After the US FDA revoked its emergency use authorization for hydroxychloroquine/chloroquine, Gilead Sciences (US)'s… https://t.co/Fh762DWhkJ
Greek pharma industry unites against growing burden of clawback
In a show of solidarity for the pharmaceutical industry in Greece, both the associations of originator (multinational) and generic (domestic) medicines producers - respectively the Hellenic Association of Pharmaceutical Companies (SFEE) and the Panhellenic Association of Pharmaceutical Industries (PEF) -came out in late April with a joint statement warning of the impact of the inclusion of the costs of pharmaceutical reimbursement for uninsured people in the overall pharmaceutical reimbursement budget. This followed the implementation of a joint ministerial decision earlier in the month giving uninsured people equal access to state-funded healthcare.
Number of uninsured increases due to economic crisis and arrival of migrants
Greece's economic crisis has left many Greeks unemployed and unable to pay social security contributions. Add to this the large numbers of migrants arriving into Greece and the potential for major additional costs for the Greek public health system through allowing the uninsured equal access is clear. Against this background, the government's decision to include the costs of pharmaceutical reimbursement for uninsured people in the budget for outpatient reimbursement is alarming for pharmaceutical companies, who must cover any spending above the set budget in the form of clawback. And, in recent years, as the amount assigned to the reimbursement budget has fallen, so the amount paid by producers in clawback has risen: the reimbursement budget fell from EUR5.11 billion 2009 to EUR2.00 billion in 2015, while clawback payments - introduced in 2011 - rose from EUR78 million in 2012 to EUR204 million in 2014.
Pharma companies expected to cover one-third of outpatient reimbursement costs in 2016
The SFEE and the PEF stated that in 2016, one-third of the costs of drugs reimbursed by the social security funds (SSFs) is expected to be covered by pharmaceutical companies in the form of rebates or clawback. The statement pointed to the overspending compared with the set budget seen in the first two months of 2016, amounting to EUR70 million. The associations described spending on reimbursement as "out of control".
Generics policy fails to achieve aims
Failure of generics policy is certainly one reason why Greece cannot control drug spending. Greece's lending institutions have set ambitious targets for the development of the generics market in the country that are not even close to being achieved.
Theodore Tryfon the president of the PEF, told IHS Life Sciences that the focus on price reductions for generics over the past few years had hardly done anything to help boost generics' market share - "Despite the fact that the generics prices have been decreased by 60% on average from 2009 to 2015, generics use is still at very low levels - from 17% on 2009 to 23% on 2015 - the lowest in EU (in volume terms)."
According to Theodore Tryfon, the existing rules for setting the initial prices of generics in Greece - a maximum of 65% of the price of the off-patent medicine, which in turn is subject to a 50% price reduction after patent expiry if there is a generic equivalent available on the market - mean that real savings cannot be made from generics in Greece. This means that the maximum generics price is 32.5% of the originator price just before patent expiry, but if clawback and rebates are included, it comes to just 25%, on average.
"It is unsustainable, and results both in producers opting to refrain from putting new generics on to the market - creating losses for the SSFs - and forcing the old generics to exit the market."
Focus on price cuts must end, says PEF president, as withdrawals continue
Generics are subject to additional price reductions on the basis of a dynamic-pricing system, based on their volume of sales. A legal amendment implemented in April was designed to ensure the continued presence of many older generics on the Greek market - after the lenders demanded that protections for these products' prices be lifted in last year's MoU - with the introduction of a 15% maximum threshold for price reductions for generics during the bi-annual re-pricing procedure. The very fact that such a measure has to be taken clearly illustrates the problem.
Tryfon sees the absence of a coherent pharmaceutical policy as the core of the problem.
"The main problem with the Greek market is the inability to control volume, in general, and the unnecessary over-consumption of new medicines which are automatically reimbursed by the SSFs."
No systematic HTA process is applied to new medicines coming on to the market in Greece, although there is a commitment to implement systematic HTA evaluations under the latest bailout MoU. Only a structural overhaul of the system is going to solve the problem, according to Tryfon:
"We believe that the issue of market sustainability and cost containment in the case of Greece is related with demand-side measures, such as consumption control, prescribing protocols, and control over the unnecessary switch to new medicines -rather than pricing; unfortunately, despite five years of harsh measures in the pharmaceutical sector, little has been done towards the direction of original structural reforms."
A familiar problem in Greece today: trying to implement reforms which are difficult enough to implement in normal circumstances, at a time of crisis - not only the crisis of the Greek economy, but also the migrant crisis. Although the Greek authorities are receiving aid to help provide the basics for the large numbers of migrants arriving on their shores, it is far from sufficient. The healthcare system is currently struggling to cover the additional health costs which result from the need to provide medicinal products to migrants efficiently. Although many pharmaceutical companies have joined efforts to provide medicinal products to migrants, the vast amounts that are needed cannot be covered. Without a combined approach from the EU, the situation is unlikely to improve significantly.
Brendan Melck is a life sciences analyst for IHS
Published 10 June 2016
- Vaccine nationalism versus co-operation: Global challenges during the COVID-19 pandemic
- The case of remdesivir: How do you calculate the cost of a pandemic drug?
- COVID-19 treatments: No magic bullet
- The race intensifies for a COVID-19 vaccine as hope builds for emergency approval by September
- Is the US ready to start relaxing COVID-19 lockdowns?
- COVID-19 could cause delays for price framework agreements in parts of Europe
- US scrambles for resources in COVID-19 response
- COVID-19: Risk of severe complications among the United States health workforce
Generating an effective vaccine with any long-term effect has initiated a diverse selection of vaccine projects- wh… https://t.co/7f0HYLEY6P