Ukraine MoH working group discusses reference pricing draft resolution

Discussions held at the first meeting of the Ukrainian Ministry of Health (MoH) working group on reference pricing were reported in the Ukrainian source Apteka. The main topic considered was the government's draft resolution "On the reference pricing of medicines", published for public comment by the MoH on 26 May 2016 (available in Ukrainian here).

Reference pricing of medicines

Deputy Health Minister Roman Ilyk highlighted the current problem in Ukraine of low availability of medicines for a number of reasons, including "unreasonably" high prices for certain drugs and limited funding for the health system overall. He noted that around 90% of drugs are purchased at citizens' own expense, and that patients mostly consume minor medications.

He also pointed out that, in an analysis by the Civio Foundation, a Spanish NGO, which compared the prices of 14 basic drugs in 61 countries (mostly developing countries), the cheapest generic drugs in Ukraine were priced less than in other countries. He also stressed that the interests of domestic producers should be taken into account, since more than 76% of packs of drugs consumed in Ukraine are domestically produced.

He proposed three steps to improve economic accessibility of medicines:

• Simplification of Ukrainian registration for medicinal products approved in countries with a strict regulatory system – a process already completed

• Approval of the updated National List of Essential Medicines

• The introduction of reimbursement for essential medicines recommended by the World Health Organization (WHO) for the treatment of common diseases

The government plans to implement this plan as soon as possible, in the context of current reforms, including the approval of a national policy on medicines for the period until 2025, introduction of automatic recognition of good manufacturing practice (GMP) certificates issued by regulatory authorities of other countries, and preparations for the introduction in 2017 of reimbursement of drugs from the National List.

With regard to reference pricing, attempts in Ukraine to compare the prices of drugs in different countries have not been yielding the expected results, one of the main complicating factors being currency devaluation.

In the current draft resolution "On the reference pricing for medicines", it is proposed that the maximum level of wholesale prices be calculated separately for original and generic drugs. Pricing for original drugs may be carried out by comparing their price in reference countries (not specified in the source), and the lowest value among all the reference countries will be selected as the wholesale price in Ukraine. For generic drugs, calculation of wholesale prices will use internal referencing, according to wholesale prices of reference/original drugs registered in Ukraine. Detailed mechanisms are still to be discussed, but the government intends to ensure the process of declaring the price is comfortable for both the applicant and the objective interests of the patients, and that the decision-making process is transparent to avoid any risk of corruption in the system.

Reimbursement for essential medicines

It was proposed that procedures for reimbursement of essential medicines from the National List be considered in the context of the Ukrainian Cabinet's 1998 resolution "On regulation of free and concessional dispensing medicines prescribed by doctors in the case of outpatient treatment of certain groups and in certain categories of diseases", reported by Apteka in Ukrainian here. This resolution defines the populations of outpatients where prescribed medicines should be dispensed free of charge or on favourable terms, and relevant categories of diseases.

The sources of funding for reimbursement are the local budgets and many drugs fall into this preferential category. As a result of this, specific drugs are sold preferentially at different prices in different pharmacies. Bearing this in mind, the MoH proposes to delete from the category list those diseases that fall under state target programmes to avoid duplication of funding. However, it proposes to expand the list of cardiovascular diseases, to provide 100% security of funding for children, and to create a list of essential drugs from the WHO basic list. Draft regulations for this new revised National List of Essential Medicines have recently been re-published for public consultation (see Ukraine: 30 June 2016: Ukrainian MoH publishes revised draft regulations for drug inclusion in National List of Essential Medicines).

The MoH expects to optimise the model for reimbursement in 2017, with vulnerable people receiving 100% funding for drugs including those on the National List and those used to treat priority diseases other than those in the state target programmes. The working population will contribute to the costs of medicines.

Ilyk also stressed that prescriptions for drugs for reimbursement should use the international non-proprietary name (INN) and pharmacies should be informed in each case about the level of compensation and reference prices.

Additional factors for consideration regarding the availability of medicines included: access to the purchase of foreign currency by importers; a separate budget fund to channel parts of funds received from value-added tax (VAT) and excise taxes on alcohol and tobacco; partial reimbursement of medicines; abolition of VAT on medicines, or reduction to 2–3%; and introduction of regressive wholesale and retail margins (the more expensive the drug, the lower the margin).

The Acting Head of Pharmaceutics and Pharmaceutical Products at the MoH, Taras Lyaskovskiy, reported that development of reference documents on pricing and reimbursement should be completed by August 2016, for government approval during August.

Outlook and implications

This proposed plan will form a crucial part of the Ukrainian MoH’s pharmaceutical procurement and reimbursement strategy, as part of a series of ongoing wide-ranging developments in the Ukrainian healthcare system (see Ukraine: 2 February 2016: Ukrainian MoH prepares national drug policy plan). Once the new system is adopted, the MoH working group aims to monitor the effectiveness of implementation of the new legislation, with the aim of providing the population with a fair reimbursement system for high-quality, effective, and affordable medicines. Further meetings will take place once a month, and expansion of the group is planned. The Ukrainian cabinet previously removed reference pricing, in order to stabilise drug prices during fluctuations in the Ukrainian currency (see Ukraine: 7 July 2015: Ukraine's cabinet regulation removing reference pricing and correction of prices to reflect exchange-rate changes comes into effect). The new Ukrainian reference pricing system should stabilise geographical fluctuations in prices, improve transparency for both applicants and patients, and address some of the recent issues regarding overpricing and low availability of drugs in some sectors.