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Drugmakers sue Czech govt over pricing, insurance moves

World News | January 12, 2011


Lynne Taylor

Drugmakers sue Czech govt over pricing, insurance moves

Some 11 drugmakers have filed suit against the Czech Republic’s Health Ministry over the setting of maximum prices for their products, and as many as 20 more companies may follow suit.

The companies’ lawsuits also challenge the amounts which the State Institute of Drug Control (SUKL) has stipulated that health insurers should pay for their products. It has been estimated that, if 20 drugmakers won their case in court against current coverage levels, the cost to insurers would be as much as 2 billion koruna (105.4 million), but the daily newspaper Lidove Noviny reports that the real aim of the industry actions is reform of the way insurance coverage levels are calculated.

The current system is too complex and unpredictable for manufacturers, doctors, pharmacists and patients alike, according to spokespeople for the companies, which include leading local generics maker Zentiva, part of the Sanofi-aventis group.

The newspaper also says the firms have been encouraged to bring their actions by the successful challenge brought last year by Abbott Laboratories against the amount set by SUKL for insurers to pay for its antihypertensive Tarka (trandolapril/verapamil).

Meantime, Czech Health Minister Leos Heger has announced plans to restrict the introduction of, and access to, expensive new medicines on the domestic market.

Faced with a threatened exodus of thousands of doctors in protest at their levels of pay, Mr Heger has unveiled a programme of healthcare reform, a central measure of which would be the imposition of severe cutbacks on funding for expensive new medicines, with the money saved being used to increase doctors’ salaries, reports the Czech online news service Aktualne.

The reform plans also envisage the introduction of “standard” and “above-standard” treatment provision by the national health service, which would permit patients to pay more to receive “above-standard” treatment.

Other elements of the proposed reforms include reductions to the maximum prices for reimbursed drugs and a 7% price cut for medicines which have not yet undergone a price review by SUKL. There will also be new measures to speed the introduction onto the market of generic drugs, which already account for around a third of the Czech pharmaceutical market in terms of value and a little over half by volume.

If Mr Heger’s proposed reforms are to succeed, health insurance must be brought under government control, says Aktualne. Currently, insurers are able to choose which hospitals they do business with, and they give preference to those with specialised centres for the treatment for cancer, for example. These hospitals receive funding for the most advanced medicines and equipment, and their spending in these areas has been rising by high double-digit percentages annually in recent years, while for other hospitals it has been flat or falling.

The report quotes one expert as estimating that the centres’ spending on drugs during 2010 increased 75%-100% over 2009’s level; in the first half of last year alone they had already spent 3.8 billion koruna more on drugs than they did in first-half 2009, he says.

Commenting on the proposed reforms, analysts at IHS Global Insight say that Mr Heger’s statements indicate that the Republic’s boom in expenditure on high-cost drugs, with particular focus on oncology treatments, could be coming to an end. Moreover, while the provisions aimed at easing the introduction of generics onto the market could be beneficial for generics producers, planned price cuts will balance out these advantages, they add.

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