With Decision No. 1785/2019, the 4th Section of the Council of State deemed unconstitutional the imposition of clawback on a pharmaceutical company for a specific category of medicinal products, the so-called orphan drugs, i.e. drugs used for rare conditions.
The Court ruled that the imposition of clawback on orphan drugs violates the constitutionally established principles of proportionality and equality due to the fact that, as arising from the provisions of the European regulations and national legislation on orphan drugs and rare diseases, these medicinal products constitute an entirely different category, on the one hand because they are used to manage and treat rare diseases and on the other because they pertain to an extremely limited number of patients across the country and per hospital that can easily be established and estimated compared to the drugs used to treat other, just as grave, diseases.
According to Article 9(1) of Regulation (EC) No 141/2000, the EU member states must offer incentives that encourage the circulation of these drugs. However, the national legislation on clawback does not provide for any form of special treatment (e.g. either in the form of a higher discount from the start or with their mandatory inclusion in the legal process of negotiations ending up in the drafting of fixed budgets for the State and National Organization for the Provision of Health Services [EOPYY]). As a result, the consequences from the imposition of the clawback measure are disproportionate to the intended legitimate, in principle, purpose of this restriction in hospital expenditure, and, therefore, constitute an excessive restriction at the expense of the companies that distribute these drugs.
This new decision paves the way for the courts to review the legality of the clawback measure. To date, all the Council of State decisions have deemed the clawback as a temporary measure in view of the severe fiscal crisis plaguing the country. However, the fact that it is being continuously extended proves that it can no longer be considered temporary. Moreover, with the country having exited the memorandums, describing the fiscal crisis as severe can no longer be justified.
In this light, it is possible for the Council of State to rule the imposition of clawback unconstitutional in any other future decisions.
With its vast experience in pharmaceutical law, commercial law and compliance, the Stefanos Economou & Associates Law Firm is able to meet all the needs of pharmaceutical companies, pharmaceutical warehouses and medical equipment companies for legal services, either as an advisor or before the courts and authorities.