HTA REIMBURSEMENT IN THE CEE REGION:

Transcription

1 HTA REIMBURSEMENT IN THE CEE REGION: Experiences Of Cost Containment Measures In Poland And The South Central European Region Health Economics in the context of health care system experiences from Serbia, Bosnia & Hercegovina and Croatia 1 Agenda SERBIA State of Affairs Serbia Bosnia & Hercegovina Croatia Health Technology Assessment (HTA) Serbia - State of Affairs Introduction of a new technology New Drug / Medical Device seek approval Reimbursement Approved? No / Partial Yes End Approved? No Yes negotiate Pricing seek Reimbursement Serbian Health Insurance Office (RZZO) Medicines and Medical Devices Agency of Serbia (ALIMS) Patient pays full price or % that is not reimbursed Government can intervene, override and stipulate price of medicines Current State of Affairs Government can intervene, override and stipulate price of medicines Ministry of Trade, Tourism and Services Ministry of Health Government Medicines Pricing Revised Ministry of Health Proposes new pricing Evaluates and passes on for Government Decision Passes legislature on revised pricing / rejects 1

2 Current State of Affairs Con s Pricing - lack of innovation stimulation; Reimbursement - lack of transparency and Evidence Based Medicine use; - insufficient resources to handle intro to Health Technology Assessment. Assessment - HTA not required. Pro s Evidence Based Medicine and Health Technology Assessment are acknowledged as very important future factors. Health Economic training is established within academic institutions. Draft guidelines within reimbursement process (May 2011). Current State of Affairs - Then Serbian Health Insurance Office (RZZO) October 07, European Health forum awarded Director of National Insurance Office Svetlana Vukajlovic a special award for the achieved results in the reform of medicines financing. With the financing reform, it has been achieved that the List of Medicines that are provided by/charged to the national insurance office according to the number and type of medicine does not trail behind other European countries, whose citizens give more funds for health insurance than the citizens in Serbia. With measures of forming lower price medicines, prices of original medicines and their generic parallels are identical, which makes Serbian Healthcare system unique in Europe. * RZZO official website news Current State of Affairs - Then Serbian RZZO Introduces Expanded List as Value of Drug Reimbursement Rises 24% in Published: 3/25/2010 The Serbian national health insurance has expanded its drug list with the addition of 250 new generics in March; the value of drug reimbursement provided by the insurer rose by 24% year-on-year in The Serbian pharmaceutical market is growing dynamically, and the policy enunciated by the country's health insurance provider specifies generic substitution wherever possible, so that it can be seen as a welcoming market for generics producers, and a more challenging market for innovative drug makers. Current State of Affairs - Now The market is expected to reach 920 million euros ($1.21 billion) in 2011 in wholesale prices, or around 1.1 billion euros in retail prices, according to Miomir Nikolic, the head of the Serbian Chamber of Commerce s group of drug wholesalers, who cover 85 percent of the market. The state owes 9.5 billion dinars ( 95 mil/$120 mil) to wholesalers who then owe about as much to manufacturers, he said. Growth will continue even with a chronic lack of liquidity in the Serbian health-care system as bills for drugs delivered are paid with an average delay of 90 days to 120 days Serbian NIF (RZZO) signed agreement to receive 10% discount on all drugs (both generic and brand) reimbursed (on a positive list) from Pharma (estimated 5 mil euro) in Feb 28, 2011 These savings will be used to improve patient care & introduce new innovative therapies to a positive list. Most likely, savings will be applied towards branded Oncology products, branded antibiotics and other products. Current State of Affairs - Now NIF (RZZO RZZO) Budget ( mil. mil.) Serbian NIF (RZZO) draft price regulation (May 2011) Revisions to the current price regulations will include the following: Price for brand product is to be no more then 20% of the price of generic. There is a new positive list regulations in the works to be announced in May New regulations will reflect on the criteria for placing and removing a product from the positive list. New Regulations will take into account necessity for the new therapy, pharmaco-economic indicators of justification for a new therapy application, as well as the wholesale price of a new therapy. Required: PharmacoEconomic analysis. But will be specified what kind... Sektor za ekonomsko - finansijske poslove Republičkog zavoda za zdravstveno osiguranje, februar godine 2

