The rationalization of the pharmaceutical policy and the expected increase in pharmaceutical spending are “key” to saving innovation and strengthening entrepreneurship, says newsit.gr Ilias Kontoudis, Head of Market Access in the Pharmaceuticals Sector of Bayer Greece.
According to Mr. In short, the use of new digital “tools” (electronic prescribing, electronic protocols and individual health records) combined with a targeted increase in the state budget for Health will not only benefit the pharmaceutical industry, but also the the patients.
“Ensuring a sustainable and predictable environment will lead to the attraction of more clinical studies and the further development of production capabilities”, he emphasizes.
Focusing on the issue of mandatory returns (clawback) which is a chronic problem for pharmaceutical companies, Mr. Kontoudis points out that it is a complex issue. For its effective treatment, as he points out, a reduction in uncontrolled overprescription is required, and at the same time an increase in the public budget.
Mr. Ilias Kontoudis, Head of Market Access in the Pharmaceuticals Sector of Bayer Greece.
Read the full interview:
The pharmaceutical expenditure is constantly increasing due to uncontrolled prescribing, but also due to the increased demand for the new
innovative treatments. What are the key measures to be taken to control this increase, without limiting patients’ access to innovative medicines?
International studies confirm that the increase in life expectancy and the demands for more innovative and personalized treatments lead to an increase in the total pharmaceutical expenditure. Nevertheless, this increase can and should be justified. As has been reported by industry bodies, measures to control the increase in overall pharmaceutical expenditure are specific.
Most basic of all is the actual development and implementation of the therapeutic prescription protocols, while the parallel completion of necessary functions is also required for their actual utilization. For example, the interconnection of e-prescribing and protocols with diagnostic centers is a foundation for smooth operation, so that the prices of diagnostic tests are filled in automatically and without the right to change.
Also, automated therapeutic protocols should be expanded, both within hospitals and in the prescribing of high-cost drugs. This application will speed up the execution of prescriptions, as the delays observed due to the Electronic Pre-Authorization System (EPS) will be avoided. The SIP will be able to be used for the examination of exceptional requests, limiting at the same time the workload of the NHS auditors-doctors.
Finally, the actual operation of the therapeutic prescription protocols will also help to limit the prescription of drugs through IFET, as the exceptions that lead to the administration of drugs not available on the Greek market should be sufficiently justified.
Protocols are – although basic – but only one of the tools for rationalizing expenditure. This can be helped by strengthening prevention, introducing the digital patient file, digital cross-checks for any irregularities, etc.
Reducing drug prices is considered by many as a solution to limit spending. Why is this approach not an effective solution in the long run?
Reducing spending solely through pricing policies has proven ineffective. A typical example is the pricing changes in the period 2010-2012. Horizontal measures such as those implemented then have only a temporary effect, as they merely reduce the calculation base, without stopping the upward trend in total expenditure.
The tariff policy must be aligned with the economic and development potential of each country. A sharp and significant reduction in prices often leads to an increase in parallel exports, creating drug shortages in the domestic market. At the same time, factors such as strengthening the conduct of clinical studies and the development of local production, which contribute to the sustainable development of the pharmaceutical sector, must be taken into account.
So if we control the expenditure should we increase the budget for the drug accordingly? And if so, how will the increase be calculated?
To determine how much of a needed increase in the drug budget it is important to first understand how much is actually being spent. Today, two different funding models are in place:
The first modelthe most common, is based on reimbursement of drugs based on reimbursement prices. To this are added the automatic returns (rebate and clawback). However, this way of capturing pharmaceutical expenditure does not reflect public funding, i.e. the net amount spent by the government after deduction of reimbursements.
The second model introduced by implementing “closed therapeutic or product budgets”. In this system, pharmaceutical companies agree with the Price Negotiation Committee to offer a discount on the supply price. Thus, a final amount is determined that reflects the actual spend for each product, after the discount has been deducted. The second model is more accurate, as it captures the actual price, taking into account the predictions for the consumption of the drug, according to the frequency and intensity of the occurrence of each disease.
So in your view, is the extension of “closed budgets” after negotiation part of the solution to the problem? How can such a thing be implemented and what might be the benefit?
If all pharmaceuticals were entered into negotiated ‘closed budget’ agreements, then the Department of Health and by extension the government would know exactly how much was required to fund the medicine. The possible increase of the public budget in this case would be limited, limited and would lead to the reduction – even elimination – of the clawback.
Two key elements are required to be able to achieve the above. The first is to change the operating statute of the Price Negotiation Committee. Today, closed budget deals are mostly negotiated according to previous years’ auto-reimbursement rates. This approach presents serious problems, as high discount rates become unsustainable. Instead, the price negotiation process should be based on the clinical value and economic impact of each drug product or therapeutic class.
The second element required is the strengthening of the Evaluation and Negotiation Committees with manpower in order to accelerate closed budget agreements including both existing and new products or new indications.
An increase in “closed budget” agreements will bring multiple benefits to the Department of Health. It will ensure greater predictability of expenditure and enable accurate recording of savings resulting from negotiations at the level of total pharmaceutical expenditure.
At the same time, any required increase in the budget will be measurable, predictable, without exceeding the levels of increase through the Recovery Fund. Most important of all, however, is that any budget increase will not be accompanied by a simultaneous increase in clawback, as is the case today.
What will be the long-term benefits to the pharmaceutical industry and patients if it is reduced or eliminated clawback;
The rational reform of pharmaceutical policy can open new avenues for the development of the pharmaceutical industry. Creating a stable and predictable framework will act as a catalyst to attract more clinical studies and strengthen the country’s production capacity.
Also, it will be possible to escape from the logic of rewarding such positive initiatives with a clawback offset – that is, something negative. Instead, it will be possible to provide positive investment incentives on the lines of other European countries.