The new amendment to drug pricing provisions in Greece published in the Government Gazette on 2 December contains no substantial reforms or changes to the previous provisions. The resulting savings will be insufficient to cancel out higher spending on new innovative drugs.
Implications | After speculation that new strict conditions would be applied to rules on market access for new originators, the new pricing provisions actually offered little substantial change. |
Outlook | The failure to ensure sufficient spending reductions through the pricing provisions will most probably mean, in view of rising expenditure on new innovative drugs, greater clawback payments for pharmaceutical companies. |
New drug pricing provisions introduce no major changes
On 2 December, the latest amendments to Greece's drug pricing provisions were published in the Greek Government Gazette, following weeks of speculation concerning their contents, and negotiations between the Greek government and representatives of the troika, and the pharmaceutical industry. Significantly, the latest provisions contain no substantial reform of the system for pricing medicines, in contrast with some reports on the Greek government's plans.
The new provisions leave the rules for pricing originator medicines unchanged. Minor alterations to the rules for pricing off-patent originators and generics include changes to the protective limits for the application of the pricing rules to generics, aimed at helping ensure the continuous supply of cheap medicines in Greece. Thus, under the new amendment, from 2 December the rules will apply only to generics priced above EUR6 (USD6.4) and daily treatment costs of EUR0.20, rather than EUR4 (and daily treatment costs of EUR0.15) under the previous provisions. Additionally, from 1 June the price of generics above which the rules will apply under the new provisions is EUR3, rather than a price of EUR1 envisaged to apply from 1 July under the previous provisions. The maximum price reduction for generics also becomes 10%, rather than 15% under the previous provisions. This maximum reduction will not apply, however, if the price of the generic – after the price calculation – is higher than the reference originator; in these cases, the price of the generic will need to be reduced to a maximum of 65% of the price of the originator.
Resulting price cuts expected to be insufficient to meet savings targets
The price cuts introduced with the amendment are not expected to achieve the desired reduction in pharmaceutical reimbursement expenditure, Greek healthcare news source healthmag reports. This source reports that there is evidence an increased volume of new innovative medicines is likely to bring additional spending three times higher than savings from the price cuts. According to the source, data from QuintilesIMS for the first half of 2016 show that, while price cuts yielded savings of EUR45 million, spending rose EUR180 million from the substitution of medicines with new products. As the source reports, this follows the same pattern seen in 2015 on the Greek market.
According to data from the Greek National Organisation for Medicines (EOF), quoted by healthmag, the proportion of the Greek pharmaceutical market (outpatient sector) accounted for by originator medicines – both on-patent and off-patent – in value terms stands at 78%, with generics at 19%, and "uncategorised" products at about 3%. Although generics have posted a strong increase in sales value, the source states, they are far from the 40% of the market envisaged under Greece's bailout package for the beginning of 2017.
Outlook and implications
Following widespread media reports on possible measures to be included in the new pricing provisions, such as a stipulation that new innovative medicines could only be given a price (and therefore be eligible for reimbursement) in Greece if they were present on 14 EU markets and had positive HTA evaluations from seven HTA authorities, the actual changes (which can be accessed in full in Greek here) are relatively unremarkable. For producers of originator medicines, it may be considered favourable that such strict conditions for market access have not been introduced. On the other hand, the strong likelihood (bordering on certainty) that the changes will not yield enough savings to meaningfully reduce drug reimbursement spending, and thereby clawback payments, is certainly unfavourable.