Czech Republik: Dispute over drug market reerupts - Foreign drug producers allege Health Ministry favors local company
By Katya Zapletnyuk
Staff Writer, The Prague Post
June 29, 2005
Foreign drug companies launched a fresh round in their ongoing battle with the Health Ministry in mid-June when they pounced on alleged legal flaws in its updated ruling on drugs and reimbursement rates offered by health insurers.
The International Association of Pharmaceutical Companies (MAFS), which mostly represents foreign companies selling more expensive drugs still under patent protection, used an analysis by former deputy health minister and now private consultant Josef Suchopár to expose flaws in the new drugs reimbursement rules. The analysis' findings highlight the MAFS' growing frustration with the ministry that effectively determines the local drugs market.
According to the law, the ministry must state one drug that is fully covered by health insurance for each category of treatment. Suchopár's audit showed that in two categories, including cures for arteriosclerosis, or the clogging of blood vessels often leading to heart attacks, and antidotes for cyanide poisoning, the latest Health Ministry didn't select any covered drug for treatment.
In eight other areas the drug recommended no longer has a valid registration to be on the market. The ministry countered that drugs similar to those without valid registration were available in the list.
The association's attack sparked fears from pharmacies that the new reimbursement rules would be delayed, meaning patients might have to pick up a bigger part of the tab for their medication. Insurance companies had to step in with promises this won't happen.
The episode highlighted how powerless the MAFS is to influence the Health Ministry's national drugs selection and payment system, which the MAFS claims favors local generic drugs producer Zentiva, as well as MAFS' reliance on European Commission intervention in effecting change.
Brussels officials are expected to rule in July on an MAFS complaint dating from last March that the Health Ministry broke EU rules on the nondiscriminatory selection and pricing of drugs by public authorities and has failed to comply with EU transparency regulations. The ministry neglected to publicize the evaluation criteria it used for selecting drugs and determining prices, provide reasons behind its decisions to deny registration for certain drugs, observe binding time limits for considering registration requests for drugs and disregarded appeals of its decisions, said MAFS President Pavol Mazan.
He added that the process lacked transparency and producers hadn't received any feedback from the ministry about their comments on the categorization process sent in late May.
The ministry strongly denied the accusations. "I am convinced the categorization process is in line with the rules," said Zoran Nerandžic, director of the Health Ministry's legislative department.
Behind closed doors
Criticism of the ministry's key role in determining which companies get a slice of the local market for prescription drugs reached fever pitch last fall when the MAFS alleged a private deal between Zentiva and the ministry.
Under the alleged arrangement, Zentiva offered to lower its prices on some drugs and suggested the ministry decrease insurance reimbursement rates for lower-priced treatment categories, which would give Zentiva an edge over producers of more expensive, patented drugs. The agreement concluded behind closed doors hurt producers of original medications competing for the same business, according to the MAFS.
Health Minister Milada Emmerová has been attacked because her son, Jirí, is Zentiva's marketing director. She denied any improper influence was exerted.
Earlier, Emmerová disbanded the so-called categorization commission, a consultative body including pharmaceutical business experts and representatives of health insurance companies that traditionally oversaw the categorization process. Emmerová formed a new commission in mid-March, too late to have any input into the latest set of drugs and reimbursement recommendations issued at the start of June.
While the haranguing between the MAFS and the ministry continued, the largely sidelined Zentiva has seen its sales and profits soar.
Last week the company announced its intention to buy Romanian drug producer Terapia as part of its larger expansion strategy. Zentiva posted a profit of 1.6 billion Kc ($65 million) last year on sales of 10.7 billion Kc.
The ministry regularly updates the list of drugs it recommends to be covered by insurance. The process is aimed at trying to get a better deal for public health service by recommending cheaper drugs where possible; for example, when a formerly patented drug is no longer protected and can be bought cheaper, and improving treatment by adding new, usually expensive, drugs.
Katya Zapletnyuk
