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The Polish Ministry of Health recently finished a negotiation round for RX drugs that will be available to Polish patients. The government hopes to save 1 Billion Zloty (~€220 Million) by cutting prices for many drugs. The price cuts provoked angry reactions of pharmacies as they are forced to sign contract with the National Health Fund (NHF). Furthermore, they only have little time to implement the new plans as the new conditions apply as of January 1. Poland is Europe’s sixth largest pharmaceutical market and the consequences of the reform can be already seen.
The health minister, Bartosz Arłukowicz (pictured), explained that the price cuts helped to bring down cost by more than 15%. The money saved will be used to make drugs more affordable for patients with lower incomes.
As indicated above, pharmacies will see some dramatic changes in their day-to-day business. They longer procure drugs on their own, and acquire the drugs at prices set by the NHF. For now, they don’t know the prices that will be charged as of January 1. Pharmaceutical wholesalers in any case already began to order less drugs . They fear a loss of stock value due to the potentially lower prices set by the government. The same applies to pharmacy’s as they are acting cautious not to order too much. This leads to some unpleasant experiences for patients as it might take up to two days just to get the needed medicine. Pharmacist don’t order any surplus medicine as they fear economic losses. There are around 14,000 pharmacies in Poland and they have to purchase a new software to get updates on the new prices. This software package will cost them around 8,000 Zloty (~€1,800) and especially for smaller pharmacies this could be threatening. Each pharmacy is mandated to sign a contract with the NHF by January 1. That leaves them will little less than 3 weeks to implement and update the software.
While pharmacists have reasons to dislike the reform the pharma industry thinks differently. Poland is Europe’s sixth largest pharmaceutical market with a estimate value of €4.4 Billion Patients spend around €114 annually on pharmaceuticals, which is half the European average. Next to that, drug prices are among the lowest in Europe. A average pack of drugs costs €3.6 euro, whereas the European Average is around €8. Even the most expensive drugs cost significantly lower than the European average. The aim of the new law is to further reduction in prices. However, the Ministry of Health wants to further lower the prices. The ministry for the first time set up a round table with Pharmaceutical companies to negotiate prices. Such negotiations are a novelty in Poland. The negotioations are welcomed by Jerzy Toczyski, the president of the manufacturers’ association INFARMA (innovative medicines). He outlines, that these negotiations are a step forward towards dictating prices. However the negotiations are not finished yet.
Patients, might be the biggest losers of this reform as they might significantly higher prices for drugs. So far, only one winner is known -the National Health Fund.
The Europe Health Care Team offers deeper and customized insights into the CEE healthcare market in form of Due Diligences and Investment Checks in cooperation with its partner Healthcare Solutions.
