The World Bank has urged the authorities in Bosnia and Herzegovina to implement regulations on the pricing of medicines that were initially approved more than three years ago, but have not been subsequently implemented. The World Bank has made the provision of financial aid for the country's healthcare sector dependent on the implementation of the regulations.
IHS Life Sciences perspective | |
Implications | Under the proposed regulations, prices of medicines in Bosnia and Herzegovina would be set with reference to prices in Slovenia, Croatia, and Serbia. In Croatia and Serbia in particular, there has been very intensive regulation of drug prices in recent years, and if the regulations were to come into force in Bosnia and Herzegovina, they would certainly result in a reduction in prices. |
Outlook | There is an atmosphere of suspicion and accusation around the issue of the long delay in the implementation of the regulations, and it is difficult to predict whether the country's government would yield to the World Bank's pleas and expedite implementation. However, the need for financial support for the country's healthcare system may prove to be decisive. |
The World Bank has urged the authorities in Bosnia and Herzegovina to fully implement regulations on the pricing of medicines and control over these prices, the implementation of which has been stalled for over three years, reports the news website of the Bosnian broadcaster RTV BN, taking as its ultimate source the Bosnian newspaper Nezavisne Novine. According to the source, the World Bank has made the full implementation of these regulations the condition of granting loans to the country's healthcare sector. However, according to what the source describes as "unofficial information", the implementation of the pricing regulations is strongly opposed by what it calls a "pharmaceutical lobby". The entry into force of these regulations would, the source states, result in a reduction of drug prices of around 20%.
According to Nataša Grubiša, the director of the Agency for Medicinal Products and Medical Devices of Bosnia and Herzegovina (ALMBiH), Bosnia and Herzegovina is the only country in Southeastern Europe where there is no control over medicine prices. Grubiša is reported by the source as saying that the ALMBiH will send a new version of the ordinance on the regulation of drug pricing to the Council of Ministers in the coming week that envisages the setting of prices in the country based on the prices of three reference countries, Slovenia, Croatia, and Serbia. RTV BN states that this will not necessarily mean that prices in Bosnia and Herzegovina will be the same as those in these three countries, because the flat-rate VAT applied in Bosnia and Herzegovina of 17% is much higher than the VAT applied on medicines in the three countries mentioned.
According to the ALMBiH, as reported by the source, the ordinance on drug-pricing regulations was adopted by the Council of Ministers in 2011, but was not implemented, and, in the subsequent years, the agency has submitted proposals on two occasions to the Council of Ministers to implement the regulations, but so far these have not had any effect. The source reports that based on "informal conversations", the groups that benefit from the failure to implement the regulations are pharmaceutical companies and firms involved in the import of medicines into the country. RTV BN states that of the BAM531 million (USD289.7 million) that the pharmaceutical market in Bosnia and Herzegovina was worth in 2014, non-domestic medicines accounted for BAM436 million.
RTV BN reports that no comments were forthcoming from the country's Ministry of Civil Affairs, adding that Adil Osmanovic, the minister of civil affairs, had stated in May that the ministry would insist that the matter of the regulations on drug pricing was dealt with by the Council of Ministers and that the regulations would be adopted finally, because the failure to implement them meant that the citizens of Bosnia and Herzegovina would continue to pay high prices for medicines compared with those in surrounding countries.
Outlook and implications
The adoption of these regulations has been the major issue in the pharmaceutical market of Bosnia and Herzegovina in recent years, alongside the implementation of a federal reimbursement list, including drugs that the various cantons of the federation are supposed to make available. Both issues are critical in terms of access to medicines in the country, but just as not every canton has made all the drugs on the federal list available to its inhabitants, so also the regulations on the pricing of medicines have not been implemented. This is despite a number of assurances that its implementation is imminent (see Bosnia and Herzegovina: 4 June 2015: Bosnian government set to adopt new regulations to reduce drug prices after three years' delay).
It is difficult to interpret or verify information that is described as "unofficial" or "informal", even though it comes from a fairly respected newspaper in Nezavisne Novine. Nevertheless, the fact that the pharmaceutical industry is even implicated in this way in the "blocking" of the introduction of these regulations is damaging.
Regulations on drug pricing introduced in Serbia in the past couple of years have resulted in considerable reductions in prices in that country, and prices of drugs in Croatia have also been heavily regulated in recent years. It is clear that the implementation of the long-delayed regulations in Bosnia and Herzegovina would result in a reduction in drug prices in the country, which would lead to lower profitability for pharmaceutical companies and the firms involved in the import of medicines.
The saga of these pricing regulations in Bosnia and Herzegovina shows, more than anything, how difficult it is to have effective and dynamic government in a country that is split into three entities, with one of those entities – the federation – split into 10 cantons. This model of government means that implementing regulations and legislation in general is more laborious and fraught with complication than in other countries. The healthcare sector in Bosnia and Herzegovina needs financial support, and it remains to be seen whether the country's government would expedite the drug-pricing regulations in order to obtain this support from the World Bank.