concluded agreements unless the agreement is changed, replaced or revoked by any other agreement after 1 July 2016. In this case, the adjusted agreement shall be published along with the “amendment” in the Agreement Register. These rules shall be applied regardless of the governing law of the agreement.

The liable person or contractual party is obliged to publish the agreement via the Agreement Register without undue delay after its conclusion (signed by all parties), but no later than within 30 days via electronic form to the Ministry of Interior’s data box created for this purpose.

Failure to publish the agreement via the Agreement Register results in severe consequences since the Act makes the efficacy of the agreement conditional upon its publication in the Agreement Register. It follows that the agreement will come into effect on the date of its publication, or later if the parties so agree. In addition, if an agreement is not published in the Agreement Register within three months of the date of its conclusion then it shall be void from its inception. The consequences of non-publication shall be firstly applied to agreements concluded on 1 July 2017. The Act does not apply any consequences to agreements concluded before then.

The Act exempts from the publication obligation agreements with a value of CZK 50,000 (excluding VAT; approx. EUR 1,800) and less, as well as agreements on the provision and payment of health services covered by public health insurance, and agreements on payment of medicinal products containing vaccines for routine immunization by an antigenic composition of vaccines which are published under the Act on Public Health Insurance.

The Act assumes a proactive approach of the parties. In the future, it will be necessary to consider whether the person with whom you are going to conclude an agreement is a liable person pursuant to the Act, or whether there is an obligation to publish the agreement in question.

The procedure of passing the Act was complicated and so it will be interesting to see how the Act will be applied in practice, and whether any amendments will occur.