Medical supplies to Czech hospitals to be stopped after call to reveal drug prices in tenders

The Czech Republic has become the center-ground for another battle over transparency of confidential pharmaceutical prices after health minister Adam Vojtěch last month ordered state hospitals to reveal the prices that they paid for medicines in tenders. Local media reported that net prices from tenders have indeed started to seep into the public domain after the minister stated that hospitals should comply with all appropriate legislation in providing the information on prices, despite the fact that these are covered by confidentiality agreements. In response, a branch of French pharma major Sanofi stated that the company would have to consider ceasing supplies if the hospital continues to disclose unit prices of Sanofi products.

The source cited examples of the discounts provided to Czech state hospitals in tenders showed that manufacturers are offering discounts on some products that reduce the ultimate price to less than a third of the list price. There is concern that some essential medicines could be temporarily unavailable in Czech state hospitals if the dispute is not resolved quickly, and this involves mainly medicines still under patent protection. Jakub Dvořáček, the head of the Association of Innovative Pharmaceutical Industry (AIFP), is quoted as saying that producers are willing to provide details of discounted tender prices directly to the minister, although they do not want them published in the register of contracts.

The danger of an impasse and a temporary interruption in the supply of essential, new-generation medicines to Czech state hospitals is very real. For some producers represented by the AIFP, the risk of these prices being revealed is too great in terms of the effect that this would have on larger, economically wealthier markets, such as Germany, as a result of international reference pricing. The Ministry of Health and the pharmaceutical companies are in negotiations, and have stated that they hope to reach a compromise by the end of October. Although confidential discounts are certainly an imperfect system, and lead to discrepancies in the amounts paid by different purchasers, the Czech authorities may soon find out that this imperfect system is nevertheless better than the alternatives.

IHS Markit has recently launched its new competitive tendering tool, ProcureIntel. Demos are available so you can see what the Czech market looks like.

Posted 17 October 2018 by Brendan Melck, Analyst