AUSTRIA Law and Practice Contributed by: Sonja Hebenstreit, Michael Cepic and Maximilian Kröpfl, Herbst Kinsky Rechtsanwälte GmbH
7.5 Trade Blocs and Free Trade Agreements
repeated 18 months after the first price deter- mination and 24 months after the second price determination. The Price Commission can initi- ate a new price determination 18 months after the third price determination. In the case of medicinal products that are not included in the EKO but exceed an annual turn- over of EUR 750,000 at the expense of public health insurance (based on the FAP in the previ- ous 12 months), the Umbrella Organisation of the Austrian Social Insurance (Dachverband, or DVB) must immediately notify the Price Commis- sion, which then has eight weeks to determine an EU average price for the medicinal product. If the determined EU average price is lower than the applied price, the company authorised to distribute must reimburse the difference to the social insurance institutions within six months of exceeding the sales threshold. The DVB applies the principles of price deter- mination in accordance with the rules of proce- dure for the issuance of the EKO, as well as the economic evaluation criteria of the Therapeutic Products Evaluation Commission, and negoti- ates the reimbursement price with the manufac- turer on this basis. Once an agreement has been reached, the reimbursement price specified in the EKO is binding, albeit subject to adaptation in accordance with the EU average price. If, on the other hand, a medicinal product is removed from the EKO by the decision of the DVB, the companies authorised to distribute the drug have the option to appeal to the administrative court. Furthermore, specific price regulations apply if a successor product with the same active ingredi- ent (generic or biosimilar) is available in the EKO.
Austria is a member of the WTO. Furthermore, as a member state of the EU, Austria participates in free trade agreements concluded by the EU member states. It is worth noting that the current EU sanctions against Russia do not provide for trade blocs of medicinal products and medical devices. 8. Pharmaceutical and Medical Device Pricing and Reimbursement 8.1 Price Control for Pharmaceuticals and Medical Devices The price basis of a medicinal product is the manufacturer’s factory or depot selling price ( Fabriksabgabepreis/Depotabgabepreis , or FAP/ DAP). Furthermore, the respective “mark-ups” (wholesale and pharmacy mark-ups, regulated by law) and VAT are added to this price. The FAP/DAP can be freely determined by the com- pany authorised to distribute, and the Ministry of Health needs to be informed of this price. For those medicinal products that are included in the list of reimbursable medicinal products, the so-called Reimbursement Code ( Erstat- tungskodex , or EKO), the “EU average price” is relevant. This average price constitutes the maximum possible FAP/DAP for reimbursable products. For the purpose of calculating the EU average price, the Price Commission of the Min- istry of Health considers the medicinal products with the same active ingredient, active ingredient strength, dosage form and identical (or approxi- mately identical) package size. The Price Commission determines the EU average price six months after the application for inclusion in the EKO is submitted. This is
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