On 22 March 2002 the Norwegian Government presented a white paper ("Stortingsmelding") evaluating the Act relating to medical use of biotechnology. The white paper emphasises the need to find the right balance between the exploitation of the opportunities offered by the new technology in research and medical treatment, and respect for human integrity and dignity and other fundamental social values.

Among the issues regulated by the Biotechnology Act are artificial insemination, in vitro fertilisation (IVF), embryology/embryo diagnostics, genetic testing after birth, outreach genetic activities and genetic therapy.

With respect to artificial insemination and embryo diagnostics, the following amendments are proposed:

• Abolition of the restriction on storing non-fertilised eggs;
• Semen donors will no longer be anonymous;
• The attending physician has a duty established by law to inform about alternatives to artificial insemination and IVF
• Embryo diagnostics will only be allowed if there is a definite risk of a serious inherited illness or development abnormality;
• The conditions for being offered embryo diagnostics are established by law
• Ultrasonic examination with a view to detecting or excluding inherited illness or development abnormality in the embryo will be covered by the provisions regarding approval and reporting
• The right of women or couples to information and guidance regarding embryo diagnostics is strengthened

With respect to genetic examination after birth, the white paper states that measures should be implemented to increase awareness and knowledge of genetics among health personnel and the public in general. The ban on use of genetic information in connection with insurance issues is maintained.

Both the existing requirement that genetic therapy should be limited to serious illness and the ban against genetic therapy on fertilised eggs are maintained. A ban against genetic therapy on embryos is proposed. cb

The Federal Office of Social Assurance, which is in charge of determining the prices of reimbursable medicinal products, is modifying its system for price determination. The aim is to accelerate the incorporation of new products in the list of reimbursable medicinal products (the "speciality list" or SL) and to adapt price levels in Switzerland to the lower levels in other European countries.

Up to now, the Swiss authorities have compared the prices of all reimbursable medicinal products with the corresponding prices of the same products in Germany, Denmark and the Netherlands. Prices in Switzerland had to be on the same level. New products were granted an innovation bonus for the first 15 years. The whole procedure for the incorporation in the SL took up to one year, because the pricing commission only met twice a year. Another disadvantage was that a company had to wait for definitive marketing approval for the product before it was allowed to submit its file for the price determination. This system, especially its long duration and the comparison with only three countries, was criticised by the pharmaceutical companies. There have been several meetings between representatives of the health authorities and of the pharmaceutical industry to seek a more appropriate and faster procedure.

As a result, the procedure will be modified from July 1, 2002 in two ways. First, more countries will be included in the comparison of price levels. The United Kingdom will be added to the three countries used already, which will remain as "front-line" comparison countries. For second-line comparisons Switzerland’s neighbours France, Austria and Italy can also be used. These second-line countries will be taken into account either as indicative factors or when the product is not marketed in one of the four front-line countries. Comparison with price levels in Italy might arouse some scepticism, but this issue is not clear yet.

Under legislation which applied until April 1996, the prices of medicinal products in Greece could not exceed the average of the three lowest prices applied in European countries. This regulation was replaced in 1996 by a new regulation according to which prices for medicinal products may not exceed the lowest prices in Europe. This new regulation was implemented in October 1997 by the Ministry of Development, which is the competent authority for determining the prices of medicinal products.

But to which Europe does the legislator refer? The "Europe" mentioned in the legislation is not defined, but so far the Ministry of Development’s Medical Product Price Committee has implemented this requirement by taking into consideration the product’s price in European Union countries, Switzerland and Norway.

