Important precedent for high-cost drugs

On June 29, the Official Gazette published Regulation No. 1,115/20 issued by the Ministry of Health (“MoH”), abrogating formal MoH Regulation No. 1,452/19, which included Nusinersen in the Mandatory Medical Program (“PMO”, after its acronym in Spanish) for the treatment of Spinal Muscular Atrophy types I, II and IIIa (“SMA”). The PMO is a set of essential basic medical care assistance which healthcare insurance agents (i.e., public and private healthcare insurance providers) must guarantee to their beneficiaries. In that regard, the beneficiaries were granted with a 100% coverage for Nusinersen. Healthcare insurance agents must continue to provide the coverage of the treatments for SMA patients that had already initiated the treatment with the drug during the validity term of MoH Regulation No. 1,452/19.

Nusinersen has been granted with a marketing authorization certificate under special conditions, by means of ANMAT Regulation No. 4,529/20, in the terms of ANMAT Regulation No. 4,622/12, which sets forth a special registration procedure for medicines intended for the prevention, diagnosis or treatment of rare or serious diseases for which no medicines are available (orphan drugs). Rare diseases are those diseases whose prevalence in population is equal to or less than one in two thousand (1 in 2,000) people in relation to a national epidemiological situation. The sole holder of such marketing authorization certificate in Argentina is the local affiliate of the global pharmaceutical company Biogen.

The decision to exclude Nusinersen from the PMO was made based on the Health Technology Assessment Report No. 1 (“Report”) issued by the National Commission for the Evaluation of Health Technologies (“CONETEC”, after its acronym in Spanish). The purpose of CONETEC is to conduct evaluations and issue non-binding recommendations to the MoH on the incorporation, use, financing, and coverage policies of health technologies to include in the PMO, or to be excluded. In its evaluations and recommendations, CONETEC considers criteria of quality, safety, effectiveness, efficiency and equity, under ethical, medical, economic and social dimensions.  

In this regard, the Report concluded that although there is a clinical benefit of Nusinersen on SMA type I and II patients and that this is supported by good quality scientific evidence, the incorporation of the technology would have a negative impact on the public health system, equity and economics. The CONETEC stated that, only in the event of a significant reduction in the price of the technology that would guarantee the sustainability of the rest of the essential benefits such as health promotion, prevention, treatment and rehabilitation for all Argentine health system beneficiaries, coverage for patients with SMA type I and II who present similar characteristics to the patients included in the clinical trials could be considered.

This new regulation adds uncertainty to high cost treatments of low incidence diseases, such as SMA. Law No. 26,689 on Rare Diseases (such as SMA), establishes that healthcare insurance agents must give healthcare coverage to patients suffering these diseases. Moreover, Decree No. 794/15 states that patients with rare diseases will have PMO treatment coverage. However, it does not determine the extent of the additional treatment coverage of medicines/treatment beyond the scope of the PMO. 

On the other hand, Regulation No. 597/20 issued by the Superintendence of Health Services (“SSS”, after its acronym in Spanish) and published on June 30 in the Official Gazette incorporates the pathology SMA types I and II (excluding type IIIa), and Nusinersen into the Single Reimbursement System (“SUR”, after its acronym in Spanish). The SUR was created by SSS Regulation No. 1200/12 to financially support healthcare insurance agents in the recognition of low incidence medical treatments with a high economic impact and those with prolonged treatment. Regulation SSS No. 400/16, as amended, sets forth the pathologies, requirements, coverage and maximum values to be reimbursed to healthcare insurance agents (Nusinersen and SMA are included in this Regulation, Annexes IV and V).

With respect to Nusinersen, the healthcare insurance agents are authorized to request reimbursement from SUR regarding the treatment coverage provided for the lasts thirty-six (36) months. For the new treatments provided after these inclusions in the SUR, it is determined that to access financial support, the healthcare insurance agents will need to register the case with the Agency of Strategic Management, Sector of Coverage System of Emerging Health Technologies, before acquiring the drug. The SUR will provide coverage to healthcare insurance agents for Nusinersen in the amount of ARS 3,500,000 (i.e. approximately USD 47,300 at the current exchange rate).

