Pharmacies threaten to demand cash for drugs

Nearly nine years after the fall of communism, the people of Slovakia may soon feel another painful effect of the transformation from a centrally-planned economy to a free market - they may be asked to pay cash for drugs at pharmacies.
The enduring financial problems of the country's health care sector came to a head on August 19 when the national Pharmaceutical Chamber declared a state of emergency in the pharmaceutical sector. The chamber also agreed on a resolution according to which citizens will have to pay cash for so-called 'second-category' (partially state subsidized) drugs unless the government and insurers take steps to improve the financial situation of the health care sector.


Line ups like this one could become endemic at drugstores.
Ján Kuchta

Nearly nine years after the fall of communism, the people of Slovakia may soon feel another painful effect of the transformation from a centrally-planned economy to a free market - they may be asked to pay cash for drugs at pharmacies.

The enduring financial problems of the country's health care sector came to a head on August 19 when the national Pharmaceutical Chamber declared a state of emergency in the pharmaceutical sector. The chamber also agreed on a resolution according to which citizens will have to pay cash for so-called 'second-category' (partially state subsidized) drugs unless the government and insurers take steps to improve the financial situation of the health care sector.

The root of the problem is that pharmacies are not getting enough money from health insurance companies, which are in turn not being paid by corporate contributors. Jozef Blahovec, spokesman for the Pharmaceutical Chamber, said that according to the latest calculations, the overall debt of insurance companies to pharmacies now totals around three billion crowns ($87 million). The overall deficit of Slovakia's health care sector is estimated at around nine billion crowns ($260 million).

"We have reached a critical stage. To prevent the total collapse of the pharmaceutical sector, we need to have at least half or maybe two thirds of the total debt repaid," Blahovec said.

People insured at the largest private debtors to the pharmacies - the insurers Apollo, Perspektíva and Sideria-Istota - have already been paying for second-category drugs for two weeks. Second category pharmaceuticals include around 40% of all drugs used in Slovakia, but do not include vital medicines such as insulin or substances needed to treat cardiovascular problems.

The implementation of the second part of the resolution, which requires that all people pay cash for second category drugs, will depend on the outcome of a government session during the first week of September. The resolution is binding on all pharmacies in the country.

"That point [of the resolution] will be implemented after we see the result of the government session on Wednesday [September 2]," said the, Blahovec. In other words, if the government does not find a way to start pumping money into the health care sector, people will start paying cash for drugs in Slovakia on September 3.

Health Care Minister Ľubomír Javorský was reported as saying that the chamber's threat was a violation of law since Slovak citizens have a constitutional right to get medical treatment free of charge. Javorský has proposed a transfer of between 3.8 and 5.8 billion crowns from the state budget to the health care sector, but the government returned the proposal to the Ministry of Health Care for re-assessment.

Representatives of the Ministry of Health Care, the Pharmaceutical Chamber and the Association of Health Care Insurance Companies held a closed-door meeting at the ministry on August 31, but would not comment on the outcome of the meeting. The head of the insurers' association, Vladimír Balogh, who is at the same time general director of the troubled Apollo insurance company, also opposed the chamber's threat to force people to pay for drugs, saying that cash payments would not solve the financial problems of the pharmaceutical sector.

"This move is not in accordance with the law and it would not solve the problem. We need to find additional sources of financing and then find tough ways of securing the financing of the sector," Balogh said, but refused to elaborate further.

However, the Pharmaceutical Chamber's Blahovec said the state's debt to the sector was nearly half of the overall sum. and thus it was the government that should be the first to repay the overdrafts through the state-controlled General Health Care Insurance Company.

"If the government, together with big state companies, pay their debts, the collapse would be delayed for now. Funds from the state budget or some outside financial sources, such as loans, should go to the health care sector to overcome the current crisis," Blahovec said.

He said that people should not lose their money even if they pay cash for drugs, as they should be allowed to reclaim the funds from their insurance companies.

"All the pharmacies want now is to have enough money to pay for first category [fully subsidized] drugs. We will use funds raised from the second category drugs to pay for these vital substances," Blahovec said.

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