The pharmaceutical industry in general, particularly multinational companies, reacted strongly against the requirement to apply the lowest price in Europe, since it led to:

• a massive increase in parallel trade in medical products from Greece to countries where prices are particularly high.
• an adverse effect on determination of the price of the same product in European countries which apply a system based on the average of other European prices

A further consequence of the application by the Greek authorities of the lowest price in Europe was that many companies have withdrawn their products from the Greek market on a request from their parent company, which feared the Greek price would have an unfavourable effect on the price for that product in other European countries. These factors led the Association of Pharmaceutical Companies of Greece (SFEE) to deposit an application for the annulment of the regulation with the Council of State in October 1997. At the same time SFEE appealed to the European Commission through EFPIA, requesting the annulment of the regulation and the implementation of the provisions of Directive 89/105 regarding the length of the procedure for determining the price of medical products and their inclusion in the list of products qualifying for reimbursement. It took the Council of State four years to decide, in November 2001, that the requirement that Greek prices for medicinal products must not exceed the lowest price for those products elsewhere in Europe should be annulled. The industry viewed this as a major victory for the future of the pharmaceutical sector in Greece. The Council based its decision on the law which gave the Minister authority to issue the regulation. This law required him to determine prices of imported products by examining their price elsewhere in Europe and in the country of origin. This led the Council to conclude that the law required the Minister to provide that prices of medical products in Greece should be determined on the basis of at least two reference prices and not just one, i.e. the lowest price in Europe.

However, the Ministry of Development argued that the decision was based merely on procedural formalities, and therefore chose to ignore it. However, the Minister also presented to the Greek Parliament a draft law authorising him to issue a regulation providing that prices of imported medical products must not exceed the lowest European price of the product, with no reference to the price in the country of origin. The Parliament approved this law last March and gave it retroactive effect from November 1997

The pharmaceutical industry complained to the European Commission about the Greek reference price. The Commission was not very willing to intervene regarding this problematic point of the Greek legislation, although it did take action against the Greek Government for failure to respect of Articles 2 (delays in pricing new products), 3 (delays in increasing prices) and 6 (reimbursement procedure) of the Transparency Directive 89/105. With regard to the reference price, the Commission asked EFPIA and SFEE to provide data from their members showing that use of the lowest price charged elsewhere in Europe led companies to sell their products at a loss. Unfortunately, the industry did not agree to provide such data, and the Commission therefore decided not to request the annulment of this requirement in its action against the Greek Government. Moreover, although the College of Commission approved the proceedings against Greece in September 2000, the action has not yet been filed with the European Court of Justice.

In my opinion this delay is due to the fact that the Greek Government has resolved some of the other problems with its legislation. Greece has still not implemented the provisions of Directive 89/105 regarding medical product price increases, and continues to violate the deadlines laid down in the Directive regarding the inclusion of medical products in the reimbursement list. However, the Greek Government has apparently indicated that it intends to remedy this situation.

Meanwhile, as already noted, the Greek Government decided to ignore the Council of State decision annulling the regulation containing the "lowest price in Europe" requirement. Its initial reaction was to issue a price bulletin in November 2001 including prices determined on the basis of the lowest price in Europe. On December 31, 2001 the Greek Government issued a new bulletin which converted all prices from drachmas to the Euro. Once again, the prices were based on the lowest price in Europe. SFEE has brought actions for annulment of both these bulletins before the Council of State. The Council examined the case at the beginning of April 2002 and the report of the Judge Rapporteur upheld the industry’s arguments. The industry is therefore expected to win the action.

The Council of State has also been asked for its opinion on two aspects of the new legislation allowing determination of Greek prices on the basis of the lowest price in Europe only.

• the legality of voting a new law upholding an earlier regulation which has been annulled by the Council of State; and
• whether the retroactive effect of the new law is unconstitutional.

It seems likely that the Council’s decision will lead to the annulment of the new law.

The publication of the Arzneimittelausgaben-Begrenzungsgesetz (AABG) in the German Federal Law Gazette on February 23, 2002 marked the entry into force of a new law which aims to limit drug-related expenditure in the compulsory health insurance system. The new law requires pharmacies to substitute a low-priced drug that is identical in active ingredients and packaging size, authorised for the same set of indications and has the same or an interchangeable way of application, except when the physician has already prescribed a drug from the bottom third of the price range or explicitly excluded the substitution of an "identical" low-priced drug.

