Last year, the Spanish Government initiated a legislative procedure designed to update the legislation developing the Reference Price System in Spain. The Ministry of Health drafted an Order detailing the new structure of the Reference Price System and submitted it to the Council of State. However, the Council then reported that an Order was not the appropriate legal vehicle to regulate this matter. As a consequence, the Ministry of Health has adopted a Draft of Royal Decree on the Reference Price System (the "Draft"). The current Draft would make amendments of paramount importance to the current Reference Price System.

Inclusion of biological medicinal products in the Reference Price System

To date, according to a Spanish Order on medicinal products, banning substitution, a pharmacist was not allowed to substitute a biological medicinal product unless it was expressly authorised by a healthcare professional. The Draft now foresees that a reference group may include one generic or biological medicinal product, which may in the future entail a change to the non-substitution rule applying to biological medicinal products.

Requirement of effective commercialisation

The Draft indicates that a group of reference products may only include medicinal products which have been effectively commercialised by the marketing authorisation holder with the health authorities. Therefore, non-commercialised products shall not be included.

Medicinal products for hospital use shall be included in the Reference Price System

To this end, the competent public administration will have to provide to the Ministry of Health the information on the number of units or packages of medicinal products sold to public hospitals.

Licensed products are exempted from the Reference Price System if no generic medicinal products exist

A reference group could be created even if no generic or biological of a certain medicinal product exists if (i) it has been 10 years since the medicinal product in question or its active ingredient was authorised by a Member State, and (ii) a medicinal product, different from the original one and its licenses, exists. However, the Ministry of Health will carry on an individual revision of the prices of those medicinal products affected by this exception, within one year.

In connection with the foregoing, the marketing authorisation holder or its local representative in Spain must inform the Ministry of Health about the licenses of innovative medicinal products that have been granted. Regarding those presentations of licensed medicinal products already included in the NHS before the Royal Decree enters into force, such communication must be done within one month from the day of entry into force of the Royal Decree.

New threshold for price reduction

Another significant amendment is regarding the minimum threshold under which a pharmaceutical company will not be obliged to reduce its prices. While in the initial version of the Draft the threshold was set at 20% of the average cost per prescription of the previous year, such percentage has been lowered to 15% (i.e. €1.60, considering the average cost per prescription during 2013).

Moreover, it must be noted that according to the initial version of the Draft, the new prices would be applicable from the day after the entry into force of the first Order published after the publication of this Royal Decree. However, under its current version, the new prices will apply from the date of application of the correspondent Order.

Finally, it must be considered that the Draft may be subject to further amendments. In fact, once the Council of State finalises its review of the text and issues its correspondent report, the Ministry of Health may modify the Draft in order to include the Council of State's amendments. Afterwards, the final version of the Draft will need to be submitted to the Council of Ministers and, should this body approve it, then it will be finally published in the Official State Gazette.