How is health care in your jurisdiction organised? The basic principles of the organisation of the health-care system are governed by Act CLIV of 1997 (the Health-care System Act), more specifically by sections 141 et seq. Pursuant to section 141, the state is ultimately responsible for the state of health of the population, and for the creation of a system that protects, promotes and – if necessary – restores it. Pursuant to section 143 of the Health-care System Act, the state organs in Hungary, such as the
parliament (as the legislative body), the government, the responsible minister, the state administrative organ responsible for health care, health insurers, municipalities, national health councils (NHCs) and regional health councils (RHCs), are charged
with the tasks of organising and governing the health-care system. In the interests of promoting and protecting the general health of the population, the state supports and promotes the lawful activities of professional associations and public bodies in the health-care system. One of the paramount tasks of the parliament is the adoption of a national health development programme (the NHDP) which is the basis and foundation of the medium-term strategic planning in the health-care sector. The NHDP contains, among other things, an outline of the state of health of the general population with special emphasis on the more problematic areas, a determination of the aims to develop and protect the population’s health, the tasks that need to be fulfilled and the means necessary to achieve those aims.

At a ministerial level, the government is, among other things, charged with the preparation of the NHDP and its submission to parliament. It also determines the basic principles and aims of the policies in the health-care sector, leads and coordinates the
execution of the administrative tasks in the health-care sector, takes care of its obligations under international treaties, performs certain duties to prevent disasters and assumes other roles assigned to it by legislation.

Other bodies, such as the NHCs, RHCs, health insurances and local municipalities fulfil the tasks further down the hierarchy. For example, the local municipalities ensure that their respective territories are appropriately supplied with general practitioners, paediatricians, dentists, etc, whereas health insurers need to ensure the financing of the services performed.

2.   How is the health-care system financed in the outpatient and inpatient sectors? The basic principles of the funding of the health-care system are regulated by section 142 of the Health-care System Act. Pursuant to section 142(1) , the state is
ultimately responsible for securing the financial coverage necessary for an appropriate medical supply. Such supply is ultimately secured by means of both the central governmental budget (as opposed to the budget of the municipal authorities) and the health insurance fund. 

More specifically, Act LXXX of 1997 (the Social Insurance Act) elaborates on how to finance the health-care system and with it all sorts of medical care. Pursuant to section 2(1) of the Social Insurance Act, Hungarian citizens and – if certain legislative conditions are fulfilled – residents living in Hungary have to be part of a so-called collective risk-sharing community. This collective risk-sharing is
realised by a mandatory social security system that the participants have to support financially according to their income, that is, they have to make contributory payments. The persons and entities liable for payment and the amount of the payment of the contribution depend on the status and income of the insured person. For instance, if the insured person is an employee, both the employer and the employee are liable to bear a certain percentage of the contribution depending on the income of the employee.

Compliance – pharmaceutical manufacturers

3.    Which legislation governs advertisement of medicinal products to the general public and health-care professionals? The general rules of commercial advertising are laid down in Act XLVIII of 2008 on the Basic Requirements and Certain Restrictions of Commercial
Advertising Activities. This Act governs issues such as general advertising prohibitions and restrictions, misleading and comparative advertising, etc. However, the legislation governing the advertisement of medicinal products in general is Act XCVIII of 2006 on the General Provisions Relating to the Reliable and Economically Feasible Supply of Medicinal Products and Medical Aids and on the Distribution of Medicinal Products.

4.   What are the main rules and principles applying to advertising aimed at health-care professionals? The main rules applying to advertising aimed at health-care professionals are laid down in Act XCVIII of 2006. Pursuant to section 12, the holder of the marketing authorisation of a medicinal product or the authorised distributor of a medicinal product (ie, distributors) and the manufacturer of the medical aid or its authorized representative may engage in promotional activities aimed at professionals (persons with entitlement for prescription, distribution or instructions as to the use of medical products) only after having obtained the relevant authorisation (ie, if they have been registered with the Health Insurance Supervisory Authority). The National Medical
Official's Office issues the authorisation upon request to distributors of medicinal products or their agents registered in Hungary, and to manufacturers of medical aids or their authorised representatives.

