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Gov't talks with drug makers on subsidy spending cut to close on Tuesday

Talks with pharmaceutical manufacturers and distributors are due to be closed on Tuesday regarding the government's proposed reduction of pharmaceutical subsidies contained in the government's restructuring plan dubbed Széll Kálmán plan, the business dailies Világgazdaság and Napi Gazdaság said on Tuesday.

A plan to introduce a centrally regulated price has been rejected, Napi Gazdaság reported, adding that the government plans to make a decision on the final version of the package next week.

Világgazdaság said the subsidies on cholesterol-lowering will be reduced, the list of the medicines that eligible patients can receive free of charge will be shortened, the cheapest options of medicines will be preferred/subsidized, and the effectiveness of tumor therapies will be checked in the new subsidy system due to come into effect from July. Instead of brand names, doctors will be ordering active ingredients, according to the new government proposal.

Világgazdaság said the document it obtained envisages savings of HUF 26.3 billion this year, which is no novelty: It is new, however, that the special tax paid by drugs manufacturers on their subsidized drug turnover is to be raised from 12% to 20% instead of 18% as proposed earlier.

Napi Gazdaság has learnt that legislators consider it important that new entrants on the market for generic products should constitute real savings, and would therefore stipulate that any new entrants can only enter at 5% below the reference price.

The aim is to approach prices to the lowest (reference price) level, however, this could create a difficult situation for pharmacies. The loss on the margin could reach HUF 3 billion annually based on the average retail margin, Napi Gazdaság said.

Deputy chairman of the Hungarian Chamber of Pharmacists Zoltan Hanko told Tuesday's issue of daily Magyar Hírlap that although he agrees with the idea that the government debt must be reduced and if extra profit is generated from services subsidized from public funds, that must be stopped, but he considers it wrong to further cut the funding of the already underfunded health sector. He said some pharmacies could face a disastrous situation as a result of the cut in medicine prices subsidies.