Poland - Has the economic crisis affected the Polish pharmaceutical market?

Changes have been made to the reimbursement list due to the economic crisis but the pharmaceutical market will continue to grow.

Whilst many countries have entered recession as a result of the economic crises, Poland’s economy did not shrink in 2009. In fact, it was the only economy in the EU that avoided contraction. Consequently, the impact on the Polish pharmaceutical market will be far less than in other countries of similar development in Central & Eastern Europe, such as Hungary. There will be less of a need to reduce spending on healthcare and the disposable income available for purchasing pharmaceuticals should remain steady, although unemployment is predicted to rise marginally in 2010, which may be detrimental to retail sales.

However, recent changes to the drug reimbursement list do reflect the government’s cost-containment policy that was prompted by the economic downturn. Only two new innovative drugs have been placed on the list, although innovative drugs that had previously been approved for reimbursement were not removed. Over 100 generic drugs were added to the lists, but around 50 were removed. Along with the many medicine price decreases that the MoH has negotiated with several pharmaceutical companies, overall savings are expected to reach 45 million zlotys (US$15.2 million).

Further reading - A detailed analysis of the Polish pharmaceutical market is available from Espicom: The Pharmaceutical Market: Poland (published May 2010)

Denmark - How is the Danish government attempting to reduce healthcare expenditure?

The government is increasing efficiency within the healthcare system, while pharmaceutical prices have been subject to price freezes and caps.

The Danish government is seeking to minimise costs across the healthcare system. The largely successful attempt to convert inpatient operations to outpatient ones has saved both time and money, and is one way in which the Danish hospital service is becoming more efficient. In addition, the local government reform has placed a greater emphasis on the responsibility of the municipalities to provide rehabilitation and nursing home care. This is reinforced by the recent announcement that the Health Minister may raise hospital charges for those patients who are in hospital unnecessarily, and could have been discharged with other appropriate care, to encourage the municipalities to work to get patients discharged from hospital faster. Also, the municipalities are in charge of health promotion and preventative care, and their contribution to the cost of healthcare provides an incentive to do this effectively. The strong growth in hospital prescribing suggests an increase in new therapies being utilised there, while the modest growth in the primary sector is indicative of a steady consumption of pharmaceuticals in general.

Meanwhile, the increasing pharmaceutical expenditure has led to price freezes and caps in recent years. A price ceiling, which has fixed pharmaceutical prices at the level they were in 2006, has been extended to remain in place until the end of 2011. This extension is a sign of the government’s determination to keep the price of pharmaceuticals down, and so this form of price restriction is likely to continue beyond 2011. However, despite the positive results from cost containment measures, efforts to reduce the cost of pharmaceuticals have proved unsuccessful. The savings made have been more than counterbalanced by the wider use of new and expensive pharmaceuticals, which are required to ensure the most effective treatment. This is especially true in areas such as hypertension, high cholesterol and so on, where many new therapies have become available recently.

Further reading - An in-depth analysis of the Danish pharmaceutical market is available from Espicom: The Pharmaceutical Market: Denmark (published April 2010)

Finland - How is the Finnish government attempting to contain the rising costs of pharmaceuticals?

A reference price system has been introduced in an effort to reduce the use of more expensive pharmaceuticals.

Several cost-containment measures have been implemented in the past few years. Generic substitution was first implemented in April 2003 and has generated considerable cost savings since then. In January 2006, the government followed the example of other EU member states, and for the first time statutorily cut the approved wholesale prices for all reimbursable pharmaceuticals by 5%.

The most recent measure is the introduction of a reference price system for medicines, which came into force in April 2009. The new system is expected to reduce the use of more expensive pharmaceutical products, thus lowering the costs for patients and reducing the pressure to raise health insurance payments. A recent study has estimated that the reference price system will reduce the costs of medicines in Finland by 10%, while total pharmaceutical expenditure is also expected to fall by 5%. However, the effect of the reference price system on medicinal costs may be less significant than would normally be expected due to the strong price reductions resulting from generic substitution.

Also in April 2009, generic substitution was extended to include medicinal products protected by analogy process patents, which were previously excluded. This will result in further cost savings, but patented original products are entering the generic price competition phase several years before product patents expire in other European countries.

Further reading - A detailed analysis of the Finnish pharmaceutical market is available from Espicom: The Pharmaceutical Market: Finland (published April 2010)

Greece - How will the current economic environment in Greece affect the market?

Strict austerity measures have been introduced to reduce the government deficit, which will lead to reductions in public healthcare spending.

The Greek Prime Minister, George Papandreou, has announced strict austerity measures to reduce the government deficit, facing considerable pressure from international markets and the European Commission. These will lead to a reduction in public spending, which could affect healthcare expenditure. Coupled with an increase in the use of cost containment measures, healthcare spending is likely to remain at relatively the same level over the coming years.

