1. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 1 – Free movement of goods Bilateral screening: Chapter 1 PRESENTATION OF MONTENEGRO Brussels, 06 March 2013

2. M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Working Group for Chapter 1 – Free movement of goods – Bilateral screening: Chapter 1 Presentation of Montenegro Brussels, 06 March 2013 Chapter 1: Free movement of goods

3. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Medicinal products - pricing - Željka Bešović Agency for medicines and medical devices Marketing Authorisation department zeljka.besovic@calims.me Chapter 1: Free movement of goods

4. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Relevant acquis Celex: 31989L0105 Chapter 1: Free movement of goods

5. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Outline Pharmaceutical sector – key data Legal framework Institutional framework Harmonisation Current situation Planned activities Chapter 1: Free movement of goods

6. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Montenegro pharmaceutical sector – key data 2 domestic manufacturers – Generic medicines/human use – No manufacturing of innovative or biologic medicines 27 wholesalers for human medicines/ 7 wholesalers for veterinary medicines Total market of human medicines (both public and private) in 2011 around 56, 5 milion euros* – 29,5 milion euros from Health Insurance Fund – 3% (financial) of total market – domestic manufacturers – 97% (financial) import (60% from EEA, 30% countries of the region) – ~65% generics / ~ 35% innovative (issued MA) *data from the Agency report on consumption, available on www.calims.me /www.calims.me / Chapter 1: Free movement of goods

7. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Legal framework 2004 – 2010 Law on medicines (“Off. Gazette of Montenegro” No. 80/04 and No 18/2008) – The Government shall establish criteria for determining maximum prices of medicines that have a MA in Montenegro except for medicines that are dispensed without prescription (OTC medicines) – The Ministry in charge of trade shall perform inspection supervision over prices of medicine on the market. Chapter 1: Free movement of goods

8. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Legal framework 2004 – 2010 Decree on criteria for setting the maximum prices of medicines („Off. Gazette“ No 50/2007) – International price referencing (Slovenia, Croatia and Serbia) – Maximum (wholesale) price calculated on basis of average prices in ref countries/wholesale marge of 6% and retail marge of 18% – Ministry of economy shall establish maximum prices – 2007-2010/Ministry of economy did not start the activity due to lack of resources Decree on criteria for setting the maximum prices of medicines amended in 2010 („Off. Gazette“ No 62/2010) – Competence transferred to the Agency for medicines and medical devices – Other provisions not changed Chapter 1: Free movement of goods

9. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Legal framework 2011- Law on medicines (“Off. Gazette of Montenegro” No. 56/11 from 03. Decembar 2011.) – Agency new competence for establishing maximum prices introduced in the Law – Government shall establish criteria for determining maximum prices of medicines used in human medicine and prescribed and issued as a burden of compulsory health insurance Agency is not performing the competence yet – Price list including this activity is awaited to be approved by the Government Chapter 1: Free movement of goods

10. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Institutional framework National Assembly Adopts the Law on medicines Goverment of Montenegro Criteria for the maximum prices of medicines Ministry of health Proposes Laws and Decree, adopts Rulebooks and Guidelines Licences for health institutions (pharmacies) Agency for medicines and medical devices Issuing MA for medicines (H+V), CT, PhV, licences for wholesale and manufacturing, register of medical devices, narcotic substances, reports on consumption of medicines, establishing maximum prices of medicines Administration for inspection affairs Supervision over Law implementation Chapter 1: Free movement of goods

11. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Institutional framework Public Fund for health insurance – Positive list of medicines (100% reimbursed) – List structured by generic names (INN) - no brand names Montefarm – wholesale and 44 pharmacies/state owned – Performing annaul tender for procurement of medicines from positive list of the Fund – Medicines with MA can apply for the tender – Tender provides medicines for public health institutions – primary health centers (13), hospitals (10) and public pharmacies (44) – Private pharmacies and health institutions – not in the Fund system – patients paying out of pocket for medicines Chapter 1: Free movement of goods

12. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Harmonization Scope harmonised - establishing of maximum prices only for medicines that are reimbursed by the Public Fund Timelines not harmonised - Law and Decree do not determine timelines for decision Transparency of data not harmonised - Law and Decree do require data on maximum prices to be published Remedy and statement of reasons for refusal harmonised – required by the Law on general administrative procedure („Off. Gazette of Montenegro“ No. 60/03 and " Off. Gazette of Montenegro " No. 32/11) Chapter 1: Free movement of goods

13. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Current situation Agency is not performing the competence yet During 2012 worked on preparation for implementation of the Decree – training of the staff on implementation – work on information system for data processing – model tested on large sample of authorised medicines categories in order to predict impact on the prices (currently controlled trough tender procedure) Price list including this activity is awaited to be approved by the Government in order to begin with the competence Chapter 1: Free movement of goods

14. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Planned activities Need for intensive interaction with the clients - new system – meetings, guideline on website, workshop Closer cooperation with the inspection authority New Decree/Further harmonisation – The transparency of data – established maximum prices will be made public once during the year – In cases when it is not possible to establish comparable price in any of reference countries, an EU member state in which the medicine has a MA, can be used as alternative Chapter 1: Free movement of goods

15. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union Medicinal products - inclusion in the scope of National Health Insurance - Milica Škiljević Health Insurance Fund of Montenegro milica.skiljevic@rfzcg.co.me Chapter 1: Free movement of goods

16. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union LEGAL FRAMEWORK Health insurance of citizens provide the implementation of the right to health care and other rights under the compulsory health insurance, in accordance with the Law on Health Insurance. Chapter 1: Free movement of goods

17. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union LEGAL FRAMEWORK The right to the health care comprises: – Medical measures and procedures for health improvement, prevention, control and early detection of diseases and other health disorders, – Medical examinations and other types of medical care, – Treatment of the diseased and injured and other types of the medical care, – Treatment outside of Montenegro, – Prevention and treatment of oral and teeth diseases, – Medical rehabilitation, – Medicines and medical devices, – Technical medical aids (prostheses, orthopedic aids and other devices, ocular and typhlo-technical aids, hearing aids, dental aids, sanitary apparatuses). Chapter 1: Free movement of goods

18. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union LEGAL FRAMEWORK The Regulation on the scope and standards of health care from a compulsory health insurance ("Off. Gazette of RM" No. 79/05 of 23.12.2005) anticipates that the scope of services provided within the established right to compulsory health insurance, includes the right to: – prescribed medicines, according to the List of Medicines to be prescribed and issued at the expence of the compulsory health insurance, – medicines, medical devices and materials used in the diagnosis and treatment of chosen medical practitioners, chosen dentists, in the case of home treatment, and in other units of the primary, secondary and tertiary health care, which do not require prescriptions, – medicines, medical devices and materials that are not presribed, and provided by the health institution i.e. health service providers. Chapter 1: Free movement of goods

19. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The insured person exercise the right to the medicines according to the List of medicines that are prescribed and issued at the expenses of the Fund intended to compulsory health insurance (“Off. Gazette of Montenegro” No. 04/12 of 17.01.2012), which has been determined by the Health Insurance Fund and approved by the Ministry of Health. The method and procedure for exercising the right to medicines is defined by the Rulebook on Exercising Specified Entitlements under the Mandatory Health Insurance ("Off. Gazette of RM" No. 69/2006). Chapter 1: Free movement of goods

20. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The current List of medicines that are prescribed and issued at the expense of the Fund, intended to compulsory health insurance, has been proposed by the Commision, which has been appointed by the Director of the Health Insurance Fund. The Commission has proposed the List of medicines based on continuous monitoring of the application Lists of medicines, requirements health care facilities, as well as the requirements of pharmaceutical companies, their representatives and agents, who submitted the application and appropriate medical documents. Chapter 1: Free movement of goods

21. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The reasons for revising the current list of medications were as follows: – Changes in modern treatment protocols, – Changes indications of medicines made by WHO, – Justified of claims insured persons for new medicines, – Requirements Clinical Center of Montenegro to amend the list of medicines in terms of allowing the inclusion of more advanced therapies in the treatment of certain diseases, – Provision of therapy that fits the clinical state of patients after application i.e. inclusion in medicines therapy in other centers outside of Montenegro, – An established need for certain doses or medications, which are not produced or are overcome in therapy, to remove from the List of medicines, – The necessity to limit the consumption of certain medicines by introducing an indication i.e. limitations on the introduction of medicines in therapy, in accordance with the standards of countries in the region, etc. Chapter 1: Free movement of goods

22. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The criteria under which the Commission acts upon the removal of the medicine from the List of medicines were: – turnover of medicines (negligible or zero), – the status of the medicine in the region (the existence of the medicine on the List of medicines countries in the region), – awareness that the medicine is no longer manufactured and is not correspond to the conditions of modern therapy, and therefore it is overcome in therapy and at the end that there were no applications on several tenders of procurement of medicines. Chapter 1: Free movement of goods

23. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The criteria under which the Commission acts upon the placing of the medicine on the List of medicines were: – continuous approval of the medicine through the Commission for medicines of the Fund, – changes in modern treatment protocols, – new indication for the medicine as defined by the World Health Organization, – demand of Clinical Center of Montenegro in terms of allowing the inclusion of modern therapy in the treatment of designated diseases, – status of medicine in the countries in the region (the existence of the medicine on the list of countries in the region), – requirements of pharmaceutical companies, their representatives and agents, who submitted the application and appropriate medical documents. Chapter 1: Free movement of goods

24. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The List of medicines consist of medicines that are issued at the expense of the Health Insurance (List A) and medicines that are issued at the expense of the Fund for Health Insurance with the approval of the Commission for medicines of the Fund (List B). The List of medicines that are prescribed and issued at the expense of the Fund contains 531 medicines in 699 pharmaceutical forms and 1162 doses (concentrations). Chapter 1: Free movement of goods

25. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES Procurement and distribution of medicines and medical devices The Health Pharmacies institution of Montenegro "Montefarm" procures and distributes medicines and medical devices to all public health institutions, as well as citizens, through its pharmacies (44 pharmacies). Medicines and medical devices are procured by public procurement (tender). Chapter 1: Free movement of goods

26. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The right to the reimbursement of costs If the insured person is not able to provide medical devices and medicines from the List of medicines in the health institution with which the Fund has concluded the contract, the insured person shall exercise the right to reimbursement of costs according to the Rulebook on detailed conditions and manner of exercising certain rights under the compulsory health insurance (“Off. Gazette of Montenegro ", no. 45/08 of 31.07.2008). Chapter 1: Free movement of goods

27. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union THE RIGHT TO THE MEDICINES AND MEDICAL DEVICES The right to the reimbursement of costs – The reimbursement of cost regarding procurement of medical devices and medicines from the List of medicines, the insured person shall exercise in the amount of the cost of a medical device or a medicine, but up to ( not exceeding ) the price at which it is provided by the healthcare institutions with which the Fund has concluded the contract. – If the medical devices and medicines from the List of medicines are not provided by the health institutions with which the Fund has concluded the contract, reimbursement of cost will be equal to the cost of a medical device or a medicine. Chapter 1: Free movement of goods

28. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union CURRENT SITUATION Amending the Law on Health Insurance ("Off. Gazette of Montenegro", no. 14/12 of 03.07.2012), which entered into force on 15.03. 2012, it is stipulated that the Government of Montenegro, at the proposal of the Ministry of Health determines a List of basic medicines containing medicines that are particular importance for the health of the insured persons and which are prescribed and issued at the expense of compulsory health insurance, supplementary list of medicines that includes medicines that are not on the list of basic medicines and a list of medical devices implanted in the human body and their standards. The criteria for determining the List of medicines and medical devices implanted in the human body shall be prescribed by the Government, at the proposal of the Ministry of Health. Chapter 1: Free movement of goods

29. Chapter 1: FREE MOVEMENT OF GOODS M O N T E N E G R O Negotiating Team for the Accession of Montenegro to the European Union PLANNED ACTIVITIES In order to implement the legislation, the Ministry of Health has initiated activities: – preparation of the Rulebook proposal on criteria for determining the list of medicines and medical devices which are implanted in the human body, – preparation of the List proposal on medicines and medical devices which are implemented in the human body. It is anticipated that the Directive 89/105/EEC (Articles 6 and 7) shall be transposed through bylaws. It is expected that the bylaws shall be defined by the end of 2013. Chapter 1: Free movement of goods

30. Thank you for your attention! QUESTIONS