3 NIF (RZZO) Income in 2010 Sektor za ekonomsko - finansijske poslove Republičkog zavoda za zdravstveno osiguranje, februar godine Employment contributions Pension plan contributions Budget transfers Other income NIF (RZZO) Expenses in 2010 Sektor za ekonomsko - finansijske poslove Republičkog zavoda za zdravstveno osiguranje, februar godine Employees salary (104,599) Health protection expenses: hospitals, medical equipment, utilities Prescription drugs Travel and sickness funds NIF (RZZO) expense account Debt interest rate & credit repayment BOSNIA & HERCEGOVINA State of Affairs Health Technology Reimbursement in the CEE Region Situation in Tarik Catic, MScPharm ISPOR Bosnia&Herzegovina President ISPOR 16th Annual International Meeting May 21 25, 25, 2011 Hilton Baltimore, Baltimore, MD, USA General data Administrative Organization General Framework Agreement for Peace (Dayton Peace Agreement) from 1995 Location: Western part of Balkan Peninsula Surface: km2 State level Independent country since Total inhabitants: 3,9 million Capital: Sarajevo Entity level GDP per capita: Total Health Expenditure: 10% GDP Federation of Republic of Srpska Brcko District Cantonal /regional level 10 Cantons 4 Regions 3

4 Health Sector Governance Ministry of Civil Affairs of is in charge for the overall coordination of health issues at the state level Agency for Medicines esand Medical Devices cesof Bosnia and Herzegovina Ministry of Helath of Entity goverments resposnible for health and social sector (organization and financing) 3 Health Care Systems Health Sector Governance Federation of Ministry of Health Federal Health Insurance fund 10 Cantonal Health Insurance Funds Hospital funds Legal Framework State: Law on Drugs Entitiy: Law on Health Care Health Sector Organization Law on Health Insurance Health financing Pricing Sistem In development on State level Repulic of Srpska Ministry of Health Republic Health Insurance fund Hospital funds Health Sector Financing Bismarck Model solidarity system Financing through Health Insurance Funds Managed by insured persons No private Health Insurance introduced innpractice even legal framework exists Health expenditure: 10% of GDP ( public expenditure 7,3% + private 2,6%) Higher than average in CEE Health Inequalities: 17% 35% of population not covered by HI (in different parts of country) Health Expenditure* FBiH RS Expenditure % % Pharmaceuticals , ,42 % 25,4 25,5 22,9 22,95 Total Expenditure Pharmaceuticals , ,66 % 9,5 10,2 10,3 Total Expenditure *Data published by Health Insurance Funds Health Decission Process (pharmaceuticals) Marketing apporval (Agency for Medicines and Medical devices) Health Decission Process (Reimbursement of pharmaceuticals) Federal HIF (citostatics, dialysis, HIV, MS) Federation of Cantonal HIF (Primary Health Care) Federation of Federal HIF Cantonal HIFs Reimbursement (Health Insurance Funds) Republic of Srpska HIF Application for reimbursement by MAH HIF Board of Experts Reimbursement Apporval Tender Essential medicines list obligatory for all HIFs 100% reimbursement level Other medicines Reimbursement level 25%, 50% or 75% Depending on HIF budget HIF Board of Experts Reimbursement Apporval Referal pricing or Tender 4

5 Health Decission Process (Reimbursement of pharmaceuticals) Republic of Srpska Republic of Srpska HIF (Citostatics and other expensive drugs; Primary Health Care) HIF Board of Experts Reimbursement Apporval Referal pricing or Tender Conclusion Systematic approach to HTA is not introduced Preliminar results of Survey on HTA conducted by ISPOR BH among Health Insurance Funds and Ministries of Health indicate that HTA and Pharmacoeconomic analyses are/should be implemented in reimbursement decissions in future Positive movement in Federation of BH New Law on Health Care (2010) predicts establishment of HTA board appointed by Ministry of Health Lack of educated experts in HTA field Need for more transparent reimbursement decission making process Need for cooperation with other countries in region HTA Agency as independent organization on state level could help in HTA implementation CROATIA State of Affairs Institutionalization of the Agency for Quality and Accreditation in Health 2007, Act on Quality of Health Care: The Agency for Quality and Accreditation in Health (as legal, public, independent, non- profit institution), responsible for HTA process and report and database on HTA Health technologies: pharmaceuticals, medical devices, diagnostic and screening techniques, surgical procedures, other therapeutic technologies and procedures, and health promotion activities Three departments: 1) Department for Quality and Education, 2) Department for Accreditation in Health, and 3) Department for Development, Research and HTA Formal HTA activities actually began in October 2009 Croatian Guideline for Health Technology Assessment Process and Reporting (with international peer-review review process) HTA Department and multidisciplinary HTA Working Group (appointed by Agency for this purpose) Table of Contents I Introduction and legal framework II HTA process 1 Topics suggestion and selection process 2 Scope prepared 3 Assessment process 4 Appraisal process 5 HTA Report 6 Guide for Croatian primary economic analysis 5

