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Bosnia & Herzegovina: Unlawful Delisting of Foreign Medicines Manufacturers

Bosnia & Herzegovina: Unlawful Delisting of Foreign Medicines Manufacturers

Bosnia and Herzegovina
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A scandal shaking the pharmaceutical market of Bosnia and Herzegovina for several years now related to the unlawful delisting of foreign medicines manufacturers has moved to a silent but almost thriller-tense phase as the country awaits the Court of Bosnia and Herzegovina’s final decision. The current countdown was preceded by a unique crisis in 2018, when two subsidiaries of foreign pharma giants that had been delisted decided to fight back, even as a number of smaller players liquidated their companies and withdrew from the market. 

The background of the story is heavily related to the organization of the BiH health care system, which reflects the country’s administrative division and is governed by the Federation of Bosnia and Herzegovina’s (FBH) and Republic of Srpska’s (RS) Ministries of Health. These ministries implement their representative entity’s Laws on Medicines, with an additional level of complexity arising from the existence of yet another administrative division – the ten Cantons in FBH, each with its own Ministry of Health. These ministries create the lists of medicines financed by public funds (i.e., health insurance funds). These health insurance funds implement mandatory health insurance based on the principles of solidarity, mutuality, and equality. Use of the benefits of the compulsory health insurance is conditioned upon payment of the contribution for health insurance. Funds collected from the contributions are then used to finance the lists of medicines available to citizens on the basis of a MD prescription.

The FBH List of Medicines, which includes the pharmaceutical names of the medicines rather than their trade names or their manufacturers, serves as a basis for the Cantonal lists. Those Cantonal lists, however, are created from applications made by the manufacturers which produce the pharmaceuticals required by the FBH list. Hence, the Cantonal Lists consist of specific trade names of medicines and their manufacturers, which is where the plot starts to develop. 

The procedure for the adoption of the Cantonal Lists provides that the applicants need to meet the criteria defined by The Rulebook on Closer Criteria for Placement and Elimination of Medicines from the Lists of Medicines, and usually, once medicines are placed on the list, they remain there until the criteria for elimination from the list are satisfied. Country of origin is not listed as a criterion for being admitted to the list – or for being delisted. This, however, did not prevent the Government of Canton Sarajevo, the economic leader and capital of Bosnia and Herzegovina, from delisting most of the foreign manufacturers from the Positive Lists of Medicines in the renewal process that took place in 2016. The exclusion of foreign manufacturers was justified by the Government of Canton Sarajevo by the existence of sufficient applications to the list by domestic manufacturers with the same pharmaceutical products, and the fact that nearly 40 million euros were allocated from the Cantonal Health Insurance Fund to foreign manufacturers in the previous year. The absurdity of this justification is related to the fact that it is contrary to relevant legislation, which states that regardless of how many applicants with the same pharmaceutical product appear, or how much money they earned in the past year, if they meet the prescribed criteria, they must be placed on the list. The rationale of this legislative solution was to provide the citizens funding the list with greater choice, instead of being limited to a specific manufacturer chosen by the Cantonal Government.

The Cantonal Government misinterpreted Article 9 of the Law on Medicines of FBH supporting the domestic pharmaceutical industry, which says that “…it is obligatory to also include domestic pharmaceutical industry medicines…, in addition to medicines of originators as well as foreign pharmaceutical industry medicines.” Unfortunately, it was incorrectly interpreted to create a sort of descending exclusive list, with domestic manufacturers coming first, and with foreign originators (and then, finally, foreign generic manufacturers), turned to only if the domestic manufacturers lacked the specific pharmaceutical product required by the FBH List.

The consequence of this interpretation was the delisting of a great amount of medicines present on the market for decades and used by the very contributors to the funds, many for chronic conditions, who now being denied their traditional therapy.

Several cases were initiated before the Competition Council against the Cantonal Government and the Federal Ministry of Health.     Due to contradictory decisions by the Competition Council, the matters were taken to the Court of Bosnia and Herzegovina and are pending.

By Emina Saracevic, Partner, Saracevic & Gazibegovic Lawyers

This Article was originally published in Issue 7.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

Bosnia and Herzegovina Knowledge Partner

Maric & Co Law Firm stands on the shoulders of more than 70 years of experience and practice in the legal market of Bosnia and Herzegovina. Having in mind that it is difficult to find a small country with such a complicated political and legal system, we are fully aware that quality advice requires deep understanding of different areas of law. In a country where legislation is created on state, entity and cantonal levels, without proper harmonization, and where the same regulation can be applied differently by two different courts, only domestic lawyers who are well-versed in local regulations and court practices, and who are highly specialized in their practice area, may actually help their client.

With this understanding, today, the firm Maric and Co is the largest law office in the country dealing exclusively with business law. This means that we provide wide expertise in resolving all issues that domestic and international investors encounter when setting up and operating businesses in Bosnia and Herzegovina. The scope of the office allows each of our attorneys to highly specialize in their fields, whilst the size of our team ensures delivery of premium advice and seamless service. Our firm seeks long-term partnerships with clients with the aim of providing the best and most complete solution to the client's legal needs. We are proud to say that our clients do not leave us.

We apply the same principles to our international affairs, aware of the fact that no foreign lawyer can have the same understanding of legal regulations of a country as a domestic lawyer. Therefore, our philosophy is not to open branches in countries where our clients do business, but to closely connect with top tier lawyers in those countries. Our law firm is one of the founding members of SEE Legal – a group of ten leading national law firms from 12 South East European countries. This network enables us to provide the best advice and representation in these countries. Additionally, as a result of our strong relationship with the majority of global law firms, we are able to provide law services anywhere in the world.

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