The law also defines in detail what is to be considered as low-priced. A product is considered low-priced if, having regard to identical strength size and interchangeable means of application, its price does not exceed the lower third of the gap between the average of the three lowest prices and the three highest prices of pharmaceuticals with identical active ingredients. If there are less than five "identical" drugs available in the lower third of the price range, each of the five cheapest pharmaceuticals is considered low-priced. In Germany this requirement is referred to as the "aut idem rule", from the Latin expression for "or the same".

Does the aut idem rule fall within the scope of the EU Transparency Directive 89/105, which lays down principles for pharmaceutical pricing measures? Article 1 of the Directive contains rules for measures on the control of drug prices and limitation of pharmaceuticals in national health insurance systems. Article 4 of the Directive, which deals with the consequences of an imposed price stop, is of particular significance in relation to the aut idem rule. After a price freeze has been ordered for all pharmaceuticals or specific groups of pharmaceuticals, a Member State is required to review whether the continuation of the price stop is justified by the economic situation. Within 90 days after the initiation of the review, the competent authorities must decide whether price increases will be allowed or refused.

The German aut idem rule does not represent a direct price freeze in the classic sense of the term, but it does mean that drugs not considered as low-priced and not explicitly excluded by the prescribing physician from replacement by an "identical" low-priced product may not be issued by pharmacies to patients under the compulsory health insurance system. As 90% of the population in Germany is covered by the compulsory health insurance system, the rule will have the practical effect of dramatically reducing sales of drugs not deemed low-priced. As a result, manufacturers will have to modify the prices of their products to make them low-priced in terms of the legal definition.

Thus the aut idem rule actually serves as an instrument for obstructing freedom to fix prices of pharmaceuticals, by forcing manufacturers to reduce prices to fall within the lower third of the price range. Indeed, this is exactly what the legislator had in mind when introducing the rule, as the main aim of the new legislation is to relieve the compulsory health insurance system and stabilise health insurance contributions. As a result, the rule amounts to a price freeze and is therefore caught by the Transparency Directive.

The applicability of the Transparency Directive has two main consequences: Firstly, under Article 4.1, Member States must review at least once a year whether the price freeze is still justified. Within 90 days after the initiation of the review, the authorities must decide whether increases or decreases in price are allowed. This provision might be helpful to manufacturers, as it ensures the aut idem rule cannot remain in force indefinitely and is subject to an annual review. There must thus be a regular examination of whether the price limits are still justified, especially in light of the economic situation and that of the national health insurance system.

Secondly, Article 4.2 contains an important clause for manufacturers, who can be granted an exemption from the price stop if this is justified by special reasons. If an exemption is granted, the authorities must announce the approved price increase without delay. This clause makes it possible to avoid price limits in the case of hardship, which would be especially likely for a manufacturer who did most of his business with drugs that had to be sold far below their former prices because of the aut idem rule.

Article 12 of the Transparency Directive states that the Directive is addressed to the Member States, which are required to implement it by introducing new or modifying existing regulations. However, according to the consistent case law of the European Court of Justice, a Directive may also be directly applicable in a Member State without requiring a prior act of transposition when the deadline for transposition has expired and the directive has not been transposed, or has been transposed inadequately. In this case the Directive’s provisions are imperative as to their substance and confer rights on individuals. The deadline for implementing the Transparency Directive expired on December 31 1989, so Germany was obliged to take into account and transpose its provisions with regard to the aut idem rule. The provisions of the Directive, especially the rules in Article. 4, are also imperative. Their tenor and the persons concerned are clear and unambiguous.

