In an earlier news flash we discussed new legislation that provided a legal basis for specific rules concerning the public procurement of biosimilars. On the basis of this new legislation, it became possible to impose specific rules concerning the public procurement of medicines and medical devices by Royal Decree.
In this context, a Royal Decree has been adopted on 13 September 2023, imposing specific rules concerning public procurement of biosimilars.
New obligations in public procurement of biosimilars
The Royal Decree contains a number of substantial obligations for hospitals in their procurement policies relating to biosimilars. We hereby provide an overview:
Obligation to award a public procurement contract within a short period of time
The Royal Decree imposes an obligation on hospitals to award a public contract for the purchase of a biosimilar no later than 9 months after a biosimilar is registered on the list of reimbursable pharmaceutical specialities and is available.
The wording in the Royal Decree suggests that the new contract must indeed be “awarded” (and thus not merely “published” or “ongoing”) within this 9-month period.
The Royal Decree allows a hospital to deviate from this deadline in duly justified cases and report this to the NIHDI. It also provides for an obligation for the NIHDI to report to the Belgian Competition Authority if the reasons for the deviation are deemed unacceptable. In that case, the Competition Authority can open an investigation.
Termination clause in the contract
Furthermore, all contracts for biosimilars concluded from 2 October 2023 onwards must include a clause providing for the termination of the contract if a new contract is to be awarded in accordance with the Royal Decree.
The intention here is for the contracts to terminate at the time the new contract is awarded to ensure continuity of access to medicines.
The Royal Decree does not explicitly regulate how a hospital should deal with the obligation to award a new contract within 9 months of the registration of a biosimilar, if an existing contract is ongoing, which does not yet contain a termination clause to this effect (e.g. because the existing contract predates the entry into force of this Royal Decree).
The Report to the King accompanying the Royal Decree clarifies that in that case, the hospital can report to the NIHDI that it will not be contractually possible to award a new contract within the 9-month period. In this way, the hospital could then rightfully deviate from the obligation discussed under point 1 above.
Maximum duration of the contract
The duration of a public contract for the purchase of biosimilars cannot exceed 24 months, according to the Royal Decree. However, the tender documents may provide for two extensions of 12 months each, in order to reach (under certain conditions) a maximum duration of 48 months.
Forbidden selection and awarding criteria & technical requirements
A number of criteria and/or requirements are now prohibited in the award of public contracts for biosimilars. More specifically, these are:
- criteria requiring that the medicine has already been on the market for a certain period of time;
- criteria related to additional services not related to the subject matter of the public contract;
- criteria related to efficacy, safety or quality profile of the biosimilar;
- criteria requiring the provision of clinical transition data or financial support for clinical transition studies;
- granting price discounts if several lots are awarded to the same bidder, where this mechanism also applies to at least one lot for which competition is lacking due to the protection of certain intellectual property rights;
- inclusion of different routes of administration in the same lot;
- contractual link with other medicines.
It is certain that the Royal Decree of 13 September 2023 will have a strong impact on the public procurement of biosimilars in hospitals.
This impact is to be expected in the preparation of procurement matters, but also in the drafting of tender documents, the development of selection and award criteria, the determination of technical requirements and the drafting of contractual provisions, such as termination clauses. The impact of the Royal Decree will also be clearly felt by suppliers of medicines.