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Drug makers could be served bitter pill

The government’s cost-cutting measures are likely to reach the Hungarian drug subsidy system as well. Although the full savings package will be presented only in February, Economy Minister György Matolcsy has already revealed some details. As he said, the drug subsidy budget could be slashed by 30% through some “structural reforms,” translating to HUF 100 billion in savings for the sate.

Such a significant cost-cutting exercise can hardly be introduced without stepping on some toes.

On the one hand, the cost-saving measures could take the form of lower subsidies for certain drugs, which would result in price increases for patients.

On the other hand, the possibility remains of imposing some kind of crisis tax on the pharmaceutical sector, too. However, Hungary’s largest drug manufacturer Richter Gedeon said that it already does its share in state financing through, for example, taxes on the sales of subsidized drugs and charges for registering new products.

According to analysts at IHS Global Insight, any extra levy or other additional fiscal burden on Hungary’s pharmaceutical companies would have very negative effects on the companies’ R&D activity. Also, some Hungarian experts warn that such measures would make several pharma companies simply leave the country. (Ágnes Vinkovits)