As such, distributors of medicinal products and manufacturers of medical aids or their authorised representatives may engage in promotional activities upon being registered and authorised by the National Medical Official's Office. The aforementioned
request must indicate the applicant’s name and address, the name and address of the agent and the company registration number. The holder of the authorisation must notify the National Medical Official's Office of any changes in the particulars contained in the application or in the authorisation itself within eight days.

The registry of licences contains – among other things – the names of persons carrying out the promotional activities, data on the promoter’s qualification and the promoter’s declaration that he or she has no conflict of interest. A promoter is deemed in
a conflict of interest if he or she is engaged in the promotion of medicinal products – not including scientific activities under copyright protection – in a medical institution with which he or she has a contractual relationship in accordance with section 7(2) of Act LXXXIV of 2003 on Health-care Professionals (eg, if he or she is a volunteer, entrepreneur, public servant, clerical person, etc.). The aforesaid shall not apply to persons engaged in the network of medical sales representatives of the government body for pharmaceuticals.

For further rules and principles applying to advertising aimed at health-care professionals, please see question 9. Further regulations on additional issues related to the above are laid down in Regulation No. 3/2009 of the Minister for Health Care. In practice, it is important that advertisers register with the National Medical Official's Office and that they pay the fees, which may be considerable. In the case of some medications, the advertiser has to prove his or her qualification, the procedure of which is laid out in Act XCVIII of 2006 and Regulation No. 3/2009 of the Minister for Health Care.

Please also note that the Health Insurance Supervisory Authority, which was until September 15, 2010 the competent authority of the mentioned registrations, applied a contra legem definition of ‘advertisement aimed at health-care professionals’. According to
an official opinion dated 2 September 2009, which is contrary to section 5 of Regulation No. 3/2009 of the Minister for Health Care, it considered the provision of information that can also be aimed at consumers an advertising activity aimed at health-care professionals if such information is directly transmitted to health-care professionals. This interpretation of the Health Insurance Supervisory Authority is contrary to section 5 of Regulation No. 3/2009 of the Minister for Health Care, as information provided to consumers
(ie, patients) is not treated as an advertisement aimed at health-care professionals.

Where advertisers provide the aforementioned kind of information without having obtained the necessary permit, they can be fined up to E100,000. This fine can be contested in court, but there is no case law on the matter. It is submitted that the Health Insurance Supervisory Authority interpreted the above-mentioned provision in a very broad way because it tries to force advertisers to obtain a
permit and to pay corresponding fees even where they may not be obliged to do so under the aforementioned provision. The fees can be as high as 400,000 forints.

The relevant definition of Regulation No. 3/2009 of the Minister for Health Care changed on 1 October 2009 and renders the definition more accurate. However, it is by no means certain that the now competent National Medical Official's Office will not follow a similar practice.

5.   What are the main rules and principles applying to advertising aimed at the general public? Act XCVIII of 2006 generally bans the advertising of medical products aimed at the public. The only exceptions are prescription-free medical products and medical
aids that are not subject to state subsidies. The Act also lays down not only the compulsory elements of an advertisement (eg, the name of the product, an express invitation to read the information leaflet, the pattern of correct usage, etc) but also specifies what information cannot be given (eg, recommendation by scientists, information that could prompt readers to self-diagnose, guarantees of success, etc). These provisions, however, do not apply to advertisements containing only the name of the producer of the
medicine. Such advertisement may only be made in the form of flashback advertisements (advertising of prescription-free products that refers back to advertisements in the same advertisement block if the previous advertisement complied with the regulations). The ban for advertising prescription-only medicines does not apply anti-smoking and to vaccination campaigns, provided
that they are authorised and are aiming at health education

6.   What are the most common infringements committed by manufacturers with regard to the advertisement rules? The majority of infringement cases launched by the National Competition Authority are connected with misleading advertising of food supplements. The infringement is usually committed by stating non-proven positive effects or by announcing that the product has the lowest price, the best effects on health or any other statement that is exaggerated.

