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Hungary expects drug prices to fall 5% from next month - extended

Hungary's government expects the price of drugs to decline by an average 5% from next month, Hungary's health minister said.

The government may save as much as Ft 20 billion ($103 million) in subsidies if all doctors and patients switch to the cheaper medicines, Health Minister Lajos Molnár said in a press conference in Budapest today. Hungary passed legislation it calls the „drug thrift” law as part of an effort to tame the European Union's widest budget deficit. It requires companies to submit new drug prices every three months and sets the lowest bid for each therapy as a benchmark for subsidies. „The age of the back-room deals known as drug peace is over,” Molnár said. „The benefits of competition and of doing things publicly are already obvious. There hasn't been an example of such a large price reduction for such a wide range of products for decades.” The bidding will cut prices on more than 1,000 products by an average 16%, which the ministry says may save consumers as much as Ft 10 billion per year. Drugs that will be used as benchmarks after a price cut include the blood pressure medicines Renitec of Merck & Co Inc., Norvasc of Pfizer Inc. and Coverex of Egis Nyrt., Cadila Healthcare Ltd.'s Atorva cholesterol treatment and Ciprum, an anti-inflammatory medicine made by Barr Pharmaceuticals Inc.'s Croatian Pliva d.d. unit. Drugs that are at least 20% more expensive than the reference price will lose state subsidies unless manufacturers submit a cheaper price by March 10, Molnár said. There are currently 100 products in that group. Hungary will take another 134 products off the list because of a lack of demand, he added. (Bloomberg)