On March 12, 2002, Farmaindustria, the National Association of the Pharmaceutical Industry in Spain approved a new Code of Practice for the Promotion of Medicines. This Code enters into force on September 1, 2002 and supersedes the previous Code in effect. The previous Code was, in fact, the European Code of Practice for the Promotion of Medicines of the EFPIA that had been adopted in 1991 as the national Code by Farmaindustria.

The new Code includes major innovations regarding laws regulating the promotion of medicines both at national and regional levels and was partially inspired by the recent and complete Code of Good Practices of the United Kingdom. It provides important novelties making it more effective in regulating new aspects which were not provided for in the previous code. For instance, the new Code provides for promotional activities within the Internet.

On the other hand, regarding measures to guarantee the fulfilment of the provisions of the Code, it should be highlighted that financial sanctions up to 360.000 Euro may be imposed for very serious infractions. In addition, dispute resolution of aspects subject to the Code regarding promotion of medicines, are submitted to an external body, independent of Farmaindustria: the Jury of the Association for Self-Regulation of Commercial Communications which is governed by its own rules of procedure.

A – Introduction

Homeopathy dates back to the 5th century a.c. when Hypocrites took the very first steps in this area by developing the rule similia similibus curantur. However, his teachings quickly fell out of use once the majority of thinkers preferred to follow the rule contraria contraris oponenda that nowadays is the basis of classic western medicine. It was only by the hand of the German doctor Samuel Hahnemann that Homeopathy was theorised for the first time as a pharmaceutical method, in the late XVIIIth century.

Those against Homeopathy as a health treatment method claim that it is only placebo. Those less "extremist" recognise its usefulness as a complementary therapy but claim that it still represents a certain risk to public health. One of homeopathy’s biggest problems is that even though several clinical tests have been performed having its results been published in the most prestigious scientific journals, their conclusions are not yet satisfactory. Independent investigations concluded that Homeopathy produces positive results but that these tests were insufficient to reach solid conclusions.

B - Consumers and Market Shares for homeopathic products

Most studies on Homeopathy show that this specific alternative medicine is commonly accepted by a certain kind of patients usually called "YARVIS" (Young; Attractive; Rich; Verbal; Intelligent; Sophisticated). People from the upper and middle classes, usually self-employed compose the profile of this target-group. The use of homeopathic products is also proven to be mainly urban and mostly feminine.

The main reasons that have been appointed for the use of homeopathic products are as follows:

• Functional diseases: this kind of patient shows chronicle disturbs that cannot be related to a specific physical cause. E.g. headaches; allergies; fatigue; digestive problems, etc.
• Complementary treatment: in serious pathologies Homeopathy is used as a complement to classic treatment methods, usually to augment the organisms tolerance to such methods.
• Prevention Treatment: this kind of user is not yet ill and uses homeopathic products for prevention purposes only. In these cases Homeopathy is used as a complement to hygiene in order to reach or maintain a better physical condition.
• Treatments to unpoisen the organism: people willing to set themselves free from bad life habits (tobacco; alcohol; drugs) use alternative medicines as a way to "clean" their organism or yet to prevent side effects derived from the use of allopathic medicines.
• "Last hope treatment": patients suffering from decease’s considered incurable by today’s medicine turn for this kind of treatments as their last hope in finding a cure or at least to obtain some degree of relief to their pain and suffering.

All these factors led to a substantial increase of European market of this kind of products over the last ten years. In 1999 the sales of homeopathic products in the EU involved EURO 763.160.782,52. However, the homeopathic products market volume changes considerably from country to country, as does its growing rate. The German and French markets involve about 70% of the entire EU market of these products. This is mainly due to the fact that in these two countries Homeopathy is considered a safe and effective form of treatment by a large number of doctors and because in these countries consumers have access to such products through state contributions by the National Healthcare System (NHS).

Portugal has a pharmaceutical market with an approximate value of EURO 199.5 billion per annum, revealing an average growth of 9.5% over the last five years. Dr. Germano de Sousa, chairman of the Portuguese Medical Bar, claims that the Portuguese NHS should not have to bear with the costs derived from state contributions regarding homeopathic products as he considers them as "pseudo-drugs" or "pseudo-therapies" with mere placebo effects.

