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Same-Day Analysis

Romania's clawback system set to be transformed with introduction of cost-volume, cost-volume-outcome agreements

Published: 14 October 2014

The Romanian Ministry of Health has put a draft emergency ordinance out to public consultation that would amend the clawback system so that new drugs being approved for reimbursement would be subject to cost-volume and cost-volume-outcome agreements.



IHS Life Sciences perspective

 

Significance

The Romanian Ministry of Health (MoH) has put out to public consultation a draft emergency ordinance modifying the 2011 ordinance on the clawback system to subject new drugs obtaining reimbursement to cost-volume or cost-volume-outcome agreements.

Implications

Drugs currently subject to clawback arrangements would not be affected. The Romanian generics association has responded particularly critically, since no provision is made to differentiate originators from generics in the draft ordinance.

Outlook

Until the methodology of the cost-volume or cost-volume-outcome contracts, and the negotiations on them, have been revealed by the MoH, it is difficult to assess what changes they will bring compared with the current clawback system. However, it is likely that individual negotiations will allow for greater differentiation and potentially a better situation for some pharmaceutical companies at least.

The Romanian Ministry of Health (MoH) has published a draft emergency ordinance that would change the emergency ordinance from 2011 that launched the clawback system, which has become an increasingly controversial aspect of the country's pharmaceutical legislation in the last couple of years, particularly for producers of generics. Under the planned changes, which are currently out to public consultation until 17 October, marketing authorisation holders (MAHs) or their legal representatives will be required to pay quarterly contributions based on cost-volume or cost-volume-outcome contracts for reimbursed medicines, treatments used within the social health insurance system, and drugs included in national health programmes. The draft emergency ordinance can be accessed in full here, in Romanian.

No changes for drugs currently subject to clawback payments

Under the draft ordinance, in the case of drugs for which clawback is currently due, the current conditions and level of contribution are set to remain the same. The draft ordinance gives a formula by which the clawback under the new system is to be calculated, under which the quarterly approved budget for the particular drug is subtracted from the quarterly value of the consumption of a particular drug, with the resulting figure divided by the quarterly approved budget and multiplied by 100. The quarterly approved budget for a particular drug excludes VAT, and applies when this budget is RON1.515 million (USD436,019) or over.

Commission to be appointed to negotiate contracts

The cost-volume contracts are due to be negotiated by a commission consisting of representatives appointed by the MoH, the Budget Ministry, the National Agency for Fiscal Administration, the Agency for Medicines and Medical Devices (ANMDM), and the National Health Insurance House. Hospitals and pharmacies will be required to supply data on the turnover of the drugs involved in the cost-volume or cost-volume-outcome contracts. The minister of health and the president of the CNAS will define the methodology of the contracts and the negotiation process.

APMGR head criticises plans

Dragos Damian, the president of the Romanian Association for Generic Medicine Producers (APMGR), is reported by Romanian newspaper Romania Libera as saying that generics producers will be subject to these agreements in the same way as producers of originators. This is despite the fact that, for more than a year, the generics industry in the country has been appealing for a differentiated model of clawback between generic medicines and originators. Damian has reportedly argued that in countries with traditions of cost-volume and cost-volume-outcome agreements, these tend to be subject to separate budgets. He said such agreements in Romania are to remain part of the quarterly budget that is subject to clawback, emphasising that the quarterly budget has remained at around RON1.5 billion since 2011.

Outlook and implications

The Romanian MoH emphasises that the draft emergency ordinance has been devised with reference to the recent implementation of new regulations on the inclusion of medicines into the Romanian reimbursement system. Until the methodology for the contracts and the details of the negotiations are revealed, it is not possible to assess how these factors are interrelated. It is possible to predict, however, that there will be a greater emphasis on health technology assessment (HTA) and that they will be part of the long-awaited update to the Romanian reimbursement list, following recent statements from the head of the ANMDM (see Romania: 9 October 2014: Long-awaited update to Romania's reimbursement list set to disappoint).

Equally, it is challenging to assess how the impact of these agreements would differ from that of the current clawback system. It is likely, however, that some improvements can be expected, since negotiations with individual MAHs or their representatives would probably allow for greater differentiation based on particular requirements, rather than a "one size fits all" clawback system under which all producers have to pay a proportion of their quarterly revenues from the sales of reimbursed drugs back into the system.

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