6 I Introduction and legal framework Croatian HTA reports as recommendation, with aims to support policy-makers at national level,, particularly Croatian MoH,, and HZZO,, in making evidence-informed informed decisions on the strategic planning, investment, management and the implementation of technologies in health care, on funding (reimbursement) and coverage of health technologies, as well on hospital level on request from hospitals directors and policy teams Health technologies: pharmaceuticals, medical devices, diagnostic and screening techniques, surgical procedures, other therapeutic technologies and procedures, and health promotion activities HTA process should have main parts: Topics suggestion and selection process, Definition of Scope for HTA, Assessment process, Appraisal process, and Report preparing and publishing In the beginning, part of HTA process, Appraisal process, will be defined later in new version of Guideline after future changes in legal framework A Single Technology Assessment (STA): a single technology for a single indication A Multiple Technology Assessment (MTA): more than one technology, or one technology for more than one indication 1 Topics suggestion and selection process Topics suggested and requirements: Croatian Ministry of Health, Croatian Institute for Health Insurance, private health insurance company, industry, health professionals societies, clinical and public health professionals, patients societies, hospitals directors and policy teams, as well as Agency staff through HTA Topic Proposal Form Agency HTA staff review: to ensure they are appropriate, to check whether they are already included in its work, then filtered according to selection criteria and check list; a) burden of disease (population affected, morbidity, mortality) b) resource impact (i.e. the cost impact on Croatian Institute for Health Insurance or the public sector) c) policy importance (i.e. whether the topic falls within a government priority area) d) whether there is inappropriate variation in practice across the country Topics approved and prioritized quarterly by the HTA Advisory Committees 2 Scope prepared The Agency develops a final scope that describes the boundaries of the assessment and the issues that will be investigated Objectives and research questions are defined for each approved topic, with the assistance of HTA Advisory Committee members and clinical experts, as necessary, according the so-called PICO structure (Population/patients with the disease of interest; Intervention(s),, i.e. the technology under assessment; Comparison(s),, which should serve as reference or gold standard; Outcomes which encompass the endpoints for assessing effectiveness, safety, and economics) 3 Assessment process A pre-assessment of the existing evidence on each selected topic is prepared by HTA Department staff (including existing Core HTA and/or HTAs from other countries), final decision about HTA process, Assessment phase, will be done according Algorithm; Algorithm for HTA process (Assessment phase): 1. Already published Core HTA and/or HTAs from other countries (Yes or No) If Yes, HTA will be critically appraise for quality by INAHTA checklist for the appraisal of HTA Reports; further adaptation will be done according EUnetHTA Adaptation Toolkit with new health economic analysis according the part of this guideline -Guide for Croatian primary health economic analysis If No, 2. Already published Systematic Reviews (SR) on clinical effectiveness and safety (Cochrane database of SR, DARE database) and SR of economic analyses (Yes or No) If Yes, SR will be critically appraised and new clinical trials will be added if necessary, with new health economic analysis according the part of this guideline - Guide for Croatian primary health economic analysis If No, 3. New SR on clinical effectiveness and safety (with protocol) and SR of economic analyses (with protocol) (will be based on Cochrane Handbook for Systematic Reviews or the CRD guidance for systematic reviews), with new health economic analysis according the part of this guideline - Guide for Croatian primary health economic analysis Each project designated as internal,, or internal plus external, depending upon the resources and expertise available If part of HTA will be designed external, national and international academic and scientific institutions, and HTA Agencies or units or organization from EUnetHTA will be contacted for a contract of specific HTA project; for each external project, an internal liaison researcher is appointed (A project multidisciplinary team) All authors must satisfy established Agency s Code of Practice for Declaring and Dealing with Conflicts of Interest in HTA process,, and Authorship criteria If the project is assessing a drug or medical device, industry will be contacted for information; Agency provides guidance on the process for this contact, and format for document submission 4 Appraisal process defined in the future after necessary changes in HTA legal framework Members of the HTA Pharmaceutical, and Devices and Systems Advisory Committees, appointed by the Agency, in the beginning will serve as part of the research team up to and including the protocol phase, but not beyond this phase (In the future they will serve in Appraisal process) 5 HTA Reports Several types of HTA report: Full HTA report (STA, MTA) in English language and Summary of full English report for the larger international community, Summary of full English report translated to Croatian language, Short Advice to the Minister of Health and Short Advice to the HZZO in Croatian language, Short Advice to Hospitals, Short Advice to health professionals, and Short Advice to patients, written in lay language Quality assessment: : internal review, international peer- review (including clinicians, methodologist, and economist) The Final reports: published on Agency s web site and subsequently in print Update of each HTA Report: every 2 years, or before (when there is significant new evidence that is likely to change the recommendations) 6

