austerity measures

The austerity measures put in place as part of the 'Troika' bailout after Greece's mid-2000s financial crisis included the aim to substantially reduce national drugs spend. With the country already having one of the lowest drug prices in Europe (calculated as the average of the three lowest-price countries), additional budgetary pressure has increased the challenges for pharmaceutical companies in Greece.

Prior to the bailout, Greece spent 2.4% of its GDP on pharmaceuticals, the highest of all OECD (Organization for Economic Co-operation and Development) countries, and through a radical overhaul of health policy in 2010 the country aimed to reduce that by approximately half over the next four years.

"Prior to the bailout, Greece spent 2.4% of its GDP on pharmaceuticals."

As part of the reform, drug rebates have increased from 9% to 11%%for on-patent drugs and a quarterly claw-back is imposed if the bimonthly limits for expenditure are exceeded. In addition, more than 90% of physicians are now using e-prescribing and reports on prescribing are issued and monitored every month.

There also remain several policies that have yet to be implemented. Despite targets to increase generic drug use to 60% by the end of 2014, the actual amount was closer to 20%. The clinical and economic value assessments for new medicines and risk-sharing schemes that were planned are also not currently in practice.

"Part of the problem is down to the low capacity and lack of experience with drug evaluations of the national agencies."

Part of the problem is down to the low capacity and lack of experience with drug evaluations of the national agencies, both of the National Drug Organization (EOF) and the National Organization for the Provision of Health Services (EOPYY), while pricing mistakes and delays in clearing the EOPYY's debts compund the issue.

The Association of Hellenic Pharmaceutical Companies (SFEE) is particularly concerned at the estimated €585 million annual payback required in 2014, an amount equal to 30% of the national pharmaceutical spending budget. Pharmaceutical companies looking to enter the Greek market with new products can, therefore, expect a unique set of challenges: strict price control will continue to affect local bottom line which can impact global profits as a result of parallel trade, while incresed generic utilization and therapeutic reference group pricing will affect uptake and pricing of on-patent drugs.

Building relationships with and educating decision-makers on product value may help to reduce the pressure, but pharmaceutical companies should prepare to offer discounts and negotiate innovative access schemes, among other strategies, to protect the position of exisiting drugs and optimize access for new medicines.

Figure: Key policy reforms in Greece since 2010, implemented to cut the government spend on pharmaceuticals

Sources:

http://en.wikipedia.org/wiki/European_debt_crisis#Greece

http://www.independent.co.uk/news/world/europe/greece-elections-who-are-syriza-and-what-effect-will-their-new-government-have-on-europe-10002756.html

Dr Steven Bradshaw is Managing Director at Market Access Solutions

Eirini Anastasaki is a Project Director at Market Access Solutions

Have Your Say Rate this feature and give us your feedback in the comments section below

austerity measures

Austerity-Driven Policy Dictates a Challenging Environment for Pharma

FIND CONTENT BY TYPE

Pharma IQ COMMUNITY

ADVERTISE WITH US

JOIN THE Pharma IQ COMMUNITY