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New Greek health minister faces important challenges in drug P&R policy

21 July 2014 Brendan Melck

Greece's new health minister, Makis Voridis, inherits the same overriding issue in the area of pharmaceutical policy as his predecessor - fulfilling the requirements of the troika to keep public drug spending in the community-pharmacy sector to around EUR2 billion in 2014.

In the recent cabinet reshuffle, the often controversial Adonis Georgiadis stepped down from the position of health minister, having overseen the introduction of the drug pricing amendment in December 2013, which introduced international reference pricing for off-patent and generic medicines.

The amendment's other main feature - financial limits on the prescribing of individual public-sector doctors - was suspended three months after implementation, following a decision by the Council of State. Many doctors and patients complained about the added difficulty of obtaining medicines caused by these limits. However, Georgiadis pushed through the reinstatement of these limits in May, following the introduction of many exceptions to the rule.

The effect of the pricing amendment has been to increase co-payments on many off-patent originators and generics. Reference prices have fallen significantly and patients left to make up the difference between these and the retail prices in pharmacies. Greek medical news source Iatropedia has reported that some producers have threatened to withdraw products as a result of this situation.

Austerity toned down?
Iatropedia has reported (on the basis of what it describes as reliable information) that Voridis is planning to soften the pricing amendment. It will have less of an impact on the prices of off-patent originators and would also mean less of a price gap between the originator and the first-to-market generic (the maximum price of the generic to be 80% of the originator's price rather than 65% as today). However, it should be pointed out here that Georgiadis, just before leaving his post, prepared a new set of drug pricing provisions which include blanket cuts on top of the IRP-based price for the ex-manufacturer price of medicines according to their distribution channel.

Clawback fears
There is concern from the pharmaceutical industry that it is not really possible to estimate--with accuracy--how much will be needed to pay for the estimated more than 2 million Greeks not covered by state health insurance. This is in the context of the requirement of pharmaceutical producers to pay clawback to the Greek authorities for reimbursement spending above the budget. If the budget is too low, and spending on the uninsured exceeds estimates, pharmaceutical companies could be faced with rapidly increasing clawback payments. Health View also reports that, according to a report from the general accounting office of the Ministry of Finance, the pharmaceutical industry will help to cover the cost through discounts and rebates (including, presumably, clawback).

New provisions for financial prescription limits reignites controversy
A series of new provisions relating to the aforementioned financial prescription limits were implemented at beginning of July. As opposed to the original system, under which doctors were obliged to keep within 80% of the total value of their prescriptions from 2013 (with some therapeutic areas exempted), these new provisions establish percentages of prescriptions of medicines in pharmacological subgroups (ATC level 4) which need to be for active pharmaceutical ingredients without patent protection.

As well as limits being set on the basis of pharmacological subgroups, there are also limits set on a per-patient basis for particular therapeutic areas, and also on the basis of specific geographical regions. There are certain therapeutic areas excluded from financial limits, including cancer, cystic fibrosis and end-stage heart disease. The full list can be accessed at the website of the Medical Association of Thessaloniki, in Greek.

There has already been a substantial negative backlash against these new provisions. The Association of Hellenic Pharmaceutical Companies (SFEE) is reported to have appealed to the Supreme Administrative Court against them, and the Athens Medical Association has promised to fight them to the end. However, when the financial limits were removed in April, it was reported that the public drug budget target was overshot for that month by EUR21 million, and from the government's perspective, the financial targets simply must be met.

Does the Greek government have a choice?
It could be argued that given the difficulty in changing the habits of Greek doctors and patients to prescribe and purchase generics, the only way to achieve the budget targets is through more coercive measures such as these. Plus, the Greek authorities do not really have time to carry out a really thorough overhaul of their pharmaceutical regulation, which is probably what is really needed. Instead, they need savings, and they need them now.

It remains to be seen whether Makis Voridis will soften the Greek government's approach to pharmaceutical cost-containment slightly with changes to the recently introduced pricing regulations, while the impact on the drug budget of providing reimbursed drugs to the uninsured also remains difficult to predict. However these situations develop, it is pretty much certain that equivalent savings will have to be made somewhere to balance any increased spending - whether this is from clawback payments or the financial restrictions on doctors' prescribing, or another means.

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