7 Element of HTA Defining the decision problem Comparator Perspective on costs Perspective on outcomes Type of economic evaluation Time horizont Synthesis of evidence on outcomes Measure of health effects Source of data for measurement of HRQL Reference case for economic analysis The scope developed by the Agency Therapies routinely used in the Croatian health system, including technologies regarded as current best practice Croatian Institute for Health Insurance (HZZO, as public payer) (societal perspective, including all cost and benefits outside the health care system, may be presented in addition, if considered relevant for some topics) All direct health effects on individuals Cost-effectiveness analysis (CEA) or Cost-utility analysis, (CUA), depending on the particularities of the technology being assessed sufficiently long to reflect all important differences in costs or outcomes between the technologies being compared Based on a Systematic Review with/or without Meta Analysis (Head-to-Head RCTs preffered, indirect comparisons and observational studies may be accepted) Natural units (CEA) or QALYs (CUA) Reported directly by patients and/or carers (EQ-5D) Source of preference data for Representative sample of the public (using a choice-based valuation of changes in HRQL method) Discount rate An annual rate of 5 % on both costs and health effects (in sensitivity analyses between 3% and 10%) Equity weighting An additional QALY has the same weight regardless of the other Sensitivity analysis, characteristics of the individuals receiving the health benefit Modelling, Subgroup analysis Yes Future Croatian HTA perspective At national level - First pilot STA, further permanent STAs and MTAs process and reports; Further educational activities for HTA users, HTA doers, and promotion of HTA At international level According to EU Cross-Border Health Care Directive,, with Article 15 on Cooperation on health technology assessment - prepared for participation and contribution to the cooperation and exchange of objective, reliable, timely, transparent and transferable information among Member States within a voluntary network (in accordance with the legislation of the Member State where they are established) connecting national authorities or bodies responsible for health technology assessment designated by the Member States Importance of support and commitment of government institutions, adequate legal framework and funding, educated permanent staff, national and international cooperation and collaboration (network) Learning Process It is important to look at others experiences! Learning Process Source: Blue Ocean Strategy 2009 Learning Process Different Options to Regulate Drug / Medical Device prices through: 1. Rate of Return (RoR) Regulation 2. Price Setting 3. Value-based pricing 4. Controlling use (price-volume tradeoffs) 5. International price referencing Japan Japan Canada USA 12 EU Countries Lowest Price and O riginal Country 5. International Reference Pricing 2008 West Europe Lowest in EU 7

8 Learning Process Risk sharing as part of the value based pricing strategy Learning Process Risk sharing as part of the value based pricing strategy Health Technology Assessment (HTA) Health Technology and Decision making Health Technology Assessment (HTA) To be useful to decision makers, HTA must be tailored to the decision nodes of the health-care system and the needs and interests of decision makers at each of these nodes. The OECD Health Project. Health technology and Decision Making. Paris, France: OECD Health Technology Assessment (HTA) HTA to Health Technology Policy Development Process (high level steps involved in the process) Core HTA Structure 35% 26% 19% 23% 38% 29% 40% 17% Schwarzer R. Siebert U. Methods, procedures, and contextual characteristics of health technology assessment and health policy decision making: Comparison of health technology assessment agencies in Germany, United Kingdom, France, and Sweden. International Journal of Technology Assessment in Health Care, 25:3 (2009),

