The Greek Ministry of Health has introduced a new emergency levy of 15%, which is to be charged retrospectively on the sales of pharmaceutical products in 2011, while deliberations over drug shortages continue.
IHS Global Insight perspective | |
Significance | A new emergency levy of 15% has been announced by the Greek Ministry of Health for pharmaceutical marketing authorisation holders, which is set to be charged retrospectively on the sales of products in 2011, while deliberations continue over drug shortages. |
Implications | Considering the perilous financial situation of the National Organisation for Healthcare Provision, it is not really a surprise that such a new measure has been announced. |
Outlook | Pharmaceutical companies are naturally opposed to the new levy, and it remains to be seen how the reaction to it will evolve, considering the more conciliatory tone adopted by the European Federation of Pharmaceutical Industries and Associations to the situation in Greece recently. Collaboration between various groups in Greece on drug shortages is a positive development for patients, although the extent of the problem is likely to be much greater than is being suggested. |
New emergency levy on pharmaceutical companies
The Greek Ministry of Health (MoH) has added an emergency measure to the many regulatory changes that the pharmaceutical industry has been hit with in Greece in recent weeks and months. Law 4052/2012, which concerns the implementation of the Memorandum of Understanding with the troika, foresees that starting from the beginning of 2013, an emergency levy will be introduced for all pharmaceutical products on the positive reimbursement list, so that every marketing authorisation holder (MAH) of reimbursed products will be required to pay a sum equivalent to 15% of the retail sales of each product in 2011 if they want to retain the reimbursement status of that product. If the MAH refuses to pay, then the product in question will be put onto the negative reimbursement list. According to the translation of the legislative document published by the Association of Hellenic Pharmaceutical Companies (SFEE) on its website, the funds should be paid into an account designated by the National Organisation for Healthcare Provision (EOPYY). The full document of the SFEE's translation can be accessed here.
Clawback offset option
The emergency measure also leaves open the possibility for MAHs to offset the amount owed under the new 15% levy against the amount which they have to pay under the clawback regulation for 2012, and if the amount payable under the 15% levy is higher than that payable under clawback, the remaining amount can be set off against clawback for 2013, or the rebate on medicines on the positive list, which is provided for under law 4052/2012. Furthermore, the transfer from the positive to the negative list will not occur in the case of MAHs which have already paid or offset their clawback from 2012 (under law 4052/2012 and 4093/2012).
Details of clawback payments
The SFEE document also includes the legal regulations relating to clawback payments. On the basis of these, monthly expenditure by social insurance agencies (FKA) on pharmaceutical reimbursement cannot be higher than 1/12 of the allocated annual budget, and any monthly excess must be reclaimed by the FKAs from the MAHs of the drugs concerned. The amount payable by each MAH is calculated every six months, and is due to be paid within a month. The method of calculating the clawback payments is also given.
MoH and EOF collaborate on drug shortages
Meanwhile, shortages of medicines remain a major issue, with the deputy health minister Marios Salmas reported as having discussed the issue with the head of Greece's National Organisation for Medicines (EOF), Ioannis Tountas. According to the press release from the Greek MoH, there are around 30 pharmaceutical products which are in short supply, but they do not result in a significant therapeutic gap, since there are other medicines in the same group that are available. Reportedly, the EOF is keeping a close watch on the sales of pharmaceuticals and parallel exports, with the aim of imposing sanctions on companies in the event of supplies of certain drugs running out, on the basis of the legal requirement of pharmaceutical companies to inform the EOF within three months of any reduction in the availability of a drug. The threat of a temporary ban on parallel exports is reiterated. Additionally, at the meeting, it was decided that the PFS, an association representing Greek pharmacists, will update the EOF on a daily basis regarding shortages, and the EOF will inform doctors and patients regarding potential alternative treatments.
Outlook and implications
The fact that the Greek MoH has introduced an additional financial levy on pharmaceutical companies – in the light of the perilous financial state of the EOPYY – is hardly a surprise. It comes at a time when the multinational pharmaceutical industry has started to engage with Greece in terms of offering to help with efforts to cap pharmaceutical spending, with certain conditions, relating to unpaid historical debts (see Germany - Greece: 5 November 2012: Pharma majors offer to cap Greek drug reimbursement costs as Merck opts to halt Erbitux supplies to Greek hospitals). However, unsurprisingly too, there has been a strong negative reaction to this new levy. It remains to be seen how compliant producers will be, having recently been hit with the introduction of prescription by international non-proprietary name, amid a slew of other pricing and reimbursement measures.
With regard to drug shortages, the MoH is likely to be portraying the situation in a positive light, and the reality is likely to be that there are more than 30 products in short supply, and not all of them have alternatives which are available on the Greek market. However, the fact that the three organisations – the PFS, the EOF and the MoH are working together on at least maintaining a clear flow of information regarding which medicines are in short supply and their possible replacements is a positive step. With many pharmaceutical companies reducing their engagement in Greece, and the low price of drugs on the Greek market creating ideal conditions for parallel export, there have been serious shortages of some medicines in the past months and years – and the European Commission has not always viewed the EOF's efforts to prevent parallel exports favourably (see Greece: 24 October 2012: Work continues on corrections to Greek price bulletin as EOF calls for temporary halt on parallel exports).