Proposed law would require all drug industry players to contribute more to health fund

All makers, importers and sellers of drugs would have to pay back a percentage of the subsidized part of drugs into the National Health Fund (OEP), under proposed legislation published on Friday. The proposed legislation would require drugmakers and drug importers to pay 14% of the subsidized part of drugs which carry a fixed subsidy and 16% of the subsidized part of drugs which carry a proportional subsidy. Drugmakers or importers selling a product at a price lower than the one at which the respective fixed-rate subsidy is based for at least for three years will be exempt from the 14% payment. Additionally, the legislation would make drugmakers and drug importers contribute to covering any overshoot of the drug subsidy fund of more than 10%, taking into account the effect of inflation. Their contribution would increase progressively as the overshoot grows. The OEP paid out Ft 256.83 billion on drug subsidies in January-August this year, and could pay out around Ft 400 billion by the end of the year according to the Health Ministry's preliminary estimate, well over the pro rata target considering the annual target of Ft 298 billion. Under an earlier agreement with the government, drugmakers and drug importers contributed Ft 22.5 billion to cover the overshoot.

In 2005, the fund paid out Ft 348.9 billion for drug subsidies, also more than planned and drugmakers and drug importers contributed Ft 20 billion to cover part of the overshoot. Wholesale drug sellers would have to pay 0.5% of the wholesale price margin on their yearly subsidized drug sales. The legislation also includes support measures for smaller pharmacies in villages and towns paid for by larger pharmacies. Revenue for these subsidies will come from levying a special contribution of 0.5% of annual pharmacy price margins over Ft 30 million a year, 1% of the part of the price margin between Ft 50 million and Ft 75 million a year, and 2% of margins over Ft 75 million. Pharmacies in the latter two categories will also have to pay an annual fee of Ft 250,000 and Ft 500,000, respectively, on top of the contribution. Under the proposed law, no drug would be entirely subsidized with the exception of those prescribed for the poor and chronically ill. The minimum price prescription drugs would be offered at would be Ft 300. Poor households, however, would be offered compensation, in line with EU practice. The law would grant the government the right to freeze drug prices for two years in order to resolve temporary disturbances on the market. It would also allow the over-the-counter sale of some drugs such as aspirin and ibuprofen, as well as vitamins. (Mti-Eco)