9 THANK YOU! HTA POLICIES IN GREECE Kritikou P. and Yfantopoulos J University of Athens The Greek Healthcare System Overview 1 The Greek health system presents the features of the Southern European Model based on the mixture of both Bismarck and Beveridge elements. Following the European taxonomy of health systems, Greece presents a mixture of public contract and public integrated models The Greek Healthcare System Overview 2 Highly fragmented it is characterized by the co-existence of three subsystems: ESY - National Health Service Compulsory social insurance Voluntary private insurance National Level The Ministry of Health and Social Solidarity (YYKA); overall responsibility for national health policy, together with; EYS National Health Service FUNDING comes from: Regional Level DYPE - Seven regional health authorities implement national policies at a regional level. general taxation social insurance premiums private expenditure (primarily patient out-of-pocket payments) MAJOR REFORMS IN THE PHARMACEUTICAL SECTOR 1983 Establishment of EOF National Drug Organization Act 1316/ Introduction of Positive List (Article 20) 2006 Pharmaceutical Care Reform Legislative Act 3457/ The Greek Memorandum 2011 Introduction of New Pharmaceutical reforms aiming at cost containment Pharmaceutical Policy The Regulatory Framework Ministry of Health and Social Solidarity Overall Planning Implementing Reforms Administrative Stracture EOF National Organization of Medicines Functions under the MoH Marketing Authorization National, Central, Decentralized, Mutual Recognition Ministry of Development Pricing Committee Issuing price bulletin 9

10 GDP per capita Expenditure 120 GR EU ,2 92, ,8 94, ,8 Greece 84,5 83,3 82,7 84,1 86, EU (27 countries) EU (25 countries) EU (15 countries) Euro area (16 countries) Euro area (15 countries) Greece Source: OECD, 2010 More Expenditure does not lead to better health Exponential increase of Pharmaceutical expenditure in Greece 700 Pharmaceutical expenditure, PPP$ per capita Greece Source: London School of Economics, Prof. Ali McGuire Relative retail pharmaceutical prices EU Oversupply of Physicians in Greece generate higher Pharmaceutical Expenditure (or nearest year) 1. Ireland, the Netherlands, New Zealand and Portugal provide the number of all physicians entitled to practise rather than only those practising. 2. Data for Spain include dentists and stomatologists. Source: OECD Health Data 2009, OECD ( 10

11 The Greek Memorandum In May 2010, the IMF and the euro zone states agreed a billion euro (US$156.5 billion) rescue package for Greece over three years. In response to the rescue package, Greece announced its fourth austerity package designed to reduce the government deficit by 11.0% of GDP by 2013, from 13.6% of GDP in 2009 to under 3.0% of GDP by 2014 A reform of the healthcare sector is urgently needed. Public expenditure on health accounted for 5.9 percent of GDP in Public per capita expenditure grew at a real average rate of growth of 5.4 percent in A large set of measures are needed to stabilise or even reduce the public health spending-to- GDP ratio to around 6 percent, while improving the quality of care provision trough substantial gains in productivity and significant cuts in waste and corruption. From evidence to recommendation Policy Design and Implementation Evidence Other considerations Other considerations Recommendation Objectives: Successful Health Reforms Improve Population s Health New legislation Health Reforms (Primary, Secondary, Tertiary) Public Health Restructuring Pharmaceutical Sector Pharmaceutical Reforms Development of National drug policies Sustainable Pharmaceutical sector Business Plans, Procedures, Audit ) Access to Medicines Regulatory Framework Alleviate shortages in hospital primary care Support the Pharmaceutical Industry Training Programmes 11

