The new law on medicines that came into force on the first day of this year has one clear declared goal: to improve patients' access to modern innovative medicines which are usually very expensive. Slovakia has universal health coverage with three health insurance companies collecting the mandatory contributions that each employee, employer or self-employed pays amounting to 14 percent of one's monthly income. The state covers for a special category of people such as mothers on maternity leave, pensioners, students, or the unemployed. Health insurance companies then pool these resources and cover the cost of treatments and medication but with some strings attached. In order to be partially or fully covered, drugs need to pass an evaluation process which apart from the pharmacological aspects takes a look at their cost too and the impact that this can have on the financial resources of health insurance companies. The drugs which fail this test or those for which the pharmaceutical companies that registered them on the market did not apply for coverage form the health insurance system for various reasons, are labelled "drugs on the exceptions list". It means that a doctor can prescribe them, but the health insurance companies decide on an individual basis whether to cover the cost or not. It puts some patients, especially oncological ones, in difficult situations.
"The treatment of skin cancer belongs among the very expensive ones, given the fact that you can't use radiotherapy or chemotherapy. Many patients are at the mercy of their health insurance company which has to decide on individual basis if it covers or not the treatment and often they are rejected. As a consequence they have to cover the cost of the treatment on their own and some take out loans to pay for it," says Silvia Schmidtmayerová from the organisation "Help for patients with skin cancer".
The new law aims at reducing the number of drugs on the exceptions list by motivating pharmaceutical companies to submit their products to be covered by health insurance companies. It increases the maximum threshold for measuring the cost-effectiveness for a particular medicinal product under consideration for coverage measured per one year of good health for the patient to 41 times the average monthly wage in Slovakia. The exception are drugs for rare diseases defined as those with less than one case per 50,000 inhabitants which are included in the coverage without the need to prove they are cost effective.
The law introduced for the first time in Slovakia cost sharing, which allows pharmaceutical companies and health insurers to agree on sharing the expenses with a particular drug above a certain level. Half a year after the new law came into force the Health Ministry says it has about 50 new applications from pharma companies to introduce their drugs to the public health insurance system.
"Thanks to the new legislation, it is possible for modern innovative medicines to be available to Slovak patients on the basis of public health insurance," reads a statement from the Health Ministry adding that drugs on the exceptions list will be fully covered by health insurance companies this year with the possibility that it would continue next year too but only for a very limited number of cases. The Ministry stresses that it has to find a way to bring modern drugs to patients without ruining the public health insurance system.
"The Health Ministry has presented this law as a tool to bring modern drugs to Slovakia but it does not work in practice. Our patients still have to ask for drugs on the exceptions list and they do not have time to wait until a decision is made," says Jana Pifflová-Španková from the "No to cancer" patients' organisation.
All three health insurance companies as well as representatives of the pharmaceutical industry agree that the way the new law was presented to the public created expectations that are too high. Renáta Hajdinová a drug policy expert with health insurance company Dôvera explains: "It has created this idea that from now on any innovative drug will be available to patients automatically and fully covered by their health insurance. It's not true. Drugs with restrictions attached whose coverage will be decided by the health insurer on an individual basis will remain. But looking back at this period since the law has been in force, drugs for rare diseases - those with less than one case per 50,000 inhabitants- have been those which have so far benefited from the new law. This is because they do not have to submit a cost-effective analysis and an evaluation of the real clinical benefit for patients in order to be covered. I have to say however, that these drugs represent the highest risk for the long term financial stability of the system. We already know that the estimated cost of drugs for rare diseases which have already applied to be included in the public health insurance system in the first 5 months of this year is €49 million per year for all health insurance companies."
To put this figure into context it is 2 and a half times more than the total that all three health insurance companies paid for the whole of last year for the drug which took the largest share of their coverage of prescription drugs. It is a relatively old biological drug for treating inflammation of bowel and arthritis affecting thousands of patients. Last year, health insurance companies paid a total of €886.4 million for prescription drugs for all patients; 2.8 percent less than in the previous year. Among the most expensive ones were drugs for hepatitis C, leukemia, breast cancer and those for skin cancer for which patients can get coverage only on an exceptional basis.
Lawyer Dagmar Yoder an associate partner at Deloitte who has been advising major pharmaceutical companies on the application of the new law says patients have to be patient. "Health insurers and pharmaceutical companies have been negotiating new contracts. Until they have an agreement with insurers, pharma companies can't submit any applications for new drugs to be included in the pricing and reimbursement system. These negotiations on cost sharing are very difficult because it's something new on the Slovak market and it involves so many details, for example how to deal with VAT, or how to protect commercial secrets. The new law offers some degree of flexibility and pharmaceutical companies are interested in finding ways to bring innovative drugs to patients in Slovakia but there will always be some which will simply be too expensive for a public health insurance system like Slovakia has. We have to be realistic."
Dagmar Yoder adds that cost sharing between insurers and pharmaceutical companies has been working well in the neighbouring Czech Republic for four years already and she hopes Slovakia will follow suit and the first results will be seen by the end of this year. The largest health insurance company Všeobecná zdravotná poisťovňa which is state owned is optimistic about cost sharing.
"New molecules are so expensive, so sharing the cost with other stakeholders in the drug production and distribution chain is a solution for bringing innovative medicines to patients in a regular way thus avoiding the exceptions list. But negotiations are very tough. In some cases we have already reached an agreement. But some companies are simply not interested, says Všeobecná zdravotná poisťovňa's spokesperson Viktória Vasilenková without giving more details on companies or specific drugs with whom they have agreed on cost sharing. As cost sharing is based on very good estimates of the demand for a specific drug and it's almost impossible to predict how negotiations will turn out overall, some experts have questioned the analysis that the Health Ministry had prepared when submitting the law. Assistant professor Tomáš Tesař from the Pharmacy Faculty of Comenius University in Bratislava is a member of the Health Ministry's reimbursement committee on behalf of the Union health insurance company. He warns that, already based on the figures from the first four months of this year, taxpayers will have to chip in. "The Health Ministry wants to save money to pay for expensive innovative drugs but at the same time it puts some barriers in front of generics and biosimilars which are those drugs which saves them money. For me it's hard to understand why, "he says.
Even if all eyes are on cool innovative drugs the law deals with generic and biosimilars too. These are copies of brand name drugs and are by definition cheaper. It introduced a three step system that basically says that the first generic which wants to enter the market has to offer a price discount at the level of a minimum of 45% of the price of the original. Previously it was 30%. If a second generic wants to enter the market it must offer a 10% discount on top of the price offered by the first one. A third generic drug will have to be even cheaper, by at least 5%. For biological similar drugs the system is similar but with 30% discount for the first one and 5percent for the following ones. Terézia Szádocka from the Association of Producers of Generic Drugs GENAS says that the new law creates uncertainty.
"We have noticed a decline in the interest of companies to introduce new generic or biosimilar drugs in the public health insurance system in Slovakia. In comparison to last year the number of applications is 20 percent lower. This three step system introduced by the new law came on top of other stricter rules from the past, such as adjusting the price to the average of the three lowest in the EU, clustering. On top of this if the producer, which is located in other country, decided to change the packaging, for example the number of pills in a box or from foil tab packaging to bottles, the law says that this is a new drug and has to go again through the pricing and reimbursement process. All in all I can say that Slovakia has one of the strictest laws in Europe when it comes to generics and biosimilars," concluded Terézia Szádocka.
RSI will return to the topic of the new law on medicines at the end of the year to see if the prediction that it needs time to show results comes true.
New law on medicines
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