Regulations Regarding the Principles for the Determination of the Price of Medicinal Products

Issued pursuant to
Section 5, Paragraph four
of the Pharmaceutical Law

I. General Provisions

1. This Regulation prescribes the principles for the determination of the price of medicinal products (except veterinary medicinal products).

2. This Regulation does not apply to the determination of the price of those medicinal products, which are procured in accordance with the Public Procurement Law.

[1 April 2008]

3. The price of medicinal products included in the list of reimbursable medicinal products shall be determined in accordance with the regulatory enactments regarding the procedures for reimbursement of expenditures for the acquisition of medicinal products and medical devices in outpatient medical treatment.

II. Duties of Medicinal Product Manufacturers, Medicinal Product Wholesalers and Pharmacies

4. A medicinal product manufacturer or an authorised representative thereof (hereinafter - the medicinal product manufacturer), upon commencing the distribution of medicinal products in the territory of Latvia, shall provide, in writing and electronic form, to the State Agency of Medicines information on the sales price of the relevant medicinal product in Latvia specified by the medicinal product manufacturer (for each form of medicinal product depending on the amount of active substances in a medicinal product unit and the number of medicinal product units in packaging) without value added tax (hereinafter - the manufacturer's price).

[3 September 2013]

5. A medicinal product manufacturer shall inform the State Agency of Medicines and wholesalers which distribute medicinal products manufactured thereby of the planned changes for the medicinal product manufacturer's medicinal product price not later than 30 days before the application of the medicinal product manufacturer's new medicinal product price. The medicinal product manufacturer shall provide justified information regarding the reasons for the increase of the price of medicinal products upon a written request of the State Agency of Medicines within a time period of 15 days.

6. If a medicinal product manufacturer is not also concurrently the holder of a registration certificate of medicinal products, the holder of a registration certificate of medicinal products or authorised representative thereof (hereinafter - the holder of a registration certificate of medicinal products) shall fill the duties of the medicinal product manufacturer referred to in Paragraphs 4, 5 and 22 of this Regulation. In such case costs, which emerge due to the registration of medicinal products and the preparation thereof for distribution, shall be indicated separately in addition to the price to be declared by the medicinal product manufacturer.

7. A parallel distributor of medicinal products, concurrently with an announcement regarding commencing of the distribution of medicinal products for parallel distribution in the territory of Latvia, shall provide, in written and electronic form, to the State Agency of Medicines information on the sales price of the relevant medicinal product in Latvia (for each form of medicinal product depending on the amount of active substances in a medicinal product unit and the number of medicinal product units in packaging) without value added tax (hereinafter - the parallel distributor's price).

[3 September 2013]

8. A parallel importer of medicinal products, concurrently with a submission regarding the issuance of a permit for the distribution of parallel imported medicinal products in the Republic of Latvia, shall provide, in written and electronic form, to the State Agency of Medicines information on the sales price of the relevant medicinal product in Latvia (for each form of medicinal product depending on the amount of active substances in a medicinal product unit and the number of medicinal product units in packaging) without value added tax (hereinafter - the parallel importer's price).

[3 September 2013]

9. A parallel distributor of medicinal products shall inform the State Agency of Medicines of the planned changes for the parallel distributor's price and a parallel importer of medicinal products shall inform the State Agency of Medicines of the planned changes for the parallel importer's price not later than 15 days before the application of the new price. The parallel distributor of medicinal products and the parallel importer of medicinal products shall provide justified information regarding the reasons for the increase of the price of medicinal products upon a written request of the State Agency of Medicines within a time period of seven days.

10. The price for which a medicinal product wholesaler sells medicinal products (hereinafter - the wholesaler's price) shall be determined by multiplying the manufacturer's price by the correction factor and adding the correction sum and the value of value added tax. The correction factor and correction sum shall be determined on the basis of the manufacturer's price (Annex 1). In order to determine the wholesaler's price, the following formula shall be used:

LC = RC x k + X + PVN, where

LC - wholesaler's price;

RC - manufacturer's price;

k - correction factor;

X - correction sum in lats;

PVN - value added tax.

[3 September 2013]

11. In the case referred to in Paragraph 6 of this Regulation, in calculating the wholesaler's price according to the formula indicated in Paragraph 10 of this Regulation, the separately indicated costs, which occur due to the registration of medicinal products and preparation thereof for distribution, shall be added to the manufacturer's price.

12. The wholesaler's price determined in accordance with Paragraph 10 of this Regulation shall be the maximum permissible wholesaler's price regardless of the number of medicinal product wholesalers involved in the distribution process of the particular medicinal products.

13. The price for which a pharmacy sells medicinal products (hereinafter - the pharmacy price) shall be determined by multiplying the price for which the pharmacy procures medicinal products from a medicinal product manufacturer or medicinal product wholesaler without value added tax (hereinafter - the procurement price) by the correction factor and adding the correction sum and the value of value added tax. The correction factor and correction sum shall be determined on the basis of the procurement price (Annex 2). In order to determine the price of pharmacy, the following formula shall be used:

AC = IC x n + Y + PVN, where

AC - pharmacy price;

IC - procurement price;

n - correction factor;

Y - correction sum;

PVN - value added tax.

[3 September 2013]

14. A pharmacy price determined in accordance with Paragraph 13 of this Regulation shall be the maximum permissible pharmacy price regardless of the number of pharmacies involved in the distribution process of medicinal products.

15. The price of medicinal products prepared in a pharmacy shall be determined by adding the correction sum according to the pharmaceutical form (Annex 3) and the value of value added tax to the price which is formed from the costs of raw materials and packaging materials. In order to determine the price of medicinal products prepared in a pharmacy, the following formula shall be used:

AIZC = II + IMI + Z + PVN, where

AIZC - price of medicinal products prepared in the pharmacy;

II - cost of raw materials;

IMI - costs of packaging materials;

Z - correction sum;

PVN - value added tax.