12 Main Conclusions * Economic Crisis: Need to Control Expenditure * Relative low Pharmaceutical Prices *Ineffectiveness of List to Control Expenditures * Excess Supply of Doctors contributes to Pharma expenditures : Lack of Prescribing Control The authorities plan: to save between EUR 2 and 3 billion in the coming years. Introduce e-prescribing to all social security funds by end 2010 an updated price list and a "positive list" of reimbursed medicines based on new reference prices are due to be launched by end-2010 Overall, the government should aim at reducing pharma spending to the EU average of 1 percent of GDP. May 2011 CHARACTERIZING HEALTH CARE SYSTEMS FINANCING HEALTH TECHNOLOGY IN POLAND : COST-CONTAINMENT MEASURES 69 Prof. Karina Jahnz-Różyk Dr Joanna Lis 70 POLSKIE TOWARZYSTWO FARMAKOEKONOMICZNE Source: HEALTH CARE SYSTEMS: EFFICIENCY AND POLICY SETTINGS OECD 2010 IN TERMS OF THE SIZE OF PHARMACEUTICAL MARKET, POLAND OCCUPIES THE SIXTH POSITION IN EUROPE. IN TERMS OF MARKET SIZE PER CAPITA, POLAND OCCUPIES ONE OF THE LAST PLACES IN EUROPE. MARKET IN SLOVAKIA AND HUNGARY IS BIGGER THAN IN POLAND BY 47% AND 60%. Number of inhabitants bln EURO) Value of the market (b Number of inhabitants 71 Value of the market (bln EU URO) 72 12

13 POLAND HAS ONE OF THE LOWEST AVERAGE PRICES OF MEDICINES IN EUROPE, EMERGING 55% BELOW THE AVERAGE. IT IS CAUSED BY THE LARGE SHARE OF GENERICS AND POOR AVAILABILITY OF INNOVATIVE MEDICINES. THERE ARE 591 INNOVATIVE MEDICINES IN POLAND, MOST OF WHICH HAVE BEEN ON THE MARKET FOR A LONG TIME. THEIR AVERAGE PRICE IS 54% BELOW THE EUROPEAN AVERAGE. The average price of generic and innovative drugs, EURO, net producer prices. The average price of original drug, EURO, net producer prices. price (EURO) Net manufacturer p AVERAGE 8,0 EURO Manufacturer price ( EURO) AVERAGE 16,1 EURO PRICES OF GENERIC DRUGS IN POLAND ARE ALSO ONE OF THE CHEAPEST IN EU AND LOWER THAN THE AVERAGE OF 40%. POLAND HAS THE HIGHEST LEVEL OF CO-PAYMENT FOR THE PATIENT, 67%, IN TOTAL SPENDING ON HEALTH CARE COMPARED TO OTHER EUROPEAN COUNTRIES. THE LEVEL OF PATIENTS CO-PAYMENT FOR THE REIMBURSED MEDICINES IS 32% Market segments 2010 % co payments The price of generic drug, EURO, net producer prices. Total reimbursement 12,6 32% Patients expenditures reimbursed drugs 4,1 68% NHF reimbursed drugs 8,5 100% e (EURO) Manufacturer price AVERAGE 4,7 EURO Patients expenditures products not reimbursed Patients expenditures - OTC 11 Market value (bln PLN) 26,2 2,6 100% Total patients expenditures 17,7 67,5% Total NHF expenditures 8,5 32,5% The level of patient s co payment in total spending on health care in selected countries PRICE CONTROL x VOLUMEN CONTROL = SPENDING CONTROL PRICE REGULATIONSj, (freezing, lowering, ) CUTTING COSTS FOR MARKETING RISK SHARING SCHEMES S U P P L Y NATIONAL REFERENCE PRICING INTERNATIONAL PRICE Comparisons PRODUCT VOLUME CAPS REVENUE CONTROL "Cost-effectiveness pricing" PROFIT CONTROL REBATES PRODUCT RENEVUE CAPS VBP PATIENT S COPAYMENT FOLUMULARIES PATIENT/DISEASE BUDGET 77 COST-CONTAINMEMT MEASURES D E M A N D REGISTRATION & MARKET AUTHORISATION RULES INSURANCE SYSTEM GENERIC SUBSTITIUTION TAXES POSITIVE/NEGATIVE REIMBURSEMENT LISTS CONTROL PRESCRIPTION TRATMENT GUIDELINES PARALLEL TRADE PHYSICIAN RX BUDGET PHUSICIAN HEALTH CARE BUDGET 78 13

