The 2015 State Budget, enacted by Law No 82-B/2014, published on 31 December (“2015 SB”), has established the following rules concerning the Pharmaceutical Industry, which may have a significant impact on the revenues and charges attributable to holders of marketing authorisation (“MA”) for medicinal products:
- Article 166, amending the scope of the fee applicable to the sale of medicinalproducts established in Decree-Law No 282/95 of 26 October. With this amendment, the scope of application of the fee on the sale of medicinal products is now the same as the one of the extraordinary contribution from the pharmaceutical industry, that is, this fee will now apply to “entities selling for the first time, for valuable consideration, in the national territory, medicinal products for human use, irrespective of whether they are holders of a marketing authorisation or registration, or their representatives, intermediaries, wholesalers or simply suppliers of medicinal products under an exceptional use authorisation, or an exceptional authorisation, for medicinal products”;
- Article 167, amending the pricing system for medicinal products for hospital use, with a view of reducing the prices of medicinal products acquired by the national health system hospitals, introducing provisions that lay down new maximum limits for the price of sale to the warehousemen of all prescription only medicinal products whenever the same are purchased by health national system hospitals. This amendment also lays down a new, stricter sanction mechanism, which even provides for the strict liability of the holders of marketing authorisations, with regard to the obligations relating to medicinal products pricing
- Article 168, establishing an extraordinary contribution for the pharmaceutical industry (“PI Contribution”), as follows:
- Reimbursed medicinal products (including in related groups ) 2.5%;
- Not included in related groups and with a marketing authorisation granted 15 or more years ago, 2.5% and with a price of less than 10 euro, other cases 10.4%);
- Restricted prescription only medicinal products, as well as those in respect of which an exceptional use authorisation has been issued or that are intended for hospital use (14.3%), medicinal gases and products derived from human blood and human plasma (2.5%), orphan drugs (2.5%).
To begin with, it should be noted that there is an alternative scheme to the PI Contribution. Pursuant to the law, the entities that may come to join the agreement between the Ministries of Finance and of Health and the Pharmaceutical Industry, represented by APIFARMA, on 21 November 2014 (“Agreement”) are exempted from the PI Contribution. Considering this alternative, below is a brief analysis of the PI Contribution as opposed to the scheme set out in the Agreement.
The PI Contribution raises a number of questions with regard to its lawfulness and constitutionality.
As a first remark, the 2015 SB qualifies the PI Contribution as “extraordinary contribution”, which could indicate its qualification as special contribution. But real special contributions are subject to the principle of equivalence, and are only valid if they arise as a result of (i) a consideration for a public activity or (ii) their function of socialization of negative or positive externalities.
However, the PI Contribution does not meet either requirement, which raises the question of the breach of the principle of equivalence. Accordingly, the above-mentioned extraordinary contribution, should it be defined as special contribution, would be unconstitutional, on account of the breach of the principle of tax equality enshrined in Article 13 of the Constitution, and of which the principle of equivalence is mere an expression.
However, it should be noted that the 2015 SB does not expressly announce the PI Contribution as temporary, which precludes it from being defined as a special contribution and, therefore, of being underpinned by the principle of equivalence. Indeed, instead of a special contribution, the PI Contribution is closer to a hidden tax, and would seem to be aimed at unilaterally and coactively collecting revenue.
Accordingly, even qualifying the PI Contribution as special tax or tax with extra-fiscal purposes, and making the same subject to the legal framework of taxes, the same would, even then, in our opinion, be unconstitutional. To begin with, on account of the breach of the principle of fiscal capacity, as the contribution in question individualises an arbitrary group of taxable persons, in respect of which there are no signs of any increased economic strength to justify the additional tax.
Secondly, because it breaches the single nature of income tax, since it is configured as a taxation of assets which cannot be deducted from income tax and cannot be qualified as wealth tax either.
Thirdly, because the PI Contribution taxes income without considering specific deductions and the actual situation of companies, and therefore does not uphold the principle of fiscal capacity of legal persons, which points toward a taxation of companies in accordance with their actual income, which also causes its unconstitutionality.
Moreover, as referred to above, the scope of application of the PI Contribution is the same as that of the fee on the sale of medicinal products, that is, the entities subject to the PI Contribution are also those “selling for the first time, for valuable consideration, in the national territory, medicinal products for human use, irrespective of whether they are holders of a marketing authorisation or registration, or their representatives, intermediaries, wholesalers or simply suppliers of medicinal products under an exceptional use authorisation, or of an exceptional authorisation, for medicinal products”; although double taxation is not in and of itself prohibited, in this case, the accumulation of the PI Contribution with a fee
charged on the same taxable matter strengthens the argument of the breach of the principle of proportionality and of fiscal capacity.
It is therefore concluded that it is possible to sustain the unconstitutionality of the PI Contribution, irrespective of the same being set as a special tax, a tax with extra-fiscal purposes or a special contribution.
As referred to above, the entities concerned by the PI Contribution may choose to join the Agreement entered into between the Ministries of Finance and of Health and the Pharmaceutical Industry, represented by APIFARMA, whereby they will be exempted from the payment of the PI Contribution.
This Agreement establishes the value of the contribution of the Pharmaceutical Industry towards expenses with medicinal products in the scope of the national health services, aiming to reduce public expenditure with medicinal products. In this connection, the Agreement established the payment of a contribution by the companies associated with APIFARMA of a minimum value of EUR 135,000,000 (having as reference the total value of EUR 180,000,000 for the entire pharmaceutical industry); the sum to be paid by each company associated with APIFARMA must be determined in accordance with a formula to be established by APIFARMA.
The determination of the above–mentioned contribution by the Pharmaceutical Industry with a view to reducing public expenditure with medicinal products in 2015, is underpinned by an objective of public expenditure with medicinal products of the national health system of EUR 2,000,000,000. Taking this objective into account, the Agreement also provides for an additional contribution by the companies that joined the Agreement, to the effect of these companies paying the amount of public expenditure with medicinal products sustained by the national health system, in excess of such maximum objective of EUR 2,000,000,000.
Indeed, pursuant to Clause 3(7) of the Agreement, the payment of the amount in excess of such maximum expenditure objective, must be made by the companies that joined the Agreement during the first quarter of 2016. Additionally, the same provision sets out that “The companies associated with APIFARMA and that joined the Agreement are only responsible for the part attributable to them in the increase of the public expenditure with medicinal products in the national health service, in the proportion of the corresponding market share.”
It should also be mentioned that the content of the Agreement is very similar to the one entered into by the parties, with the same purpose, for 2014. And the latter also established, in Clause 3(7) thereof an increase of the contributions from each company associated with APIFARMA that joined the Agreement, in case the 2 thousand million euro expenditure limit is exceeded.