Bulgarian NZOK's Draft 2011 Budget Envisages Real Spending Increase of 4%

The Bulgarian government has prepared the draft budget of the country's National Health Insurance Fund (NZOK) for 2011, as well as some amendments to the budget for 2010, reports Bulgarian health news provider Zdrave.net. In the draft budget for next year, an overall increase in healthcare expenditure is expected, from 1.909 billion leva (US$1.390 billion), to 2.633 billion leva. Within this, expenditure on the reimbursement of pharmaceuticals is due to rise from 347 million leva to 391 million leva. A slight increase in revenues from health-insurance contributions for 2011 is expected, from 1.60 billion leva to 1.66 billion leva, while the amount that the Bulgarian Ministry of Health (MoH) will transfer to the NZOK to cover citizens is due to remain at the same level in 2011 as in 2010, at 941.126 million leva.

Rise in Pharmaceutical Spending to Boost Orphan Drug Reimbursement...

The increase in expenditure on pharmaceutical reimbursement is reported to be in order to increase reimbursement of orphan drugs, immunosuppressors for patients who have undergone transplantation, and hormone-maintenance therapy for oncology patients. IHS Global Insight's preliminary analysis suggests that this is connected with the transfer of the responsibilities for reimbursing orphan drugs, expensive oncology drugs, and certain other expensive medicines from the MoH to the NZOK.

…But Spending on Orphan Drugs to Be Capped

However, it is also reported that under the draft budget, spending on orphan drugs cannot exceed 10% of the overall pharmaceutical budget. In practice, this will mean that spending on orphan drugs in 2011 will be capped at around 39.1 million leva.

Budget "Novelties"

According to Zdrave.net, some 100 million leva of the draft 2011 budget will be used to pay off outstanding debts from 2010, while some 340 million leva of the prospective health-insurance contributions budgeted in 2011 is due to be used by the MoH to cover the costs of pharmaceuticals, operations, and medical devices. This is reported by Zdrave.net to be the first time in which a draft NZOK budget has included such payments. Thus, according to Bulgarian newspaper Dnevnik, when these sums are taken away from the purported increase in healthcare spending on Bulgarian citizens, which according to the figures appears to be as high as 37.9% year-on-year, the actual increase is only 4%. This has attracted criticism from, among others, the Bulgarian Doctors' Union, whose secretary Dimiter Lenkov is quoted by Zdrave.net making a very critical statement regarding the use of these 340 million leva of health-insurance contributions to cover payments by the MoH.

Additionally, the reserve of the NZOK is being increased by 10%, from the current 5% of the revenue collected from health-insurance contributions, to be used in case of any exceptional deviations from spending plans, or regional imbalances in medical care provision.

Outlook and Implications

The predictions made for revenue from health-insurance contributions in 2011 are seen as fairly hopeful in terms of Bulgaria's economic situation, and naturally are dependent on the employment and general economic situation in the country improving slightly. Although this is possible, it is by no means a certainty. Therefore, there is a threat to the increase in budget from this angle.

The transfer of responsibility for paying for orphan drugs, expensive oncology drugs, and other expensive drugs from the MoH to the NZOK appears to be the main cause of the increase in the drug budget. The NZOK will be keen to maintain control over spending on orphan drugs, hence the imposition of a limit on expenditure on them as a proportion of the overall drug budget. However, as the draft budget implies, once orphan drug expenditure reaches the limit of 10% of overall pharmaceutical expenditure, no further spending on these drugs will be sanctioned, the consequences of which are easy to imagine.

Additionally, the decision to increase the NZOK's reserve to 10% of all health-insurance contributions is likely to mean that pharmaceutical reimbursement could be fairly circumspect in the early months of the year as the fund endeavours to maintain this goal.