7.   Under what circumstances is the provision of information regarding off-label use to health-care professionals allowed? Providing information on off-label usage to health-care professionals falls under the scope of advertisement aimed at health-care professionals.
Accordingly, the range of information provided may be significantly wider than in the case of consumer-aimed advertisement, but no information may be provided that cannot be supported by research and development. Furthermore, pursuant to Regulation
No. 44/2004 of the Ministry for Health-care, Social Affairs and Family, off-label use is only allowed with the express and case-by-case based authorisation of the National Institute of Pharmacy. This authorisation may be gained by submitting a detailed request containing the reasons for and expected effects of the off-label usage. The request must contain evidence that the off-label prescription is likely to cause an augmentation, stabilisation or cure of the patient’s state of health. Furthermore, this may only be done if other medication does not make a treatment possible.

8.   Which legislation governs the collaboration of the pharmaceutical industry with health-care professionals? The regulations are incorporated into the legislation on the advertisement of products, which means that Act XCVIII of 2006 and Regulation 3/2009 of the
Minister for Health Care are applicable.

9.   What are the main rules and principles applying to the collaboration of the pharmaceutical industry with health-care professionals? Section 14 of Act XCVIII of 2006 sets out the main rules governing the collaboration between the pharmaceutical industry and health-care professionals. Pursuant to section 14(1) of this Act, medical sales representatives may not provide, offer or promise any gifts, pecuniary advantages or benefits in kind to persons qualified to prescribe or supply medicinal products or medical aids, unless they are inexpensive and are related to the health-care activity in which such persons are engaged. Medical sales representatives may not provide, offer, or promise money in any way or form.

Section 14(2) goes on to provide that any entertainment or hospitality functions provided by medical sales representatives during events and programmes held solely for the promotion of  medicinal products and medical aids shall always be reasonable in scope and remain subordinate to the main objective of the meeting. Only health-care professionals and persons engaged in the supply and distribution of medicinal products or medical aids may be invited to such trade and promotional events.

Any support provided – whether directly or indirectly – for events and programmes for purely professional and scientific purposes shall always be reasonable in scope and remain subordinate to the main scientific objective of the meeting. Only health-care professionals and persons engaged in the supply and distribution of medicinal products or medical aids may be invited to such trade and scientific events. Promotional activities may be carried out during such events and programmes if the promotional activity (eg, a lecture -concerning the application of a specific product, demonstration of a specific product, leasing of exhibition space) is clearly distinguished from the trade and scientific programmes. For the aforementioned purposes, it makes no difference whether the promotional activity  is performed directly or indirectly.

Section 14(4) provides that persons engaged in health-care or scientific activities may be provided with in-kind support for participating in trade events and training courses. Such support may be provided to cover expenses (such as travel expenses,
accommodations, entry fees, etc) arising directly out of or in connection with attending the events. Other specific legislation may contain further provisions with respect to promotional activities, including the regulations pertaining to free product samples and donations that may be provided to persons qualified to prescribe or supply medicinal products or medical aids.

XCVIII of 2006.

In certain cases, manufacturers, through the medical representatives of such manufacturers, provide unlawful benefits in consideration for prescribing or otherwise soliciting their products. In some other cases, manufacturers do not enter into
a contract with their medical representatives in the prescribed form of contracts, but as research consultants and other types of subcontractor, evading some taxation duties and the yearly state fees to be paid according to the number of the employed medical representatives. Due to increased control during the past couple of years, the frequency of such violations has significantly decreased.

11.   What are the main rules and principles applying to the collaboration of the pharmaceutical industry with patient organisations? As of September 2009, hardly any patient organisations are present in Hungary; those that present have virtually no political clout. The only explicit right legislation confers on them (if they were present at all) is their role in the mediatory process between patients and medical institutions (section 6 of Act CXVI of 2000).