This is despite the fact that large investments have been put into healthcare in recent years, although the sustainability of these was always questionable, with public hospitals running at ever-greater levels of debt and late payments to suppliers becoming more of a problem. For example, hospital debt towards pharmaceutical companies has become a major problem for the industry. It is estimated that the Greek authorities owe nearly 7.0 billion euros (US$10.0 billion) in outstanding hospital debts, and a number of pharmaceutical companies have begun legal action against Greek hospitals that have failed to meet payments on debts on drugs and medical products. The pharmaceutical industry has also sought to persuade the European Commission to pursue a legal ruling that Greece has violated a European Union directive and broken late payment rules by not reimbursing pharmaceutical debts.

However, the ageing population will ensure a need for pharmaceuticals, and there will be a continuing demand for new therapies so that patients can be treated more effectively. A reduction in funding from the public sector could also be counterbalanced by an increase in the involvement of the private sector.

Further reading - A detailed analysis of the Greek pharmaceutical market is available from Espicom: The Pharmaceutical Market: Greece (published April 2010)

Morocco - Why is the Moroccan Ministry of Health keen to cut drug prices and encourage drug promotion?

Moroccan drug prices are too high and cost-containment measures are needed following the extension of the compulsory health system.

Following the publication of a Parliamentary report in November 2009, which found that drug prices were too high in Morocco, even in comparison to Tunisia, the government has launched a new regulation to bring pharmaceutical prices down and encourage generics consumption. The new system limits the number of generic medicaments to 14, by International Common Denomination (ICD) and only one generic per manufacturer. One of the main measures is that the new pricing system introduces international benchmarking criteria. Another measure is the regular review of pharmaceutical prices. Contrary to the actual system, pharmaceutical prices will no longer be fixed.

The national health insurance scheme is expected to provide substantial additional funding for the health sector. Initially aimed at salaried workers, the scheme has been expanded to cover the self-employed. The CNSS, which operates the scheme in the private sector, has announced that it will be extending cover to ambulatory care in addition to hospital treatment from February 2010 onwards. A health insurance scheme for those on very low incomes is still in the early stages of implementation and is expected to be rolled out on a national basis in 2010. Full implementation of the national health insurance will require cost-containment measures due to increasing reimbursement levels.

Further reading - A detailed analysis of the Moroccan pharmaceutical market is available from Espicom: The Pharmaceutical Market: Morocco (published April 2010)

Spain - How is the current economic environment affecting pharmaceutical sales?

The pharmaceutical industry is expected to overcome the economic crisis in 2011.

Spain is the fifth largest economy in the European Union. However, the economic downturn has affected the country seriously. It is one of largest developed economies expected to experience a negative growth in 2010. The Economist Intelligence Unit (EIU) projects that the GDP will contract by 0.8% in 2010 and is only expected to experience modest real growth from 2011 onwards.

FARMAINDUSTRIA believes that more new pharmaceutical medicines will be entering the Spanish pharmaceutical market in the coming years, together with biologic medicines. The pharmaceutical industry expects to overcome the economic crisis in 2010, but this might be delayed until 2011 considering the current economic outlook.

The pharmacy sector is expected to increase at a lower rate than the hospital sector, but cost-containment policies will affect both sectors. By 2015, the Spanish pharmaceutical market could rank fourth in Western Europe, ahead of the UK. Almirall and Esteve are the best positioned local companies.

Further reading - A detailed review of the Spanish pharmaceutical market is available from Espicom: The Pharmaceutical Market: Spain (published April 2010)

Cost-containment measures restricting pharmaceutical market growth

Cost-containment policies continue to affect underdeveloped, emerging and mature pharmaceutical markets. In Asia Pacific, for example, the Philippines is expected to announce a second drug-price list in mid February. This would be the second time it has happened in less than one year. Hospital drug price negotiations in Taiwan are increasing drug access but, as a result, some problems have arisen in the pharmaceutical supply chain.

Eastern European pharmaceutical markets are not immune to cost-containment policies. Drug companies in Russia have been forbidden from raising the prices of essential medicines. There are concerns whether this move could make the production of some medicines loss-making. Meanwhile, pharmaceutical producers have delayed their rebates in Romania, a small but growing pharmaceutical market.

In the more mature Western European pharmaceutical markets, pricing & reimbursement policies are generalised, with recent cuts seen in Ireland and Germany. Hospital drug debt levels, particularly common in more Southern European pharmaceutical markets, can also impact pharmaceutical producers. Following the pledge by the European Union to support Greece economically, it remains to be seen how Greek authorities plan to pay off their outstanding hospital drug debts.

Further reading - In-depth reports on the pharmaceutical markets in these countries, including detailed information on pricing & reimbursement, are available from Espicom: Philippines, Taiwan, Russia, Romania, Ireland, Germany and Greece.