SIMILAR ARTICLES

Massive increase in import of electricity, stimulated by government policy: 38% in first five months. Trend continues

Romania imported 38% more electricity in the first five months of this year, compared to the same period of 2018, according to the most recent… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor’s Office, a position for which he was heard on Thursday, 11… Mai mult

Cronicile

Government amends, only 3 months after last change, the method of approving price of medicines. Industry claims 48% of the market is disrupted

de Mariana Bechir , 12.2.2017

The Ministry of Health has launched to public debate a government decision draft to amend the calculation methodology and the endorsement/approval procedure for the maximal prices of medicines.

The draft decision relaunches, on the one hand, the issue of predictability in business: it is issued in less than 3 months after similar changes have been approved by the previous government, based on which the industry has already made its plans for 2017.

On the other hand, according to the industry calculations based on the present version of the draft decision, the impact of price cuts will force nearly 40% of pharmacies to function with zero profit, while 28% of them would be exposed to the risk of defaulting.

Amendments proposed by the new Minister of Health

The draft decision of the Ministry of Health preserves, as stated in explanatory memorandum, “most of the matters covered by Decision 800/2016 of 26 October 2016 (amended in November 2016), but changes some essential aspects:

  • Proposes to limit the price of the innovative medicines for which there is at least one generic medicine available in Romania, to the smallest price from the countries used as benchmark or 65% of the price of the innovative medicine, for the first generic medicine
  • Waives the three-stage process for bringing the price of the innovative medicine to the maximum level of the generic/biosimilar reference price and introduces the one-step process, starting with the correction to take place in 2017.

According to the explanatory memorandum, the methodology for calculating the maximal price of medicines changes because the regulations in force “would increase the price (…) and therefore limit public access to relevant treatments. In this regard, the former procedure for increasing the maximal prices of medicines is repealed.

The Ministry of Health also communicates to the producers of innovative medicines which invest significant amounts in research that, in his opinion, since the expiration of patent and market entry of the generic/biosimilar medicines, the same pricing approach should be applied to the innovative medicines as to the generics.

After the patent expires, a real competition should exist between the innovative and generic/biosimilar medicines, including on their prices; that will be ensured by applying the same calculation method for innovative off-patent medicines as for the generic/biosimilar medicines,” is the wish of the ministry.

The draft decision also provides for the introduction of a Public national catalogue of prices – to comprise the maximal prices of medicines used/sold by healthcare or medicines providers which are not under a contract with the Ministry of Health, national health insurance houses and/or health departments.

According to the explanatory memorandum, the decision to decrease the price of some medicines has no financial impact on the budget, either in the short and long term, as all changes are to be borne by the producer-distributor-retailer chain.

Effects announced by the industry: Government decision would disturb over 48% of the market

The deadline for implementing the future decision is apparently generous: no more than 150 days since the deadline for entry into force of the decision.

The problem is that pharmacies are generally functioning with stocks of medicines covering 2 months and after the entry into force of the decision, the price change (significant, 35%) should be borne by the companies.

In short: if a medicine gets in the stock at a price of 100 lei, for instance, the pharmacy is required to sell it for 65 lei. The economic but inhumane alternative would be that, during the 150 days until the entry into force of the new regulations, the pharmacies to get rid of the stocks (namely, to stop supplying), but such a decision would cause at some point a lack of certain medicines on the market.

According to the latest official statistics available, in Romania, on 31 December 2015, there were 3,445 companies active in the sale of medicines, with 6,365 work sites.

From the industry data, the price cut impact on the profit rate of pharmacies represents 1.33% of their turnover.

Although a small percentage at first glance, it should be seen in the context: from the accounting data provided by the industry, 1,351 companies owning 2,480 work sites, have a maximum profit rate of 1.3% of the turnover. That would mean that 39% of the industry would lose its economic reason of being.

Taking into account the averages stocks for one month, the pharma industry has also calculated the risk of defaulting, based on the accounting details to date: it is about 961 companies with 1,798 work sites, namely 28% of the industry.

There are also companies in both situations: decrease of profit rate and significant impact on stocks. Summary in the table below:

*

  • Total number of pharmacies at 31 December 2015 – 6,365 work sites
  • Pharmacies with profit rate <= 1.3%
  • Pharmacies that could not pay due amounts to suppliers
  • In both situations above
  • Total number of pharmacies affected by the price cut

*

The conclusion that the industry points out: One single governmental decision puts 48% of the market at risk.

Mergeți în homepage ›

Publicat la data de 12.2.2017

Lăsați un comentariu


NEWS

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult

Romania loses competition for a seat at UN Security Council. MAE Excuse: Campaign started too late

Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult

"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning

Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult

Mugur Isarescu: We should make a film for Viasat History about treasure in Moscow

A book should be written or a movie should be made and sent to Viasat History about a treasure evacuated to Moscow, as it is… Mai mult

Rhythm of commercial vehicle registration increases 3 times faster in Romania than EU average

Today, the European Automobile Manufacturers Association (ACEA) announced the status of commercial vehicle registrations in EU member states + EFTA in April and cumulated after… Mai mult