The Bulgarian parliament has voted in favour of legislation which would give the state power to determine the prices of medicines supplied under the country's national health service.

Pricing decisions would be made by a commission consisting of representatives of government departments, medicine regulators, the National Health Insurance Fund and professional associations of doctors and dentists, but not of the unions representing these last two groups. Nor would manufacturers – either of original or generic drugs – have a voice on the commission.

Manufacturers have voiced their disapproval of the decree, particularly objecting to the proposed requirement that the price of a generic drug could be no more than 50% of that of the originator product. Industry spokesmen have suggested that this requirement could fall foul of the competition rules of the European Union - Bulgaria joined in January this year and has harmonised its legislation with EU directives - and they also point out that, as the national reimbursable list will include only the cheapest products from eight European reference countries, state intervention in price setting would not be necessary.

While improvements to Bulgaria’s intellectual property rights legislation led to the country’s removal from the US Trade Representative’s Special 301 Watch List this year, industry groups such as the Pharmaceutical Research and Manufacturers of America (PhRMA) continue to be critical of the procedures used for determining drug pricing and reimbursement levels, which they say are bureaucratic, non-transparent and can be arbitrary.

The Bulgarian drug market has stagnated over the past two years, growing just 1.1% in 2005, but annual average growth of 3%-4% is forecast to 2011, when the market will be worth $1.08 billion, according to Businessmonitor. The market share taken by generics is expected to show fast growth over the period – they currently account for around 30% of the market - due to the government’s cost-cutting measures, as will the stake taken by over-the-counter medicines, which is forecast to rise from 15% in 2006 to 23% in 2011, it says.