The public stance of Tchaikapharma High Quality Medicines regarding the reimbursement and pharmaceutical policy, effective since 2004

June 10, 2010

In Bulgaria the first steps to implementation of an effective reimbursement policy were taken in 2004 with the adoption of the Regulation on the Terms, Conditions and Procedures for Contracting Pharmaceuticals, Medical Devices and Diet Foods, Fully or Partially Reimbursed by the National Health Insurance Fund. That was the first time that contract conditions had incorporated the principle of INN reference reimbursement calculated on the basis of similar reference prices in eight EU member states.

Despite its promising start, the Regulation failed to reduce pharmaceutical spending, improve therapy efficiency, or increase affordability. No price caps were introduced for different therapeutical groups. The national fund refused to control prices for consumers, it only controlled reimbursement. As a consequence, patients’ private costs for pharmaceuticals were increasing annually and Bulgaria became the EU country with the lowest public costs for pharmaceuticals.

Other important flaws of reimbursement concern the absence of therapeutic goals with focus on chronic diseases and of incentives for the use of generic pharmaceuticals. Only a few of the many shortcomings were corrected when the Positive Drug List Regulation was adopted in 2007. It stipulated limit prices for the generic pharmaceuticals and provided criteria for delisting in case of changes to the efficiency and safety data.

The feeble Positive Drug List Regulation, however, had a major shortcoming. It is in the fact that the reference for each product is the product itself and not similar products of other manufacturers. So the reference is realized at trademark level and not INN level.

This reference system effectively caters to the interests of the pharmaceutical giants and may reasonably be called the “Raynov Patent” (Emil Raynov is former Director of the National Health Insurance Fund and former Deputy Minister of Health). The constantly growing public and individual pharmaceutical costs are more than expected, the fiasco is obvious. In 2008 the spending of the National Health Insurance Fund amounted to BGN 295 million, while in 2009 it was as much as BGN 400 million. What is more, the country also had the highest personal pharmaceutical costs – an average of 60%.

The following objectives have to be high-priority in NHIF’s pharmaceutical and reimbursement policy:
– Improved access to pharmaceuticals, especially for the socially significant chronic diseases. This would improve long-term control and postpone or even prevent a large number of hospitalizations. Therefore, these diseases should be treated with completely or at least 90 % reimbursable therapies.
– Encouraging the use of generics. This could reduce pharmaceutical spending by more than 30%.

We should not underestimate the powerful influence exerted on prescribing physicians by the pharmaceutical manufacturers’ medical representatives in favor certain medicines. This magnifies the negative effect both on the quality and on the access to therapies. Public and private costs increase too.

The National Health Insurance Fund is unable to curb this influence, so patient control over the prices of pharmaceutical therapies should be encouraged. This could be achieved if reimbursement values are defined for the full cycle necessary to treat a diagnosis or a combination of such and not for the pharmaceutical. Practically, this would mean determining of reference prices for therapies at the disease level (ICD) and not at the therapy level (ATC). For each disease at ICD level there shall be at least one option for a 100% reimbursable therapy.

The therapy-based reimbursement system has a number of advantages:
– Reduced pharmaceutical prices lead to reduced personal, and not public, costs. It is the exact opposite of the reference-price-based reimbursement and would have a significant social effect.
– Pharmaceutical costs could be easily forecasted as they would depend only on the number of diagnosed patients and not on the choices of the prescribing physicians
– Much more simplified control over the prescription, dispensing and reimbursement of pharmaceuticals and much lower related costs

The control over the prescription and use of pharmaceuticals may be strengthened even further if patients exercise financial control over doctors and pharmacists. This would be possible if there is to be a transition from a reimbursement system to a refunding system.