Hungary's national health insurance fund, the OEP, is reported to be running out of funds in its drug budget, threatening shortages of medicines to patients, while the head of the association of innovative pharmaceutical companies in Hungary has hit back at the government's drug policy.
IHS Global Insight Perspective | |
Significance | There are reports that the drug budget of Hungary's National Health Insurance Fund Administration is close to running out, threatening a serious problem for many patients in obtaining medicines, while the head of the country's innovative pharmaceutical association has issued strong criticisms of the government's drug policy. |
Implications | The many measures intended to curb and contain pharmaceutical reimbursement expenditure taken by the government in the past year or so do not appear to be hitting their savings targets. |
Outlook | It is not surprising that the very large cut in the drug budget is proving to be unworkable, and it appears that the revolution the Hungarian government is planning in the provision of pharmaceuticals within the public healthcare sector is going to take some time longer than the government had hoped. |
OEP Calls for Boost to 2012 Drug Budget, 80% Spent by August
Hungary's National Health Insurance Fund Administration (OEP) has asked for its pharmaceutical budget for 2012 to be increased, reports Hungarian newspaper Népszabadság. According to the source, an additional 70 billion forint (USD316.39 million) is needed in order to avoid a financial crash in the state pharmaceutical care system, while the OEP only has HUF41 billion in its reserves.
Népszabadság reports that the government's austerity measures relating to pharmaceutical expenditure—part of the wider austerity drive known as the Széll Kálmán Plan—are not working, and that the OEP had spent 80% of the officially allocated 2012 drug budget by the beginning of August, in spite of the fact that pharmaceutical companies have already paid much increased contributions to the healthcare system (referring to the increased fees for the registration of pharmaceutical representatives and the increase in the pharmaceutical levy from 12% of revenues on reimbursed drugs to 20%, which both came into effect in 2011). Reportedly, the budget could run out in September at this rate.
As the source reports, there have been many warnings from experts that the very substantial cuts in the drug budget would not be possible without some considerable damage to patient care. Among the negative effects on patients of the measures introduced recently, the source reports, many have been required to change treatments and are now only able to obtain 30 days' supply of reimbursed medicines from pharmacies.
New Innovative Drugs Wait for Reimbursement Decisions
Additionally, it is reported that until the healthcare budget is sufficiently stabilised, there is little chance of new, modern pharmaceutical products being placed on the market or on the reimbursement list; the source reports that there are around 25 innovative medicines currently waiting for reimbursement decisions.
As the source reports, the group in the most grave potential danger is the 100,000 or so patients who have very serious illnesses, for whom as much as HUF140 billion of the drug reimbursement budget is required. For example, around 44 individuals requiring enzyme-substitution therapy need HUF3.7 billion per year to pay for their medicines, and without reimbursement, they would have no hope of obtaining them.
IGYE Head Criticises Hungarian Government's Drug Policy
Meanwhile, Hungarian newspaper Napi Gazdaság reports the comments of György Leitner, the head of the Hungarian Association of Innovative Pharmaceutical Manufacturers (IGYE), strongly criticising the Hungarian government's policies towards the pharmaceutical industry. Leitner is reported as saying that the pharmaceutical industry pays a great deal in excess of the amount paid by other industries in the form of extra levies to the Hungarian authorities, and is reported as questioning whether the Hungarian authorities are treating the pharmaceutical industry fairly, considering the fact that—as he states—the entire revenue of the pharmaceutical industry in Hungary is lower than that of the largest supermarket chain in the country.
According to Leitner, reported by Napi Gazdaság, the pharmaceutical industry is unfairly seen as an industry that is out to make extra profits, while the reality is that in recent years, pharmaceutical producers have been required to carry out a far broader gamut of activities around the development and production of medicines, including consultation on clinical effectiveness and the continuous post-marketing monitoring of medicines to ensure they are effective, as promoted.
Leitner is also reported as criticising the Hungarian government's record on financing innovation, stating that not only is Hungary behind major economic powers such as Japan and the United States, but also regional neighbours such as the Czech Republic and Slovenia.
Outlook and Implications
There have been warnings that the measures included in the first Széll Kálmán Plan from 2011 and those in the second, put together in 2012, would not succeed in bringing drug reimbursement spending down by the extent the Hungarian authorities were hoping, particularly considering the fact that in the second plan, the already very large spending cuts planned for 2012—of HUF83 billion—were supplemented with extra planned savings. As it seems to have shown, the planned savings were unachievable.
The many piecemeal measures introduced in 2012 are particularly aimed at reducing expenditure on high-cost innovative medicines, including the very restrictive regulations introduced on which patients are eligible for full reimbursement of modern insulin products, the transfer of high-cost medicines to hospitals so that their use can be more effectively monitored and controlled, and the introduction of biosimilars into the reimbursement system (see Hungary: 24 April 2012: Many Drug Cost-Containment Measures Included in New Major Deficit Reduction Plan in Hungary and Hungary: 8 June 2012: Details Revealed of Hungary's Results-Based Reimbursement System for Type 2 Diabetics). It has not been possible to bring about the revolution the Hungarian authorities want to see within the time period they would like, however. Thus, the situation remains uncertain and there will doubtless need to be some intervention by the government to avoid a serious crisis in the public healthcare sector.
Meanwhile, the comments of the head of the IGYE are understandable under the circumstances, considering the large amount of money pharmaceutical companies are obliged to pay to the Hungarian authorities in order to place their products in the country's reimbursement system, as well as the many pricing and reimbursement regulations introduced in the past year or so that are having such a detrimental effect on the industry. There is little chance of the government's stance changing in the near future, however.