Transparency of decisions regulating prices
and the reimbursement of medicinal products in EU countries
Directive 89/105/EEC on the transparency of measures regulating the prices of medicines for human use and their inclusion in the scope of national health insurance systems
It aims to ensure that any measures taken by EU countries to set the prices of and to reimburse medicinal products are transparent.
To achieve this, it sets out the procedures that EU countries must follow so that their decisions and policies do not create obstacles to the EU pharmaceutical trade.
EU countries’ national authorities, once a medicine is authorised, must:
make a decision on the price charged and the level of reimbursement within 90 days of receiving an application, providing all the necessary information has been supplied;
allow an applicant to sell the product at the price proposed, if they fail to take a decision within the 90-day deadline;
provide reasons based on objective and verifiable criteria for any refusal to authorise the price of a medicine;
follow largely the same procedures when considering applications:
for an increase in the price of a medicine,
for an exemption from a price freeze, or
for inclusion on the list of products covered by national health insurance systems;
review at least once a year any price freeze which may be imposed on all medicines or certain categories of medicines to determine whether it is still justified by economic conditions;
inform the European Commission of the terms of any direct or indirect controls they place on the profitability of pharmaceutical companies;
allow decisions to be appealed before a national court and inform an applicant about the procedural requirements of those appeals.
A consultative committee, known as the Transparency Committee, consisting of national representatives and chaired by the Commission, is responsible for considering any discussing any problem related to the implementation of the directive.
Application & Background
It has applied since 27 December 1988. EU countries had to incorporate it into national law by 31 December 1989.
After conducting a review of the legislation, the Commission proposed a new directive in March 2012. This aimed to streamline procedures and reduce the time taken by national decisions on the pricing and reimbursement of medicines. The legal proposal aimed at simplification of procedures as well as at improving the legal clarity and certainty for all interested parties The proposal was subsequently withdrawn by the Commission in March 2015.
The Court of Justice of the European Union has handed down several judgments on the interpretation and implementation of the transparency legislation.
For more information, see:
‘Transparency Directive’ on the European Commission’s website.
Council Directive 89/105/EEC of 21 December 1988 relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems (OJ L 40, 11.2.1989, pp. 8–11)
Medicines for rare diseases – orphan drugs
Regulation (EC) No 141/2000 on orphan medicinal products
It lays down criteria for designating certain medicinal products as orphan drugs* to prevent, diagnose and treat rare conditions.
It provides incentives for their research, development and marketing.
For a product to acquire orphan drug status, manufacturers must show that:
it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting fewer than 5 in 10,000 people in the EU, or
without incentives, the sale of the drug in the EU would not generate sufficient income to justify the necessary investment, and
no satisfactory alternative exists or, if there are treatments, the proposed treatment should have a significant benefit.
The Committee for Orphan Medicinal Products:
examines applications for orphan drug status;
gives its opinion within 90 days of receiving the application;
advises the European Commission on developing an EU orphan drug policy;
assists the Commission in liaising internationally on orphan drug issues;
helps the Commission to draw up detailed guidelines.
The Commission adopts the final opinion on an orphan drug application within 30 days of receiving the committee’s opinion. The European Medicines Agency may:
offer advice on the necessary tests and trials if the developer of an orphan drug so requests;
waive all or part of the market authorisation fees.
Manufacturers of an orphan drug can benefit from:
exclusive marketing rights for up to 10 years (this may be cut to 6 years if the drug is sufficiently profitable after 5 years; it may be extended to 12 years if the product’s possible effects on children have been studied),
other incentives, particularly for SMEs, to support the research and development of orphan drugs.
Before 22 January 2001, the Commission was to publish a detailed inventory of all the available incentives and update it regularly.
Before 22 January 2006, the Commission was to publish a report on the legislation’s implementation and its public health benefits.
In 2016, the Commission published an updated version of the inventory.
Application & Background
It has applied since 22 January 2000.
Some medical conditions are so rare that under normal market conditions, pharmaceutical companies would be unwilling to invest in their research. Products to treat these conditions are known as orphan drugs and require incentives if they are to be successfully developed.
For more information, see:
‘Orphan designation’ on the European Medicines Agency’s website
‘Orphan medicinal products’ on the European Commission’s website
Orphan drugs: drugs developed to treat rare diseases. They are so called because the pharmaceutical industry has little financial interest in developing and marketing products intended for only a small number of patients suffering from very rare conditions.
Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 on orphan medicinal products (OJ L 18, 22.1.2000, pp. 1–5)
Subsequent amendments to Regulation (EC) No 141/2000 have been incorporated into the basic text. This consolidated version is of documentary value only.
Commission Regulation (EC) No 847/2000 of 27 April 2000 laying down the provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product and definitions of the concepts ‘similar medicinal product’ and ‘clinical superiority’ (OJ L 103, 28.4.2000, pp. 5–8)
Communication from the Commission on Regulation (EC) No 141/2000 of the European Parliament and of the Council on orphan medicinal products (OJ C 178, 29.7.2003, pp. 2–8)
Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency (OJ L 136, 30.4.2004, pp. 1–33). See consolidated version.
Commission Regulation (EC) No 2049/2005 of 15 December 2005 laying down, pursuant to Regulation (EC) No 726/2004 of the European Parliament and of the Council, rules regarding the payment of fees to, and the receipt of administrative assistance from, the European Medicines Agency by micro, small and medium-sized enterprises (OJ L 329, 16.12.2005, pp. 4–7)
Commission Regulation (EC) No 507/2006 of 29 March 2006 on the conditional marketing authorisation for medicinal products for human use falling within the scope of Regulation (EC) No 726/2004 of the European Parliament and of the Council (OJ L 92, 30.3.2006, pp. 6-9)
Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006 on medicinal products for paediatric use and amending Regulation (EEC) No 1768/92, Directive 2001/20/EC, Directive 2001/83/EC and Regulation (EC) No 726/2004 (OJ L 378, 27.12.2006, pp. 1–19)
Guideline on aspects of the application of Article 8(2) of Regulation (EC) No 141/2000 of the European Parliament and of the Council: Review of the period of market exclusivity of orphan medicinal products (OJ C 242, 23.9.2008, pp. 8–11)
Guideline on aspects of the application of Article 8(1) and (3) of Regulation (EC) No 141/2000: Assessing similarity of medicinal products versus authorised orphan medicinal products benefiting from market exclusivity and applying derogations from that market exclusivity (OJ C 242, 23.9.2008, pp. 12–16)