Offsetting of clawback of pharmaceutical expenditure with research and development (R&D) expenditure

Article 20 of Law 4633/2019 (A’ 161/16.10.019) adds a provision to paragraph 1 of Article 11 of Law 4052/2012, which introduces the possibility of offsetting the total amount of the clawback regarding the pharmaceutical expenditure of the Greek National Organization for Health Care Provision and the hospital pharmaceutical expenditure paid by Marketing Authorization Holders of pharmaceuticals or pharmaceutical companies, with the amount corresponding to: a) a percentage of research and development (R&D) expenditure, including clinical trial expenditure, which is directly related to specific targeting and reasoning research and development activities, b) a percentage of expenditure corresponding to investment development plans of products, services or production lines.[1]

According to the law’s explanatory report, the added provision seeks to enhance clinical research in Greece, with the expected benefits of: (a) more direct access for patients to innovative treatments under development, (b) the creation of new jobs, (c) strengthening the national economy and the annual growth rate, (d) more direct academic cooperation with the business community, (e) improving clinical practice in hospitals, (f) reversing the flight of human resources abroad.

The joint decision of the Ministers of Finance, Development and Investment and Health which determine the specific terms, conditions, and generally any matter related to the application and implementation of this legal provision, is of particular interest and highly anticipated, since its content will complement the legislative initiative and will allow for an overall assessment of it. However, certain parameters and criteria upon which this arrangement will be evaluated as a whole are already outlined, such as:

• Its contribution to maintaining the ‘temporary’ mechanism of claw-backs.
• The relativization of the claw-backs mechanism through it, and the suitability of establishing a “competitive” relationship between the viability of social security organizations and research and development in the field of medicine.
• The ‘cross-border’ implementation and impact of the relevant arrangements
• The compatibility of the provision with the principle of equality / equal treatment [introduction of lawful or not (discriminatory) distinction for those who cannot benefit from these provisions].
• The compatibility of the introduction of the relevant provisions (without prior specific thorough and scientifically documented study showing that these arrangements will not substantially disrupt the proper functioning of the public health system) with the provisions of Art. 106 par. 1 of the Constitution.
• The balancing of conflicting public interests/benefits, in particular the need to reduce and contain public expenditure and safeguard the viability of social security organizations on the one hand, and health research and development (R&D) on the other.
• The appropriateness of the connection of the “offsetting” provided with the provisions on deducting the costs of scientific and technological research referred to in Art. 22A and 23 of Law 4172/2013 (A ‘167).
• The effectiveness of these provisions in view of the objectives pursued (as expected to be specified by the JMD).

[1] Article 20 ‘Offsetting of clawback of pharmaceutical expenditure with research and development (R&D) expenditure’: In paragraph 1 of Art. 11 of Law 4052/2012 (A’41), an indent g is added, which reads as follows: “g. The total amount of the clawback regarding the pharmaceutical expenditure of the Greek National Organization for Health Care Provision and the hospital pharmaceutical expenditure paid by Marketing Authorization Holders of pharmaceuticals or pharmaceutical companies may be set off, in accordance with the provisions of Art. 22A and 23 of Law 4172/2013 (A’167), with the amount corresponding to a) a percentage of research and development (R&D) expenditure, including clinical trial expenditure, which is directly related to specific targeting and reasoning research and development activities, b) a percentage of expenditure corresponding to investment development plans of products, services or production lines. A joint decision of the Ministers of Finance, Development and Investment and Health shall lay down any specific terms and conditions and shall regulate any matter related to the application and implementation of this provision.