The Greek National Organisation for Healthcare Provision (EOPPY) forecasts that the total payments pharmaceutical companies will have to make, in the form of clawback and discounts on medicines that it reimburses, will amount to USD876 million in 2016.
Implications | This is substantially higher than in 2015, and the increase is due to the addition of clawback on hospital drugs and the decision to provide reimbursed drugs at no cost to uninsured people. |
Outlook | An amendment to Greece's drug pricing provisions is expected to be revealed in the near future, and it is unclear whether the government is going to opt for further price reduction measures, threatening the ire of pharmaceutical companies, which see volume control as a better solution, among other measures. |
The total amount to be paid by pharmaceutical companies in clawback and discounts on medicines reimbursed by the Greek National Organisation for Healthcare Provision (EOPYY) is expected to reach EUR787 million (USD876 million) in 2016, according to the EOPPY's latest estimates, reported by Greek medical news source Iatronet. The clawback figure includes the newly implemented clawback on hospital medicines that came into force at the beginning of this year.
According to the source, the EOPYY's estimate of the total clawback amount due on these medicines – including the ambulatory and hospital sectors – is EUR 483.560 million. Of this figure, EUR441.140 million is expected to be payable from the exceeding of the budget in the ambulatory sector, and EUR 42.42 million in the hospital sector. Iatronet reports that it is stated in the EOPYY's 10th budget amendment that the hospital clawback on medicines used in EOPYY-funded hospitals for the first half of 2016 reached EUR18.42 million, and that this is expected to reach EUR24 million in the second half.
In addition to the clawback payments, the source predicts that mandatory discounts from pharmaceutical companies to the EOPYY will amount to EUR303.3 million in 2016.
According to the source, based on EOPYY data, the total number of prescriptions written by doctors in Greece for medicines reimbursed by the EOPYY was 48,364,357 during January–August, compared with 44,650,732 in the equivalent period of 2015. This is a year-on-year (y/y) increase of 8.3%.
The figures are particularly concerning, according to the source, because they show that the EOPYY's spending on pharmaceutical reimbursement is out of control. This is especially relevant in the context of the commitments made by the Greek government under its memorandum of understanding (MoU) with its creditors relating to the country's third economic bailout to reduce the amount of clawback that pharmaceutical companies pay – with a commitment made for the gap between the total pharmaceutical spending (including clawback) and the clawback ceiling to be reduced by 30% in 2017 (see Greece: 20 June 2016: Supplemental MoU sets Greek authorities further healthcare cost-containment goals).
Outlook and implications
The estimates of hospital clawback by the EOPYY include only the smaller hospitals that the EOPYY funds; the total clawback paid on hospital drugs in the first six months of this year (the hospital clawback system only came into effect at the beginning of 2016) has been estimated at around EUR99 million (see Greece: 18 October 2016: Greece's total pharma clawback bill expected to reach USD660 mil. in 2016 ). Therefore, the full amount of payments from pharmaceutical companies operating in Greece in the form of clawback and discounts is set to reach around EUR1 billion, if not higher.
Initial estimates for 2015 showed that the total payments due from pharmaceutical companies for clawback and discounts amounted to EUR600 million. The large increase this year is related – in addition to the implementation of hospital clawback – to the decision by the Greek authorities to extend the provision of reimbursed medicines without co-payments to uninsured people, including refugees. At the time this decision was made, pharmaceutical companies made their views clear to the Greek government that they saw a danger of clawback payments reaching unacceptably high levels (see Greece: 18 July 2016: Greek health minister meets with pharmaceutical associations in attempt to resolve spending crunch).
Greece's creditors are expecting new structural measures to be implemented in order to help achieve the narrowing of the gap between the clawback ceiling and the total ambulatory-sector reimbursement spending (which includes eventual clawback payments). The Greek authorities are currently working on a new update of the appropriate legal provisions on the pricing of medicines. The Greek pharmaceutical industry has made its position clear that it does not see any scope in further pricing measures, seeing opportunities to reduce expenditure rather in the exertion of control in the volume of prescriptions issued, as well as in the introduction of more sophisticated cost-containment methods such as health technology assessment. It remains to be seen whether these views will be reflected in the forthcoming legislative proposals.