As an additional action aimed at reducing the economic burdens to the health system derived from Nusinersen, Regulation No. 202/20 issued by the Secretariat of Domestic Trade (“SDT”) was published on July 1 in the Official Gazette fixing a maximum price for Nusinersen (Spinraza^®) at USD 27,000 per vial. Said value must be converted into Argentine pesos (“ARS”) at the official exchange rate of Banco de la Nación Argentina, the day before the effective payment date (Section 1). This mandatory maximum sale price is applicable throughout the country, for those purchases made by the Argentine Government and all healthcare insurance agents, whatever their jurisdiction (Section 2).

[Red flag No. 1: de facto pricing regulation and purchase discount]: the suggested price provided by Biogen for Nusinersen at the National Vademecum of Medicines (“NVM”) is ARS 9,009,809 (i.e. approximately USD 121,000 at the current exchange rate). Which means, that Regulation No. 202/20 applied a mandatory discount of approximately USD 100,000 in regards with the suggested price for Nusinersen (Spinraza^®). 

Government rationale of its decision is based in the following arguments contained in the Regulation recitals:

1. Consumers have constitutional rights to the protection of their health, safety and economic interests, having the authorities to defend them against all forms of market distortion and to control natural and legal monopolies. The duty of the Argentine Government is to guarantee the essential rights of the population and their effective enjoyment, making it a priority interest to ensure access without restrictions and in reasonable conditions to basic goods, especially those aimed at health protection.
2. Nusinersen is the only product registered and approved by ANMAT for the treatment of patients with SMA resulting in a concentrated market dominated by the firm Biogen, who obtained disproportionate profits in the sales of the product. Biogen executed an agreement with the Argentine Government in 2019 (under Macri’s Administration) for the supply and marketing of the product, which is now being considered as abusive by the new administration (Fernández’s Administration), stating that in other countries from the region the price for this product is considerably lower (e.g., Brazil). Therefore, the SDT considers that this new fixed maximum price is not abusive nor unconstitutional because it is similar to the prices in other countries of the region.

SDT requests Biogen to arbitrate the measures conducive to ensure the supply and marketing of Nusinersen (Spinraza^®). In accordance with Regulation No. 202/20, this measure will remain in force for the duration of the national health emergency, extended by Executive Decree No. 260 dated March 12, 2020 and its amendments (Section 5).

[Red flag No. 2: Application of the Supply Law to the pharmaceutical industry]: Regulation No. 202/20 states that failure to comply with these demands will be sanctioned in accordance with the provisions of Supply Act (Law No. 20,680) and its amendments. In the context of the declaration of the coronavirus (COVID-19) sanitary emergency, the Argentine Government resorted to this Law that grants vast powers to regulate the economy with the aim of guaranteeing the regular supply of essential products to the market. This Law was recently used in critical materials such as sanitizing gel and face masks, among other products, whose price/supply was affected by the sanitary emergency, forcing companies to supply/sell those at maximum prices related to their market price of a previous date. This is the first time the Supply Law has been used in a high-cost medicine whose price/supply would not be directly affected by the pandemic, to set a maximum price not related to its market price of a previous date. The powers to fix maximum prices (and to provide the measures to ensure supply) during the sanitary emergency are also granted to the MoH and the Ministry of Productive Development in Executive Decree No. 260/20 (Section 6). 

[Red flag No. 3: antitrust investigation]: Regulation No. 202/20 entrusted to the National Antitrust Commission, a decentralized body within the scope of the SDT, to carry out a market investigation of Nusinersen (Spinraza®) throughout the national territory, in order to determine the possible commission of infractions of Law on Antitrust No. 27,442. This Law condemns all acts that can be considered as an abuse of the dominant position in a market which damages the general economic interest.