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Same-Day Analysis

Colombian law recognises health as human right bringing price and healthcare plan reforms, but creates financial stability concerns

Published: 17 February 2015

The Colombian government has approved a healthcare law that recognises for the first time the right to health as a fundamental human right.



IHS Life Sciences perspective

 

Significance

Colombian president Juan Santos has signed a law that enforces medicine price controls and modernisation of the compulsory healthcare plan.

Implications

The four main pillars are: unification, extension and modernisation of the compulsory health plan; ratification of the international reference price system; and ending the so-called "walk of death", and doctors' financial freedoms.

Outlook

The implementation of the healthcare law raises some concerns, particularly in terms of the financial stability of the healthcare system, with the changes likely to generate large additional costs that will place most of the healthcare expenses on the Colombian state.

Colombian president Juan Santos signed yesterday (16 February) the healthcare statutory law that introduces key reforms to the country's health system. The law outlines the "regulation of the fundamental right to healthcare and other related topics".

This law was introduced by the government of Santos and gained 209 Senate supporting votes and 267 in the Chamber of Representatives in the final debates. Colombia's Constitutional Court subsequently declared the initiative constitutional in June 2014, which is an essential requirement for any statutory law bill before the President's final approval in the Colombian legal system.

Key reforms

The main aim of this law is to recognise for the first time in Colombia health as a fundamental human right. Aiming to make this recognition a reality, the new regulation introduces four important pillars:

  • Unification, extension, and modernisation of the compulsory healthcare plan (POS): The Colombian government has ratified its commitment to the incorporation of innovative medicines in the POS. Before the new regulation, patients were entitled only to what was included in the POS, under the new law they are entitled to all the medicines that have achieved marketing authorisation except those that will be expressly excluded from the mandatory plan.
  • Ratification of the international reference price system as a national healthcare policy to control medicine prices in Colombia.
  • The creation of a regulatory agency to control the Health Care Providers (EPSs) with the aim of ending the so-called "walk of death" as the EPS must provide health services to all the patients, even when they are not affiliated with a health programme or record some debt with the National Health System.
  • Doctors freedom: Under this pillar, doctors are free to prescribe the medicines needed by the patient, disregarding EPS budget constraints.

Outlook and implications

The presidential approval of the healthcare statutory law is not a surprise as Santo's government has always shown support for healthcare reform that provides the legal framework to reform key features of the health system. However, for the pharmaceutical industry, this regulation could generate positive and negative effects.

The new statutory healthcare law aims to guarantee health as a constitutional and fundamental human right. To achieve this, the regulation aims to increase the coverage, modernisation, and the unification of the benefits of the POS for the two Colombian healthcare regimes (subsidised and contributory), which initially is a positive step for the pharma industry as it is likely that new medicines will be added to the compulsory plan.

On the other hand, there are medicine price controls that are now are part of the main healthcare policies. This means that the strict controls on medicine prices that the Ministry of Health (MoH) has implemented since 2013, when the international reference price system was introduced, are likely to continue. Indeed, this week the National Commission for the Pricing of Drugs and Medical Devices (NCPDMD) extended the reference-price system to medical devices, setting up a mixed system of direct control and regulated freedom, and the MoH announced a new round of medicine price controls that include the addition of more than 200 innovative medicines to the IRP system (see Colombia: 16 February 2015: Colombia's MoH extends reference-pricing to medical devices, creating mixed system of direct control and regulated freedom and Colombia: 31 March 2014: Colombian government imposes price controls on additional 285 medicines).

Considering the right to health as a fundamental human right is not just a figurative declaration, and has deep implications in the political and constitutional systems in as "tutelas", a legal tool reserved only for fundamental rights, will be established as the primary mechanism for a patient to demand the right to health. However, in the past decade, there has been serious over use of this legal mechanism for access to high-cost medicines that are not part of the POS due to their high price, with patients using tutelas to gain reimbursement, putting the Colombian healthcare system at financial risk (see Colombia: 2 June 2014: Colombia's highest court declares healthcare bill constitutional).

Looking forward, the implementation of the healthcare statutory law raises some concerns, particularly in terms of the financial stability of the healthcare system. Adding innovative medicines to the POS and allowing patients access to high-cost medicine through tutelas is likely to generate large additional costs that will place most of the healthcare expenses on the Colombian state.

Additionally, some critics have claimed that the new law fails to fix one of the main overarching issues facing the Colombian healthcare system: the role of the healthcare provider entities, or EPSs, which are intermediary institutions responsible for administering public healthcare funding. The role of EPSs has come under increased scrutiny as they have been involved in several investigations and legal cases for irregularities in providing services, double charging for drugs already included in the POS, and alleged collusion (see Colombia: 27 November 2014: Colombian government buys debt to prevent hospital bankruptcies and Colombia: 15 December 2014: Colombian parliament approves healthcare reform bill in first reading).

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