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New Guidelines on collective procurement of prescription drugs

  • United Kingdom
  • Netherlands
  • Health and life sciences

09-12-2016

Précis

On 23 June 2016 the Netherlands Authority for Consumers and Markets (“the ACM”) published the definitive version of the “Guidelines on collective procurement of prescription drugs” (“the Guidelines”). The Guidelines inform hospitals and health insurers about the possibility of procuring prescription drugs collectively in light of competition law. The ACM expects that the Guidelines will ensure that lower drug prices and better conditions can be negotiated.

What?

In April 2016, the ACM published a draft version of the Guidelines. Stakeholders were given the opportunity to comment on the draft version. In addition, the ACM organised several roundtable discussions with health insurers and hospitals to determine whether the Guidelines were sufficiently clear. In the final version of the Guidelines several parts of the draft version have been clarified.

The Guidelines explain what opportunities the competition rules offer, and what limits they set if hospitals or health insurers purchase drugs collectively. The ACM lists three rules in the Guidelines. The ACM anticipates that if purchasing agents follow these rules, they will not fall a foul of competition law and collective procurement will be considered to be a permitted arrangement. The rules are:

1. The total costs of the drugs purchased collectively cannot comprise more than a limited proportion of the hospital’s costs;

2. Other buyers must be able to join any group purchasing organisation (or joint purchasing organisation);

3. It must be easy to leave a group purchasing organisation (or joint purchasing organisation).

In addition, it must be noted that the exchange of information between the participants of the collaboration cannot go beyond what is necessary in order to collectively procure prescription drugs. This must prevent the exchange of competitive-sensitive information between the participants of the collaboration.

So what?

The ACM expects that the new Guidelines will provide hospitals and health insurers the ability to negotiate lower drug prices and better conditions. Although the Guidelines do not provide a new understanding of the relevant legislation, the Guidelines provide for a very efficient mechanism to opening up new possibilities for the collective procurement of prescription drugs.

It should be noted that also outside the rules laid down in the Guidelines, cooperation between purchasing agents continues to be possible. In order to determine whether a specific collaboration complies with general competition law rules, a more extensive analysis of the collaboration in question may be necessary.

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