14 COST-CONTAINMENT MEASURES ARE ALL OVER EUROPE Price cuts, mandatory rebates 2010 NEW REIMBURSEMENT BILL IN POLAND Price freeze 2010 Introduction of IRP 2010 Producers Wholesalers Pharmacists Patients Hungary 2011: since Jan Combo RP since Jul: tax 12 18% and Rep fee 5 10 M HUF Rebind PV agr. -10% Changes planned in 2011/2012 :paybacks, limits on sponsorships, extension of TRP, Value Based Pricing Norway Sweden Finland Estonia Latvia Total fixed budget for Reimbursement (17%) Payback (Returning the exceeding amount) Ireland Denmark Lithuania Netherlands UK Poland Germany Belgium Czech Slovakia Austria France Switzerland Hungary Slovenia Romania New rules for limit groups Categories of availability, levels of reimbursement Fixed prices & margins Portugal Spain Croatia Bosnia Serbia Italy Albania Bulgaria New rule of pharmacy& Wholesaler margins evaluation Penalties/sanctions Greece New agreements Source: INFARMA Poland NEW REIMBURSEMENT BILL IN POLAND Producers Wholesalers Pharmacists Patients Reimbursement decisions Aplicant s obligations: continuity od supplies, Prohibition of trade marketing Risk-sharing instruments Course of issuing the reimbursement decision Transitional and final regulations IMPACT OF NEW REIMBURSEMENT BILL Impact on access to innovation Drug spend freeze on 17% of total health budget Retail margins based on cluster limit, not price Risk sharing mechanisms (?) Pressure on P/L Limited top line growth opportunity Payback Penalties Reimbursement process Improvement of transparency: predictable and timely (?) Impact on drug prices and patient co-pay Fixed prices and margins New limit groups criteria: expanding jumbo Gx clusters, mkt share indicator Introduction of hospital limits New reimbursement level classification criteria (co-pay burden and length of treatment) Price negotiation mechanism, timing & frequency Timelines and rules of reimbursement decisions 2,3,5 years impact of data exclusivity expiry on price erosion Gx entry price erosion criteria Impact on commercial practices Ban on incentives aimed to increase reimbursement products sales As a result of new regulations NHF will save in the next four years, more than 5 billion PLN on the cost of the reimbursement of medicines, therapeutic programs and chemotherapy TOTAL 5,3 bln PLN 83 IMPACT OF PLANNED COST- CONTAINMENT MEASURES Value of expenditure on the reimbu ursement, chemotherapy and therapeutic prog grams NHF savings resulting from restricted budget of expenditures on drugs Expenditures on reimbrusement, therapeutic programs and chemotherapy after the introduction of reform 14

15 One of the effects of a new law will be to increase patients expenditures on reimbursed drugs by more than 3 billion PLN, and reduction of the profitability of generic companies. TOTAL 5,3 bln PLN Scenario I all manufacturers will bear the costs of reduction of drugs prices (unlike option): Generic Companies (contribution according to 68% market share) ,58 Innovative Companies (contribution according to 32% -1,68 market share) Patients cost 0,00 Poland is an important player in the export market in Europe Price reduction due to the introduction of new pharmaceutical legislation will increase the phenomenon of parallel exports Scenario II only some manufacturers will bear the costs of reduction of drugs prices (probable option): % of Generic Companies will reduce costs -1,79 25% of Innovative Companies will reduce costs -0,42 Patients cost 3,05 86 Change of margins and average prices of drugs caused by the introduction of new law will lead to loses of warehouses at the level of 47 million PLN and pharmacies at the level of 91 million PLN WHAT ELSE CAN HAPPEN IN POLAND? INN prescribing Warehouse value at the selling price (PLN) Warehouse value before the new law Warehouse value after the new law Change The value of warehouses depreciation / losses on sales (mln PLN) Central / group purchasing Warehouses (wholesales prices) Pharmacies (retail prices) Margin decrease to 5% Reduction of average drug price by 10% (2,58 pln per pack) Increasing restrictions on access to prescribers and promotional practices Emerging drug formularies, pressure on prescribers to control costs 87 New payers will emerge as a result of evolution in insurance systems 15