HUP: If prescription drugs do not urgently increase in price by 10 to 15 percent, we face serious shortages

Croatia faces serious shortages of medicines and disruptions in production if the prices of generic drugs are not aligned with inflation, warned the Croatian Association of Pharmaceutical Manufacturers (UPL) at today’s meeting with journalists from the Croatian Employers’ Association.

As they stated, on Wednesday they sent a letter to Health Minister Vili Beroš with a detailed calculation, proposing a price increase of 15 percent for drugs costing up to 25 euros, and 10 percent for drugs in the range of 26 to 50 euros. This adjustment represents a cost to the system of about 30 million euros, or just over 0.5 percent of the total health system budget.

As is known, the pricing policy for generic drugs in the EU has been implemented for years with price cuts, which has become unsustainable in recent years.

– Despite the fact that this problem has been present throughout the EU for a long time, the vulnerability of the supply of generic drugs is increasing. In April 2023 alone, around nine thousand active shortages of individual drug packages were reported in Europe, and according to data from the Croatian Agency for Medicinal Products and Medical Devices (HALMED), a total of 185 active shortages have been reported in Croatia this year, of which more than 60 percent, or 115 shortages, are generic drugs – explained Ana Gongola, president of UPL.

Given that generic drugs represent the most regulated part of the system, which has brought nearly 30 million euros in savings to the system in the last two years, that the average box of generic medicine costs only 4.4 euros, and that generic drugs account for 68 percent of all medicine boxes issued to patients for only 8 percent of the budget share, the necessity of finding new solutions to ensure drug supply is even greater.

– The availability of medicines is declining due to the imbalance between rising costs on one side and price pressures on the other. Increased costs due to inflation, input raw material costs, rising environmental protection requirements, and increased regulatory demands put generic drug manufacturers, who cannot independently set prices for their products, in an unsustainable situation – emphasized Ana Gongola.

Two key models

Such conditions lead to the withdrawal of drug suppliers from the market, seriously jeopardizing the security of supply of key medicines. The situation is particularly serious in the most vulnerable therapeutic areas, where, for example, as much as 70 percent of oncology generic drugs are supplied by two or fewer suppliers. On the other hand, over a ten-year period, 16 antibiotic drugs have disappeared from the market in Poland, 11 in Spain, and ten in France.

In order to stop such a race to the bottom, ensure sustainable long-term drug supply, and create a healthy, competitive, and resilient market for generic drugs, urgent application of new models at the national level is necessary, say HUP.

– There are two key models that we must urgently implement in Croatia. These are automatic indexing, or aligning drug prices with inflation, and multiwinning, the division of drug procurement work among a larger number of manufacturers – emphasized Ana Gongola.

The multiwinning model, recommended by the EU, supports market competition and will stimulate the retention of a larger number of manufacturers in the Croatian health system. This will enable regular drug supply and the regular functioning of the health system without the need for emergency procurements.

The specific proposal for the multiwinning model from the HUP Association of Pharmaceutical Manufacturers includes three different prices in the ratio of quantities 60:30:10 at the molecule level, and the drug procurement contract would be concluded directly with KBC Zagreb, after which individual contracts would be made with each hospital.

As Lider learns, the Ministry of Health has accepted the idea of multiwinning, and a meeting on this topic with Minister of Economy Davor Filipović has already been scheduled for next week. The response from the Minister of Health on the topic of prices is still awaited.