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Serbia: Confidentiality in Managed Entry Agreements Under Serbian Law

Serbia: Confidentiality in Managed Entry Agreements Under Serbian Law

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Managed Entry Agreements consist of various forms of confidential arrangements between pharmaceutical companies and paying healthcare systems that aim to facilitate access to new technologies in public healthcare systems. MEAs make innovative and costly medicines or medical technologies affordable to patients by providing conditional access to a reimbursement system for a limited period and on balanced terms.

In Serbia, the first MEAs emerged in 2016, two years after they were introduced in the Rulebook on Conditions, Criteria, Method, and Procedure for Including Medicines on the List of Medicines Financed by the National Healthcare Fund. The Rulebook mentions four types of MEAs. Cap agreements enable manufacturers to contribute to the cost of the medicines by limiting the number of patients whose healthcare costs are reimbursed by the NHF (volume-cap) or by setting overall budget caps (value-cap). Beside the financial agreements, the Rulebook provides for performance-based “risk-sharing” arrangements or other agreements allowed under the national competition rules.

In practice, however, the NHF relies mainly upon financial agreements. A bonus agreement provides discounts for public purchasers in the form of additional quantities that are delivered free of charge and cross-subsidization, where the price of one medicine is funded from the price of another. From 2016 to 2018 the NHF signed just 28 MEAs, predominantly for List C medicines, which include the most costly and innovative medicines for treating serious diseases.

Very little information is currently shared or published about MEAs in Serbia, since the entire process, including the procurement phase, is kept confidential under non-disclosure provisions in the MEAs. The confidentiality leaves sufficient room for the parties to agree on better reimbursement prices without the threat of external reference-pricing being triggered in other countries. 

MEAs are subject to Serbia’s Freedom of Information Act, but the FIA contains several exemptions that allow public entities to withhold requested information, and MEAs appear to qualify. For instance, disclosing business secrets would be likely to prejudice an interest protected under the law, such that the interest in keeping the information confidential would outweigh the public interest in disclosing the information. The concept of a business secret is defined broadly – according to the relevant rules, a business secret is any undisclosed information that has commercial value because it is not generally known or accessible to third parties who could generate financial benefit by using or disclosing it – so many types of commercial information could potentially be treated as exempt from FIA disclosure.

In addition, in some cases disclosing certain information could prejudice the government’s ability to manage national economic processes or significantly impede the achievement of justified economic interests.

The Information Commissioner (Poverenik za Informacije od Javnog Znacaja) in Serbia usually suggests a narrow interpretation of the exemption. That makes it difficult for public authorities to prove that the public’s interest would be damaged by disclosure. However, we believe that MEAs – at least their financial details, if not their existence – could qualify as exempted information. There are numerous arguments in favor of the benefits generated through MEAs, especially when the NHF is struggling with healthcare budget constraints and needs to use resources efficiently. In situations like this, it seems reasonable to conclude that the public interest in withholding the financial details outweighs the public interest in disclosing them.

However, there is room for a balanced approach that would make the existence of MEAs public while keeping the financial information confidential. For instance, a registry of MEAs that does not reveal the pricing details, or at least making MEA templates transparent, could enable an external evaluation of the entry arrangements and validate that a specific model is beneficial to the healthcare system.

Naturally, MEAs may, at some point, intersect with competition rules, so it is important that they do not inhibit competition from upcoming products. For example, although the three-year duration of MEAs is relatively short, their prolongation could, over time, jeopardize generic entries. Hence, when deciding on extensions of an MEA, especially if a generic entry is imminent, the paying entity should design the commitments under the MEA to make generic competition possible.

By Srdjan Jankovic, Head of Competition and TMC, Petrikic & Partneri AOD in cooperation with CMS Reich-Rohrwig Hainz

This Article was originally published in Issue 8.5 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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