12.   Are manufacturers’ infringements of competition law pursued by national authorities? Yes. The competent authority is the Hungarian Competition Authority (HCA). The HCA has full jurisdiction in all affairs in connection with the infringement of competition law, and is also the competent body to authorise mergers within the sector.

According to Act LVII of 1996 on the Prohibition of Unfair Trading Practices and Unfair Competition (the Competition Act), a dominant position is not sanctioned per se, but only the abuse of it. A company is deemed in a dominant position if it can determine its
practices without considering the reactions of other competitors, suppliers or consumers. If a company in such a position pursues activities that, for example, aim to exclude or hinder other competitors, or force other parties to accept unwanted conditions, the HCA will start proceedings against such company.

Restrictive agreements among competitors are also generally forbidden, both horizontally and vertically. Horizontal agreements are those between market players on the same level of the market (eg, two manufacturers), while vertical agreements are those
between market players on different levels of the market (eg, a manufacturer and a distributor). Exceptions apply pursuant to article 13 of the Competition Act to agreements of minor importance (where the combined market share of the parties does not exceed 10 per cent) or in the case of companies which are under the same management. The Hungarian government may grant exemptions from these rules by an act of legislation (a governmental regulation if, for instance, the agreement is conducive to market development within that particular industry. Please note that exemptions and exceptions are not the same. Exceptions are statutory derogations from the rule, while exemptions are granted on an ad hoc basis by the Hungarian government by way of

governmental regulation.

13.   Is follow-on private antitrust litigation against manufacturers possible? According to section 339 of the Hungarian Civil Code, a person causing damage to another person in violation of the law shall be liable for such damage. The injuring party, however, shall not be liable if it can be proven that he or she has acted in a manner that can generally be expected in the given situation. This
makes antitrust litigation theoretically possible. However, there has been no known major case in which the pharmaceutical industry was involved.

Compliance – medical device manufacturers

14.   Is the advertising of medical devices and the collaboration of manufacturers of medical devices with health-care professionals and patient organisations regulated as rigorously as advertising and collaboration in the pharmaceuticals sector? Yes. Medical devices (‘medical aids’ in the words of the relevant legislation, which is Act XCVIII of 2006) fall under the same scope as medical
products and they are also divided into the same two categories, namely medical aids that can be subject to state subsidies, and medical aids with free price. The regulations are identical.

Pharmaceuticals regulation

 15.   Which legislation sets out the regulatory framework for granting marketing authorisations and placing medicines on the market? The main framework is laid down in Regulation 52/2005 of the  Minister for Health Care.

16.   Which authorities may grant marketing authorisation in your jurisdiction? Authorisation may be granted by the governmental body for pharmaceuticals (the National Institute of Pharmacy) or in accordance with either Regulation (EC) No. 726/2004 of the
European Parliament and of the Council or Regulation (EC) No. 1901/2006 of the European Parliament and of the Council or Regulation (EC) No. 1394/2007 of the European Parliament and of the Council, by the European Commission.

17.   What are the relevant procedures? The relevant provisions laid down by Regulation No. 52/2005 of the Minister for Health Care define one main and three special procedures. The general procedure describes the regulation of medicines in general. The procedures begin with the filing of the request to register a medicine. The request has to contain, among other things, the data of the
applicant; the applicant's billing and mail address, components and agents of the medicine; the production technology used; the result of physical–chemical, biological and microbiological, pharmacological, toxicological, preclinical test, pharmacovigilancy requirements and measures; a  draft of the usage label; the packaging, etc. The National Institute of Pharmacy will then decide on the basis of the available documentation.

