The troika is set to focus in 2014 on measures to liberalise the pharmacy market and the sale of OTCs, while the Greek Ministry of Health is determined to see all public hospitals achieve a minimum of 60% generics' usage next year.
IHS Global Insight perspective
The liberalisation of the pharmacy sector and the supply of OTCs in Greece is set to be a major focus for the troika in 2014, while the Greek Ministry of Health sets its sights on compelling public hospitals to reach a target of 60% generics' use.
The troika has largely achieved its aims in the pharmaceutical pricing and reimbursement policy area this year and is therefore turning to the pharmacy and OTC sectors, where its requirements have been resisted. For the MoH, raising the use of generics in hospitals is unlikely to present the kind of challenges as has been posed in the outpatient sector.
Pharmacists are already considering some kind of action in protest against the troika's demands and the Greek authorities will probably struggle to reconcile the wishes of the troika with those of Greek pharmacists – therefore, a disruption of the pharmaceutical industry is almost inevitable. With public hospitals' budgets considerably reduced in 2014, they are expected to seek to procure cheaper generics from multinational and non-European Union producers, despite the lack of support for generics (particularly non-Greek generics) in Greece.
Troika to seek greater pharmacy liberalisation
Sources in the Greek Ministry of Health (MoH) have stated that, in 2014, the troika (the three creditor institutions in Greece's bailout programme – the European Central Bank, the European Commission, and the International Monetary Fund) – is going to be focused on realising the liberalisation of the Greek pharmacy sector, reports Greek medical news provider Health View. The troika reportedly does not believe that competition is working in the sector and plans to pressure the Greek government to make changes.
Among the reforms that the troika is keen to see, according to the source, are the complete liberalisation of pharmacies' opening hours and the sale of over-the-counter (OTC) drugs (making them available in non-pharmacy retail outlets, including supermarkets), a reduction in pharmacists' margins, and changes to the regulations determining how many citizens per pharmacy outlet are permitted. Health View reports that, at this stage, the Greek MoH appears to be maintaining its stance on the side of Greek pharmacists against the demands of the troika, although the former are reportedly considering some kind of action against the prospective changes that the latter will seek to push through.
MoH may support sale of more OTCs outside pharmacies
According to Greek news provider KoolNews, the troika believes that Greece has far too many pharmacies and therefore considers it appropriate to impose regulations on the population-based allocation of pharmacies, which will likely reduce the number in the country by approximately half. The source reports that the MoH, while maintaining its tough position against the troika's demands for this sector, is prepared to consider allowing some OTC products to be made available outside pharmacies.
MoH set to impose target of 60% generics usage in hospitals
At the same time, an MoH directive to public hospitals calls for the attainment of a 60% coverage of drug supplies with generics in 2014, reports Greek news source newsbomb.gr. According to the source, the attainment of this objective will be one of the criteria against which hospital administrators will be assessed, and they may be dismissed if they fail to fulfil it. The directive states that because the hospital budget set for 2014 only covers approximately six months (in terms of present expenditure), public hospitals are likely to scramble to procure cheap, imported medicines.
At present, generics penetration in the Greek hospital sector stands at approximately 50%, reports newsbomb.gr, with some hospitals achieving higher levels and some lower. However, there have already been examples of multinational generics producers failing to supply some drugs, the source reports, citing a case of an unnamed company that had been given a contract to supply antiemetic drugs that it was unable to fulfil, leaving thousands of cancer patients without essential treatments.
Generics target easier to implement in hospital sector
The source also notes that it is considerably easier to ensure a greater degree of generics penetration in the hospital sector than in the outpatient sector. In the latter sector, despite the introduction of prescription by international non-proprietary name and the implementation of a system that requires patients to pay higher co-payments in order to receive more expensive branded drugs, patients have tended to stay with drugs they are familiar with rather than switching to cheaper generics.
Outlook and implications
The troika has been pushing for greater liberalisation in the pharmacy sector in Greece throughout this year, with a particular focus on the availability of OTCs in non-pharmacy retail outlets. The Greek government has hitherto resisted substantial changes in this area, possibly because of worries about their impact on pharmacists, who have been adversely affected by payment delays and other crisis-related problems. However, with the major troika-driven legislation passed last month concerning the regulation of pharmaceutical pricing and reimbursement, the troika is likely to be even more determined now to achieve its goals in the pharmacy/OTC sector (see Greece: 11 December 2013: Greek drug pricing amendment expected to make over USD600 mil. in annual savings and Greece: 12 December 2013: Greek P&R amendment to introduce limits on prescribing, stricter monitoring of drug expenditure). This is likely to mean more disruptive industrial action from pharmacists, with predictably negative consequences for the entire pharmaceutical industry.
Increasing the use of generics in hospitals will not present the same kind of complications as elevating their adoption in the outpatient (community pharmacy) setting, although the mistrust of generics and the opposition to the influx of non-European (and specifically non-Greek) generics is unlikely to fade (see Greece: 29 November 2013: Political fallout from approval of controversial drug pricing amendment continues in Greece). However, with Greek hospitals facing substantial budget cuts in 2014, they have very little alternative but to turn to cheaper generics produced by multinationals or producers from low-cost production countries outside the European Union.