Deciding which drugs to pay for - and how much

BEGINNING October 1, more prescription drugs that are fully or partially reimbursed from compulsory health insurance are now available to Slovak patients. This is a result of a regular process called categorisation undertaken every three months by a body of the Health Ministry. Prescription medications now covered number 5,040.

(Source: TASR)

BEGINNING October 1, more prescription drugs that are fully or partially reimbursed from compulsory health insurance are now available to Slovak patients. This is a result of a regular process called categorisation undertaken every three months by a body of the Health Ministry. Prescription medications now covered number 5,040.

“In various categories, 169 new drugs were added to the list,” Adam Hlôška, the director of the department of categorisation, pricing and drug policy at the Health Ministry told The Slovak Spectator. “Of all the drugs on the categorisation list as of October 1, 51 percent are fully covered by the health insurance companies or require a co-payment of €1 or less by patients. This means that every second drug prescribed for patients is free of charge or requires a minimal payment.”

While prices for over-the-counter medicines, which include medicines to help people stop smoking or lose weight, are entirely market-based, the prices of medicines prescribed by doctors or used in hospitals in Slovakia are subject to government regulation.

Every three months the Categorisation Commission, an advisory body of the Health Ministry, decides which drugs will be fully or partially covered by health insurance and what portion of any cost will be covered by patients.

The commission’s members also divide the drugs into categories, limiting which drugs can be prescribed by certain types of doctors. For example, some drugs for treatment of heart diseases can only be prescribed by cardiologists. Drugs are included on the various categorisation lists based on applications submitted by pharmaceutical producers.

The Health Ministry applies a philosophy so that there is at least one drug fully covered by health insurance or with a low patient co-payment for the treatment of each chronic disease, Hlôška said.

Price referencing scheme

“The Health Ministry has introduced a reference pricing scheme to decrease the price of medicines,” Health Minister Richard Raši told The Slovak Spectator in an earlier interview. “Within this scheme the ministry monitors and compares the prices of medicines from producers [i.e. without value added tax or the margins of distributors and pharmacies] in individual EU member states.”

The price of certain drugs in Slovakia is compared with the arithmetical average of the six lowest prices at which these same drugs are sold in other EU states. The scheme has been used twice and the current categorisation of drugs reflects the results of the second price referencing.

“The system of referencing prices is done in Slovakia in a very dynamic and progressive way and, along with that, it is very transparent,” Hlôška told The Slovak Spectator. “The European Commission assesses our pricing system to be very effective in maintaining the sustainability of funds spent on drugs.”

According to Hlôška, this was evident from a recent visit by a delegation from the Maltese Ministry for Social Affairs and Health which had a high interest in the details of Slovakia’s method of pricing drugs.

“Another proof is in the stabilisation of increases in expenditure on drugs since the start of 2009, where we have managed even to achieve a drop in expenditure during the first quarter of 2009 when compared with 2008,” said Hlôška. “Only a few countries in the European Union managed to do this.”

Health insurance companies perceive the referencing scheme, which brings savings on the costs of drugs, in a positive light.

“Referencing is a trend in pricing of drugs not only in Slovakia, but also in the whole developed world,” Martin Višňanský, director of the strategy and health policy section at the biggest health insurance company, Všeobecná Zdravotná Poisťovňa (VšZP), told The Slovak Spectator. “For the insurer, and equally for the patient, it brings significant savings which can then be re-distributed for the purchase of other health care.”

Višňanský sees one disadvantage of strict referencing in that pharmaceutical companies have only a small amount of room for manoeuvre in the areas of price and volumes of sales in the relatively small drug market in Slovakia.

“On the other hand, introduction of the euro, a transparent system of price proposals via the internet, as well as other mechanisms bring to pharmaceutical companies, health insurers, patients, and to the whole system the possibility of permanent improvement in the perception of the value of medicines, the value of health, and the price which we are willing to pay to buy ‘health’ within our system,” said Višňanský.

The second state health insurer, Spoločná Zdravotná Poisťovňa (SZP) also acknowledged the value of the referencing scheme.

“Referencing of drug prices, with the aim of reducing prices of individual drugs, has been followed with savings in drug costs,” Daniela Stričková, the SZP spokesperson, told The Slovak Spectator. “We see the steps of the Health Ministry, as well as any other savings which can be used for the benefit of patients, in a positive light.”

The Association of Health Insurers (ZPP), composed of three private health insurers in Slovakia, also welcomes the referencing scheme and supports its application as consistently as possible. But Eduard Kováč, president of the association, told The Slovak Spectator that the association does not like the current method of setting the so-called digressive margin, which reduces the margins of pharmacists and distributors in handling more expensive drugs.

According to the Slovak Association of Research-Based Pharmaceutical Companies (SAFS), the referencing system has pushed the price level of drugs in Slovakia to among the lowest in the European Union.

“The Slovak market is one of the smallest in the EU and each producer has to decide whether and how quickly it will introduce a new drug to the Slovak market,” Miroslav Lednár, the chairman of the SAFS Board of Directors told The Slovak Spectator.

“Referencing of drugs also touches generic drugs, especially in connection with changes in currency exchange rates which influence the prices of drugs,” Karol Polóni, the first vice-chairman of GENAS, the association of generic drug producers in Slovakia told The Slovak Spectator.

Polóni sees a disadvantage in the current system of categorisation because it allows members of GENAS to change prices of categorised drugs only during the next categorisation procedure.

Composition of the commission

The current Categorisation Commission consists of 11 members. In addition to Hlôška, two other members represent the Health Ministry, five members represent health insurance companies and three members speak for medical organisations.

Because the two state health insurers will merge into one entity next year and two private health insurers, Apollo and Dôvera, are also expected to become one company as early as the beginning of 2010, the representation of the health insurers on the commission may change, according to Hlôška.

The commission does not have a representative from patients’ organisations.

“The legislation does not permit this,” said Hlôška. “But the Health Ministry is open to a discussion about whether representatives of patients should become members of the commission. However, this requires a very wide discussion within the expert community as well among the general public, and last but not least, changes in the legislation."

The biggest health insurer acknowledges that the commission’s representation might be broadened to include other important groups.

“In the future it might be suitable to consider, of course in cooperation with the Health Ministry which participates in creation of legislation in the drugs policy area, strengthening the participation of two key representatives – patients’ associations and experts from the fields of pharmaceutical economics and/or health technology assessment – including their right to vote,” said Višňanský of VšZP.

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