Economy
Update 1 - Drug price freeze unconstitutional - Constitutional Court
(Adds details, background, comments on Egis, Richter)
Hungary’s Constitutional Court ruled on Tuesday the government acted unconstitutionally when it decided in March to reduce and freeze drug prices for 180 days as of 1 April. However, it also said the Price Act’s stipulations on drug price freeze rules was not unconstitutional as petitions put in to the Court claimed
The Court stipulated that any ruling on prices must be carried out only transitionally, at the coexistence of legal requisites and with an explicit limitation of duration.
The Court said the governmental decree on the temporary price setting of human drugs and certain nutrition products that came into effect on 1 April was unconstitutional.
On 1 April, the Hungarian government reduced by 15% and froze the prices of nearly 10,000 drugs for 180 days in a bid to rationalise customer expenditure.
The Court’s decision is to be most welcomed by drug producers, but it is yet unclear what administrative means the government may resort to in a bid to postpone the restoration of original drug prices. Interestingly enough, it is not even certain whether prices will in fact have to be restored or not.
According to the Court’s decision the cabinet must “correct its unconstitutional practice by 30 June", which, in theory, could mean that prices will have to back to levels on 31 March that is before the drug price freeze.
The main question is whether the government would be able to come up with a EU-conform solution in the following month to avoid being forced to restore drug prices.
The Court also ruled the government’s modification to the Price Act is also unconstitutional, which means that in its current state the law on the long-term regulation of drug prices is nonexistent.
Hungary’s Constitutional Court ruled on Tuesday the government acted unconstitutionally when it decided in March to reduce and freeze drug prices for 180 days as of 1 April. However, it also said the Price Act’s stipulations on drug price freeze rules was not unconstitutional as petitions put in to the Court claimed
The ruling.
The Constitutional Court said the government went beyond its power when created a decree on drug price freeze, as not all legal requirements existed for such a move. The Court stipulated that any ruling on prices must be carried out only transitionally, at the coexistence of legal requisites and with an explicit limitation of duration.
The Court said the governmental decree on the temporary price setting of human drugs and certain nutrition products that came into effect on 1 April was unconstitutional.
On 1 April, the Hungarian government reduced by 15% and froze the prices of nearly 10,000 drugs for 180 days in a bid to rationalise customer expenditure.
The Court’s decision is to be most welcomed by drug producers, but it is yet unclear what administrative means the government may resort to in a bid to postpone the restoration of original drug prices. Interestingly enough, it is not even certain whether prices will in fact have to be restored or not.
According to the Court’s decision the cabinet must “correct its unconstitutional practice by 30 June", which, in theory, could mean that prices will have to back to levels on 31 March that is before the drug price freeze.
The main question is whether the government would be able to come up with a EU-conform solution in the following month to avoid being forced to restore drug prices.
The Court also ruled the government’s modification to the Price Act is also unconstitutional, which means that in its current state the law on the long-term regulation of drug prices is nonexistent.