Still, the biggest market growth of these products is expected to occur in countries that currently have a small marketing rate, such as Portugal that currently has only a 0,5% market share of homeopathic products. In 2001, INFARMED (National Pharmacy and Medicinal Products Institute) expected to certify about 300 homeopathic medicinal products for the 3000 products that already awaited the market introduction authorisation. It is expected the market volume will reach around 30% within the next few years.

C - The special legal regime of homeopathic products

Since its entry into force, Directive 92/73/EEC of September 22nd on homeopathic medicinal products for human use has achieved only a limited level of harmonisation.

As far as Portugal is concerned, such Directive 92/73/EEC was implemented through Decree-Law 94/95, of May 9th.

This Decree-Law 94/95 classifies Homeopathic Products in two categories: Homeopathic Medicinal Products and Homeopathic Pharmaceutical Products. Such distinction was not made by Directive 92/CEE that only referred to "homeopathic medicinal products".

Homeopathic Medicinal Products (or Homeopathic Drugs)

This means any homeopathic product that possesses healing or preventive qualities regarding man’s deceases and its symptoms, in order to establish a medical diagnosis or to restore, correct or modify his organic functions.

According to Article 3º, no.2, of Decree-Law 94/95, the placing on the market of these products follows the general regime set out in Decree-Law 72/91, of February 08th, and in Decrees-Law 100/94 and 101/94, both of April 19th, applicable to medicinal products for human use, with certain adjustments regarding the particularities of the toxic-pharmacological and clinical testing of those products.

Homeopathic Pharmaceutical Products

This means any homeopathic product that gathers all of the following features: a) it is administrated via oral or via topic; b) it presents a degree of dilution that ensures that the product is harmless; c) complete absence of special therapeutic indications on the label or in any information concerning that product.

These products are subject to a special simplified registration procedure in which requests for registration must be submitted to INFARMED and several documents supplied in order to prove the pharmaceutical quality and homogeneity of the manufacturing batches.

1. scientific name of the raw materials, with a list of the various administration routes, pharmaceutical forms, dosages (degree of dilution) and presentation forms for which registration is sought;
2. description of how each raw material is obtained and checked and that information proves its homeopathic nature, based on appropriate bibliography;
3. details of the manufacturing process and control method of all pharmaceutical forms along with a description of the dilution and usage methods;
4. manufacturing authorisation;
5. copies of registers or authorisations already obtained for the same products in other members states of the EU;
6. one or more samples or simple replicas for the sale of the product that is to be registered;
7. information regarding the stability of the product.

Finally, Ruling 693/97, of August 14th regulates the chargeable fees for registration purposes. Although these fees are in still in PTE, the current amounts are obtained by simple conversion into EURO. Fees are as follows:

i) for each application for the registration of a homeopathic product including one pharmaceutical form - EURO 249,4;

ii) for each additional pharmaceutical form of the homeopathic pharmaceutical product submitted together with the initial application - EURO 49,9 (up to a maximum of EURO 498,8);

iii) for each additional application for the registration of a new pharmaceutical form submitted after the initial registration application - EURO 74,8;

iv) for the manufacturing authorisation application - EURO 249.

The price of laboratory tests is set out by the entity that performs them, and 20% is added on top in order to cover INFARMED’s technical and administrative costs.

Conclusions

Homeopathy created a quite peculiar and interesting commercial circuit around itself. Shops that sell these kinds of products compete with pharmacies providing the customers with an enormous variety of specific products along with some propaganda suggesting that patients can have a more direct intervention in their personal healthcare strategy. The growth both in stores and in use of these products shows that there is a real growing market here and also demonstrates that consumers want to have more and more information regarding the different therapies available for their health problems.