Medicines with isotopes require additional documentation. For the authorisation of isotope generators, a detailed description of the system has to be handed in that also describes the quality and -composition of the daughter isotopes, as well as qualitative
and quantitative descriptions of the eluate or sublimate. Homeopathic and traditional medicines may be subject to a simplified procedure if the label of homeopathic medicines contains no therapeutic advice, they are applied externally or taken
orally and their dilution guarantees that they are harmless. Traditional medicines may be subject to the simplified procedure if they have already been used therapeutically for at least 30 years, are applied externally or taken orally and the available information on the medicine is sufficient to guarantee a usage based on tradition.

The National Institute of Pharmacy can also issue a temporary marketing permit for medicines that have not yet completed the clinical trial, but are likely to have a positive benefit–risk ratio compared to any other medicine, or that are used to halt the
spread of toxic, nuclear, contagious or chemical epidemics. This permit is valid for one year only. Furthermore and under exceptional circumstances, the temporary marketing permit can also be issued if the positive risk-benefit ratio of the medicine cannot be proven, but only rendered likely, due to the low number of test patients available to the clinical trials.

18.   Will licences become invalid if medicinal products are not marketed within a certain time? Are there any exceptions? No. Marketing licences, however, generally expire after five years. A licence can be renewed by submitting a request no later than six months before the expiry date. The competent authority will re-assess the risk–benefit balance and, based on its findings, renew the marketing licence for another five years or for an unspecified period of time.

19.   Which medicines may be marketed without authorisation? All medicines marketed within Hungary must receive an authorisation from the National Institute of Pharmacy or the European Commission. All medicine marketing is conducted within a closed chain 

that is strictly controlled by the National Institute of Pharmacy and the National Public Help and Medical Officer Service. The National Institute of Pharmacy is the authority controlling Hungarian GMP (which is a quality standard); it issues the marketing authorisations for medicines and conducts tests on medicines before their wholesale authorisation is granted. The National Public Help and Medical Officer Service is a central, coordinating and supervisory authority responsible for public health. Products currently still marketed as
‘products with medical effect’ will have to be reclassified by 31 March 2011 at the latest if its distributor wishes to market them with its effect on health. No product may be marketed as ‘product with medical effect’ after 1 April 2011. Such products can therefore be classified as either subscription-free or traditional medicine.

20.   What, according to the legislation and case law, constitute medicinal products? According to the statutory regulations (Act XCV of 2005), medicines are classified according to their functions. Pursuant to section 1 of the Act XCV of 2005, a medicinal

product means any substance or combination of substances presented for treating or preventing disease in human beings or any substance or combination of substances which may be used in or administered to, human beings, either with a view to restoring, correcting or modifying physiological functions by exerting a pharmacological, immunological or metabolic action, or to making a medical diagnosis.

Pricing and reimbursement of medicinal products

21.   To what extent is the market price of a medicinal product governed by law or regulation? The relevant legislation distinguished between subsidized and free price medicines. The price of the latter may freely be determined by the re-seller. The first
category is further divided into medicines (i) without marketing authorisation and (ii) with marketing authorisation. For the first sub-category, the margin of wholesalers may not be higher than 20 per cent of the import price excl. VAT, while the margin of retailers may not be higher than 40 per cent of the wholesale price. For the second sub-category, the margins of wholesalers gradually 

decreases from 12 to 5 per cent depending on the products import price excl. VAT, while the margin for retailers decrease from
26 per cent to 17 per cent of the wholesale price, while being additionally capped at approx. EUR 3.50 per product.

22.   In which circumstances will the national health insurance system reimburse the cost of medicines? The price of state-subsidised medicines is determined by the manufacturer. The National Health Insurance Fund (NHIF) will, according to principles of price and health-care aims, determine if a product may be subject to state subsidy and specifically determine the amount of state subsidy, which may be a proportional (up to 100%) or fixed-amount subsidy. The patient will then only have to pay the difference between the manufacturer’s price and the state subsidy. The subsidy is directly transferred to the  pharmacy, meaning that the patient does not have to apply for reimbursement. The prices are made publicly available in the official paper of the NHIF.

