Greek Drug-Price Reduction Progresses As Electronic Prescription System Starts to Yield Results

The new Official List of Medicines that entered into force on Monday (6 September) includes a total of 7,154 products (both originator and generic drugs), of which 3,373 have undergone price reductions, 2,658 have undergone price increases (up to a predefined ceiling of 10%), and 799 have not seen any price revision, reports Greek newspaper Ta Nea. The full official list of drug-price changes on the website of the Greek General Secretariat of Commerce can be accessed here. In the case of a number of the drugs that have undergone price revisions, some problems presented themselves, which will need further clarification. Pharmaceutical producers are currently able to voice any concerns regarding the price changes, which are due to be discussed at a meeting of the drug pricing committee on 22 September, with the revised price of any drugs that are subject to further discussion due to be established and brought into effect no later than 27 September. The source reports that in the case of 95% of the 300 top-selling drugs on the Greek market, accounting for almost 65% of pharmaceutical expenditure, the repricing process has resulted in price reductions averaging over 20%. It is estimated that the implementation of the new prices will result in savings to Greek insurers of around 1.2 billion euro (US$1.52 billion).

To recall, the prices are based on a newly introduced international price-referencing system, under which drug prices in Greece are set with reference to the average price in the three markets of the European Union (EU) that have competent authorities producing pricing data where the price of the given drug is lowest. Additionally, the Greek government has capped price increases at 10%; otherwise, reports Ta Nea, there would have been price rises of considerably more than 10%. Equally, limits to price reductions have been imposed, although in the case of the most expensive drugs, no limits are imposed (see Greece: 3 September 2010: New Greek Price Bulletin Shows Weighted Average Price Cuts of 20% for over 4,000 Drugs).

Examples of price reductions for various presentations of very high-profile drugs include the Swiss firm Roche's oncology drug MabThera (rituximab), which has undergone a price reduction of 45.09%; German company Boehringer Ingelheim's thrombin inhibitor Pradaxa (dabigatran etexilate), which has been subject to a price drop of 43.63%; and U.S. firm Pfizer's anti-cholesterol drug Lipitor (atorvastatin), which has had its price cut by 16.5%.

Generics Favoured by Pricing Changes

It is reported by Ta Nea that the changes will favour Greek drug producers, as the new pricing schedule will have the effect of reducing public pharmaceutical expenditure, and will boost generic substitution. As Greek drug producers are predominantly focused on the production of generics, it is argued that it will favour them.

IKA Reduces Pharmaceutical Expenditure

Meanwhile, Greece's largest social-security organisation, the IKA, reduced its pharmaceutical spending in July by 55 million euro, reports Greek medical news provider Iatrikostypos. In particular, it is emphasised that the electronic prescription system is helping to reduce costs, and that there are now accurate data available concerning the total value and volume of prescriptions, and the percentage change compared with the previous year. Additionally, data are also available on the percentage of value and volume of prescriptions for originator and generic products.

Outlook and Implications

There have been a number of reports concerning the number of new drugs on the price bulletin, although this is probably related to the fact that the contents of the bulletin changed a number of times prior to its final version being made public on 6 September. The price reductions and increases introduced under the new price bulletin are imposed on the price of drugs prior to the blanket drug-price reductions introduced in May. It will be interesting to see whether the negotiations with pharma companies that have taken issue with the price changes proposed will be resolved during the next session of the Greek drug-pricing committee (see Greece: 31 August 2010: Several Pharma Companies Oppose Some of Prices Proposed in Greek Drug-Price Overhaul). Although the Greek authorities appear to be emphasising the trouble-free passage of the new drug-price bulletins, there are likely to be some concerns among pharmaceutical companies; if price increases are being capped at 10% but there are no restrictions to price decreases (for products more expensive than 50 euro per unit), this could be seen as quite an unfair policy.