[3 September 2013]

16. The price of medicinal products prepared in a pharmacy determined in accordance with Paragraph 15 of this Regulation shall be the maximum permissible price of medicinal products prepared in the pharmacy.

17. If a pharmacy purchases medicinal products prepared by another pharmacy, such pharmacy shall apply an extra charge that does not exceed 10 per cent of the price determined in accordance with Paragraph 15 of this Regulation without value added tax.

17.¹ If industrially manufactured medicinal products are packaged at a pharmacy from a larger packaging by opening the immediate packaging, the price of the packaged medicinal products shall be determined by multiplying the procurement price of the unit of a pharmaceutical form to be packaged by the number of units to be contained in the packaging and adding the costs of the used packaging material (without value added tax), the correction sum - EUR 0.5 for the first 10 units and EUR 0.15 for each subsequent 10 units - and the value of value added tax.

[25 August 2015]

17.² The price of industrially manufactured medicinal products determined in accordance with Paragraph 17.¹ of this Regulation shall be the maximum permissible pharmacy price of medicinal products, provided that medicinal products are packaged by opening the immediate packaging.

[25 August 2015]

17.³ If industrially manufactured medicinal products are packaged without damaging the immediate packaging, the pharmacy has a right to apply a payment in the amount of up to EUR 0.20 (with value added tax), providing a copy or a printout of the instructions for use.

[25 August 2015]

17.⁴ If industrially manufactured medicinal products are packaged for an individual patient for weekly consumption divided per days, specifying the intended time of taking the medicinal product, the pharmacy shall determine the price of a medicinal product unit pursuant to the formula referred to in Paragraph 13 of this Regulation, and the pharmacy has a right to apply a payment for packaging by informing the person ordering the packaging in advance.

[25 August 2015]

18. Medicinal product manufacturers, medicinal product wholesalers and pharmacies shall ensure the availability of calculations related to the price of medicinal products to the Health Inspectorate during an inspection.

[1 April 2008]

III. Duties of Supervisory Institutions

19. The State Agency of Medicines shall:

19.1. establish and maintain a database in which the information provided by the manufacturer referred to in Paragraph 4 of this Regulation, the information regarding the manufacturer's price provided by the holder of a registration certificate of medicinal products referred to in Paragraph 6 of this Regulation, as well as the costs which occur due to the registration of medicinal products and preparation thereof for distribution is included (hereinafter - database);

19.2. include the information regarding the parallel distributor's price to be provided by the parallel distributor referred to in Paragraph 7 of this Regulation and the information regarding the parallel importer's price to be provided by the parallel importer referred to in Paragraph 8 of this Regulation in the database;

19.3. update the data of the database, as well as data which the medicinal product manufacturer, holder of a registration certificate of medicinal products, parallel distributor of medicinal products or parallel importer of medicinal products provides in accordance with Paragraphs 5, 6 and 9 of this Regulation within seven days after the receipt of the information;

19.4. constantly analyse the data of the database, studying the risk factors that endanger the stability of the price of medicinal products;

19.5. after the study of the risk factors referred to in Sub-paragraph 19.4 of this Regulation, request justified information regarding the reasons for the price increase of medicinal products from the submitter of data in writing;

19.6. analyse the information referred to in Sub-paragraph 19.5 of this Regulation within 15 days after the receipt thereof and inform the Ministry of Health regarding the cases of unjustified increase of the price of medicinal products;

19.7. prepare and submit to the Ministry of Health quarterly reports regarding the dynamics of the medicinal product price;

19.8. ensure the availability of the database to the Health Inspectorate.

[1 April 2008]

20. The Health Inspectorate shall control the implementation of this Regulation.

[1 April 2008]

IV. Closing Provisions

21. Cabinet Regulation No. 501 of 29 December 1998, Regulations for the Formation of Price of Medicinal Products and Pharmaceutical Products (Latvijas Vēstnesis, 1999, No. 1), is repealed.

22. A medicinal product manufacturer shall provide the information referred to in Paragraph 4 of this Regulation regarding medicinal products the distribution of which is commenced in the Republic of Latvia until coming into force of this Regulation to the State Agency of Medicines until 1 January 2006 and henceforth twice a year as of first date of each half-year, as well as when the manufacturer's price changes.

23. A parallel distributor of medicinal products shall provide the information referred to in Paragraph 7 of this Regulation regarding the parallel-brought-in medicinal products the distribution permit of which has been issued until the coming into force of this Regulation to the State Agency of Medicines until 1 January 2006, as well as henceforth if the parallel distributor's price changes.

24. A parallel importer of medicinal products shall provide the information referred to in Paragraph 8 of this Regulation regarding the parallel-imported medicinal products the distribution permit of which has been issued until the coming into force of this Regulation to the State Agency of Medicines until 1 January 2006, as well as henceforth if the price of parallel importer changes.

25. This Regulation shall come into force on 1 December 2005.

Acting for the Prime Minister,
Minister for Finance O. Spurdziņš

Minister for Health G. Bērziņš

Annex 1
Cabinet Regulation No. 803
25 October 2005

Correction Factors and Correction Sums Complying with the Price of the Medicinal Product Manufacturer

[3 September 2013]

Annex 2
Cabinet Regulation No. 803
25 October 2005

Correction Factors and Correction Sums Complying with the Procurement Price of Medicinal Products

[3 September 2013]

Annex 3
Cabinet Regulation No. 803
25 October 2005

Correction Sums Applicable to the Determination of the Price for Medicinal Products Prepared in a Pharmacy

[3 September 2013; 25 August 2015]

Translation © 2021 Valsts valodas centrs (State Language Centre)