BMI View : The worst of the pharmaceutical market downturn last year may be behind drugmakers operating in Poland. A consultation launched by the Ministry of Health and the enforcement of views bythe industry and doctors may yield a compromise on the more regressive measures introduced in the Reimbursement Act of 2011. However, the bureaucratic oversight of the National Health Fund (NFZ) in approving drugs for reimbursement, and the Ministry of Health's intrusive directives to physicians, remain serious obstacles to the market's potential. Whether the government acts on the conclusions drawn from this consultation will remain to be seen.
The Polish Ministry of Health has launched a consultation to examine the effects of the Reimbursement Act on the pharmaceutical market and the provision of drugs to patients. Doctors are calling for the National Health Fund (NFZ) to be flexible in terms of reimbursing drugs, arguing that the current system does not allow doctors to prescribe according to their medical prerogative, but rather what the NFZ has deemed to be prescribed for a specific clinical indicator.
We view this level of interference in front-line services as unnecessary and detrimental to healthcare access. The NFZ's strict reimbursement policy indirectly forces doctors to account for cost in their clinical decision-making, meaning that ultimately, patients suffer from using sub-optimal medicines. We believe generic substitution and implementing e-prescription technology will enable more efficient reimbursing of patients.
The CEO of the Employers' Association of Innovative Pharmaceutical Companies (Infarma) waded into the debate, declaring that after a year of the Reimbursement Act, drug companies had a good understanding of what aspects of the law undermined patient access to medicines. Lobbying on behalf of drugmakers, he suggested that the NFZ eliminate its restriction on pharmaceutical expenditure, which is a hard ceiling of 17% of its total budget, and implement a more outcomes-based approach to insured patients. He also voiced grievances over the margin ceilings placed on manufacturers as well as 'punitive' claw-back taxes.
We continue to view ceilings on margins and clawback taxes as regressive and as unnecessary measures that do not contain the cost of drugs. It has been noted in Turkey that smaller drugmakers often inflate production costs as a way to circumvent the ceiling and increase their earnings. These measures stifle the industry from launching new drugs and formulations.
The Polish Association of the Pharmaceutical Industry (PZPPF), which representing mostly generic drugmakers, has also proposed changes to the way the NFZ determines prices for drugs added to the Reimbursement List. Currently, drugs added to the list cannot be more expensive than the cheapest offering available with the same active ingredient, ignoring dosage and volume in a package. The PZPPF says this is the principal reason behind market withdrawals of new drugs.
Pharmacies have asked that the government reduce the frequency of price changes and margin ceilings on retailers when new reimbursement lists are published. Pharmacies often downsize inventories of drugs in the run-up to the publishing of a new list, as changes in mark-ups from wholesaler to retailer and retailer to customer often means money is lost on unsold stock. The ministry has also taken note of the increased copayments towards prescription drug costs; unofficial figures suggest that patients paid PLN650mn towards partially subsidised prescription drugs, a rise of 40% over 2011 figures.
We believe the Reimbursement Act has disincentivised the provision of innovative medicines in Poland, preventing patients from receiving the latest therapeutics. While this has moderated healthcare spending in the short term, the impact on patient's health may be felt further down the line. Poland's ageing population and incidence rates of non-communicable diseases are trending in line with Western countries, and the need to meet these challenges is become more urgent. And while the budget for the NFZ has increased for 2013, we believe structural and operational reform within the organisation is required to meet Poland's healthcare needs.
In 2013, we forecast the Polish pharmaceutical market to grow by 4.5% in US dollar terms and 4% in local currency terms to PLN32.62bn (US$10.05bn). Out-of-pocket expenditure is expected to be the key driver of growth in spending in 2013, with the Polish government still restricting growth in healthcare expenditure.
|Pharmaceutical Market Predicted To Grow In 2013|