EKIP– Expert Club for Economics and Politics A Different Opinion
Author: Kaloyan Staykov
В средата на август правителството публикува за обществено обсъждане претоплени предложения за реформа в лекарствената политика, като фокусът е подобряване на достъпа до лекарствени продукти в страната. Проблемът с достъпа възниква основно по две причини:
- parallel exports[1] – it is envisaged to create a restrictive list of medicines whose export may be restricted in the event of a shortage on the local market; and
- withdrawal of medications from the Bulgarian market, the sale of which is not profitable.
As we wrote at the end of last year, these "reasons" are actually direct consequences of the regulatory policy to reduce the costs of medicines of the NHIF, namely:
- Price regulation based on the lowest reference price[2] in another 17 Member States;
- a mandatory discount of 10% of the price of generic and patent-protected medicines, which are paid by the NHIF;
- price corridors[3] in the production of medicines financed by the NHIF, and a health technology assessment, which assesses whether it is cost-effective for the health fund to pay for a particular drug therapy.
The end result of this policy is higher spending by the NHIF and limited access to pharmaceuticals. This is not surprising, because the measures are aimed at the consequences of the problem, not at the problem itself. And that is that incomes in the country are still low, as the cherished convergence to the average European level is moving too slowly. For example, GDP per capita in purchasing power standards in Bulgaria was 41% of the EU average in 2007 and 48% in 2016. It is true that this period covers the economic crisis of 2009 and the slow recovery after that, but in the same period, GDP per capita in Romania increased from 43% (i.e. close to that in Bulgaria) to 59%. In other words, while for us the crisis is an excuse, for other countries it is an opportunity.
Since incomes are not growing fast enough, including due to the almost total abandonment of reforms in recent years, the easy solution is to reduce prices, which is characteristic not only of the pharmaceutical sector, but also of the prices of electricity, heating, etc. Low prices lead to financial difficulties for companies in the relevant sector, and from there - a rethinking of the supply of medicines and/or their parallel export to countries with higher prices. Here follows another easy solution - instead of overcoming the root cause, a decision is made to limit parallel export. In other words, drug policy becomes another tool in the arsenal of social policy - since incomes are low, this allows restrictions to be introduced in the name of consumers.
Okay, but at best these restrictions are temporary, and at worst they lead to limited access to medicines, which is not in anyone's interest. Instead, the government should focus on creating conditions for a faster increase in incomes and stop distorting the market. Of course, this is not a short process and temporary measures are needed to support vulnerable groups in society that may be negatively affected by market developments. However, this is not the job of state institutions in the health sector, but is part of the government's social policy. In other words, state institutions that implement social policy should identify these vulnerable groups, assess the need for social assistance and its financial parameters, and develop a mechanism for granting these benefits so that they reach those most in need.
Otherwise, thanks to the wrong regulatory policy, it is quite natural that in the conditions of a single European market and free movement of goods on the local market, a shortage of medicines is formed. It is absurd for state policy to be aimed primarily at maintaining low prices, which has proven harmful both for the economy as a whole and for the consumers themselves. There are plenty of examples both historically and from other sectors where a similar approach is applied. Limiting natural processes is like damming rivers - sooner or later the river finds a way to bypass the barriers or fertile lands turn into deserts.
[1] Export from an EU Member State with low prices of medicines to one with higher prices [2] National Council on Prices and Reimbursement of Medicinal Products -http://ncpr.bg/bg/%D1%80%D0%B5%D1%84%D0%B5%D1%80%D0%B5%D0%BD%D1%82%D0%BD%D0%B8-%D0%B4%D1%8A%D1%80%D0%B6%D0%B0%D0%B2%D0%B8[3] The measure was introduced briefly in late 2015, after which its operation was frozen. In December 2016, an analysis of the effects of the measure was completed by the Ministry of Health, which showed that a large part of the existing medicinal products on the local market "will not be able to meet the requirements and will be withdrawn from it. This in turn may lead to the compromise of the treatment that has been started or to its discontinuation". For these reasons, the Ministry abandoned it.
Original publication in IME.
