Supplemental MoU sets Greek authorities further healthcare cost-containment goals

Greece's lenders within the European Stability Mechanism (ESM) have published a supplemental memorandum of understanding (MoU), a prerequisite for the Greek authorities to obtain the first instalment of the second tranche of the bailout agreed in 2015. The supplemental MoU includes some important new requirements for cost-containment measures in healthcare, as well as requirements for the continuation of existing measures in the field.

Below are listed the most important measures relating to the pharmaceutical industry and the public healthcare sector:

• 'Further structural measures' need to be taken by December 2016 to ensure that the estimated gap between pharmaceutical reimbursement spending for 2017 and the clawback ceiling is brought down by a minimum of 30% compared with 2016 (with the spending target to be reviewed in June and December of 2017). By December 2017, additional structural measures will be taken to ensure that the same gap is at least 30% lower in 2018 than in 2017 (this will also be reviewed).
• The establishment of the negotiating committee responsible for developing price-volume and risk agreements, including managed-entry agreements, in particular for innovative and high-cost drugs, should be completed by June 2016.
• Definite actions should be taken by December 2016 to ensure that the proportion of goods supplied to the healthcare sector by means of centralised procurement is increased to 60%, and likewise by December 2017, to ensure this proportion is increased to 80%. Definitive steps should be taken by December 2016 to ensure that the proportion of medicines procured by hospitals by active substance is increased to two-thirds, and by three-quarters by December 2017.
• In connection with the above, a list of items that must be procured by means of centralised procurement must be agreed by June 2016, and the authorities must establish the requirement for hospitals to obtain them through centralised procurement through a circular by September 2016.
• A health technology assessment (HTA) agency must be set up to determine which products should be included in the reimbursement list, and under which conditions, by December 2017, with progress towards this aim to be monitored every six months, starting from June 2016.
• In order to promote the increased use of generics in Greece, new measures to improve incentives for pharmacists to prescribe them must be adopted, by December 2016, and public campaigns promoting their use are to be run starting in June 2016; the share of inpatient pharmaceuticals accounted for by generics should be increased to 50% by December 2016 and 60% by June 2017 (not specified whether by volume or value), and the share of generics in the outpatient sector should be increased to 40% by volume by March 2017 and 50% by March 2018.
• The Greek National Organisation for Healthcare Provision (EOPYY) must carry out monthly audits of private clinics, starting in December 2016, and develop and assess capacity in the public sector by region and medical speciality by June 2016, using this to commission private providers per region based on public capacity.
• A new system of electronic referrals to secondary care, giving priority to referrals to diagnostics and elective surgery, is to be developed by September 2016, based e-prescription and electronic patient records. In association with this, a system of monitoring of waiting times according to treatment will be developed, with the aim of reducing these.
• By June 2017, a plan for pre-approving referrals to private providers, based on electronic patient records, the electronic referral system, the waiting-times monitoring system, and the mapping of public-sector capacity, will be developed.

Outlook and implications

Producers of generics and originator medicines operating in Greece united in April to warn against the consequences of the government's decision to include pharmaceutical provision for the uninsured within the general outpatient pharmaceutical budget (see Greece: 29 April 2016: Innovative and generic pharma associations in Greece unite against rules on non-insured coverage). Producers have estimated that they will have to pay about one-third of the outpatient reimbursement bill this year. It remains to be seen which measures will be taken in order to ensure that spending is kept down so that the level of clawback payments can also be kept down. The outpatient budget is already significantly lower than it was several years ago, at just under EUR2 billion (USD2.25 billion). In order to ensure that spending is kept within this budget, all the other reforms that the lenders are requiring within the healthcare sector would probably need to be completed and up and running. The sluggishness of the tempo shown by the Greek authorities in implementing measures such as systematic HTA assessments of medicines and the setting up of a negotiating committee for price-volume and risk agreements is one of the major obstacles in the way of achieving the required cost containment.

It is noteworthy that in the supplemental MoU, the targets for generics uptake have been restated as compared with the most recent MoU in connection with last year's bailout. At that point, it was required that the share of generics by volume in the outpatient sector would reach 40% by December 2015 and 60% by December 2016. By the end of 2015, it had only reached 23%. It remains to be seen whether the Greek authorities will implement measures that will bring them closer to achieving these targets. Until now, there has been little evidence to say that this will happen.

The supplemental MoU can be accessed in full, here.