During the issuance of the marketing licence, some medicines are determined to be used only for inpatient treatment. The price of these prescribed medicines is completely refunded by the NHIF. The NHIF will only subsidise medicines to the extent
described on the label. In case of off-label prescription, the costs of the medication may only be reimbursed at the discretion of the NHIF.

23.    If applicable, what is the competent body for decisions regarding the pricing and reimbursability of medicinal products? (Please also address the respective proceedings.) The NHIF is the competent authority to decide if a medicine shall be added to the list of

medicines receiving state subsidy. The relevant procedure can be initiated by a request submitted on a standard form with the required annexes. Within the procedure, the price of the medicine is determined by the manufacturer, but the NHIF will, based on principles of health-care aims and cost-effectiveness determine if the medicine shall receive state subsidy and to what extent. The procedural deadline for the NHIF is, depending on the agent, 60 or 90 days, while the procedural fees vary between approx. EUR
1100 and EUR 5500, depending on the type of procedure and agent.  These decisions of the NHIF are published monthly. In consequence, no retailer will be entitled to sell the medicines for a higher price than the price determined in the decision on the acceptance plus the applicable maximum margin described in the answer to Question 21.

24.    Are manufacturers or distributors of medicinal products statutorily obliged to give a discount? (If so, please provide the respective requirements.) No. Manufacturers, wholesale and retail distributors do however have a payment obligation if they meet certain criteria. Holders of a marketing authorization of state subsidized medicines shall pay a contribution amounting to 12 per cent of the quotient of the state subsidy multiplied by the manufacturer's price or import price and the gross retail price. A similar obligation is imposed on pharmacies having a total  margin over HUF 10,000,000 (approx. EUR 36,000) per fiscal quarter.  In such a case, a so called "solidarity contribution" between 1,5 per cent and 6 per cent of the margin over HUF  10,000,000. Holders of a wholesale license shall also pay a contribution of 2,5 per cent of their total wholesale margin.

Medicine quality and access to information

25.   What rules are in place to counter the counterfeiting and illegal distribution of medicines? If the origin or the composition of a medicine is not in accordance with the labelling, it is considered to be a counterfeit. This can mean that the product contains no agent at all, contains it in lower dosage or contains also other agents or products that contain agents not allowed in Hungary, or that the
distributor is different from the one indicated on the label.

Every member of the distribution chain has to have a valid licence issued either by a Hungarian or another EU member state authority. The National Institute of Pharmacy monitors all legal distribution of medicines from the importation to the final resale.
It also supervises pharmacies and commercial resellers allowed to market prescription-free medicines. To suppress the possibility of illegal medicines on the legal market, medicines destined for resale may only be purchased from authorized wholesalers. Online pharmacies may only operate if they operate from a licensed ‘real’ pharmacy. 

26.   What recent measures have been taken to facilitate the general public’s access to information about prescription-only medicines? Since the promotion of prescription-only medicines is prohibited pursuant to Act XCVIII of 2006, the information available on the -subject is very limited. The only information allowed is that such as the product’s name, agents used, ATC code and
classification (prescription-only, prescription only by specialist,prescription-free, etc).

27.   Outline major developments to the regime relating to safety monitoring of medicines. The regime of pharmacovigilance was already subject to change before the debate started within the European Union. In 2005, the relevant provisions of Act XCV of 2005 on medicinal products for human use and on the amendment of other regulations related to medicinal products have completely reshaped the Hungarian legal background. It has nearly completely abolished Act XXV of 1998 on medical products for
human use and is in compliance with the relevant EC legislation. The National Institute of Pharmacy may conduct regular and irregular inspections if side effects are observed.

Holders of marketing authorisation, pharmacists engaged in wholesale or distribution, and doctors are obliged to report all noticed quality deficiencies to the competent authority. This authority will then investigate the medicine and take appropriate actions that be as far-reaching as removing it from the market. Further detailed rules are laid down in Regulation No. 52/2005 of the Minister for Health Care.