Reform of legislation concerning pharmaceuticals

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

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Abstract

A reform on Finnish pharmaceutical legislation prepared by the Ministry of Social Affairs and Health aims to contain pharmaceutical expenses, to improve certain operational preconditions of pharmaceutical companies, to promote the use of nicotine replacement products, and to comply with the European Union legislation.

Purpose of health policy or idea

The Ministry of Social Affairs and Health (MSAH) has prepared a reform concerning the law on pharmaceuticals and the law on the National Health Insurance (NHI). The reform includes several changes for the current state of affairs. The objective of the reform is to contain pharmaceutical expenses, to improve some operational preconditions of pharmaceutical companies, to promote the use of nicotine replacement products, and to implement the changes in the Directive 2001/83/EC of the European Union on the Community code relating to medicinal products for human use in Finnish legislation.

The suggested reform contains following proposals:

• Certain drugs would be explicitly excluded from the national reimbursement system. According to the proposal drugs used only temporarily or for the treatment of only mild diseases, and drugs with insignificant benefits would not be reimbursed.
• The NHI reimbursement rates would be lowered (from 50% to 42% in the basic reimbursement category and from 75% to 72% in the lower special reimbursement category) and the 5-10 Euro deductibles would be removed. In the 100% special reimbursement category the reimbursement rate would not be changed and the deductible would be lowered from five to three Euro.
• The maximum wholesale prices of all drugs would be lowered by 5% which would especially influence pricing of new drugs which have no generic alternatives. The maximum wholesale prices are normally decided by the Pharmaceutical Pricing Board (PPB) working under the MSAH.
• The decision making process of the PPB would be slightly changed. According to the reform pharmaceutical companies are to apply for the maximum wholesale price and basic reimbursement separately. Currently, the basic reimbursement is automatically granted for all prescription drugs which have approved maximum wholesale price.
• Some drugs would be excluded from generic substitution (drugs which do not have product patent, but have process patent in Finland, and which also have product patents in five European countries). This has been proposed by the MSAH already earlier (see the Health Policy Monitor survey (4)2004)
• The length of data protection of pharmaceuticals would be increased from six to ten years. This means that generic alternatives can get market authorisation only after ten years from the market authorisation of the original product regardless of the running time of the patent. The change is required by the EU legislation.
• The sale of nicotine replacement products would be allowed in grocery shops. Currently any pharmaceuticals can only be sold in pharmacies without exception.
• Wholesale prices would have to be same for all pharmacies (for background information see the Health Policy Monitor survey (5)2005).

The National Agency of Medicines grants the licences for pharmacists to operate retail pharmacies. The reformed legislation would more explicitly state criteria according to which the licences are granted.

Main points

Main objectives

To contain pharmaceutical expenses, to promote the use of nicotine replacement products, to improve certain operational preconditions of pharmaceutical companies, and to comply with changes in EU directives.

Type of incentives

Main incentives of the reform are

1. restrictions and lowering for health insurance reimbursements on pharmaceutical expenses,
2. decrease in maximum wholesale prices, and
3. increasing availability of nicotine replacement products.

Groups affected

Patients, The Pharmaceutical Pricing Board, Pharmaceutical Industry, Pharmacies

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

The reform improves the possibilities to contain pharmaceutical expenditure in Finland. However, further reforms are needed, such as renewing the categorisation of drugs and diseases into basic and special (high) reimbursement categories. The categories were mainly defined in the 1960s and 1970s drawing from assessment of the time on the chronicity of conditions and substantial pharmaceutical expenditure incurred due to their treatment.

Political and economic background

The main proposed changes for Finnish pharmaceutical legislation are in line with a long standing policy of the Ministry of Social Affairs and Health to contain drug expenses. Some changes are proposed to comply with EU legislation. The pharmaceutical companies have pressurised the government to limit generic substitution which has been very effective in promoting price competition and reducing the prices of pharmaceuticals.

Complies with

EU regulations

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

The main actor is the Ministry of Social Affairs and Health, which has also been main driving force behind the reform. The objectives are to contain pharmaceutical expenses, to promote the use of nicotine replacement products, to improve some operational preconditions of pharmaceutical companies and to comply with European Union legislation changes. Several components of the reform have been discussed earlier.

Initiators of idea/main actors

• Regierung

• Patienten, Verbraucher

• Privatwirtschaft, privater Sektor

Approach of idea

The approach of the idea is described as:
renewed:

Stakeholder positions

The Ministry of Social Affairs and Health has had a leadership role in designing the reform. The majority of relevant stakeholders in health care are positive or neutral towards the reform.

Perhaps the most controversial proposal is the sale of nicotine replacement products in grocery and other retail shops selling tobacco products. This is fiercely criticized by pharmacists, for whom the sale of nicotine replacement products is rather profitable business. They may also anticipate that this is the first step to allow the sale of other over-the-counter products outside pharmacies.

Pharmaceutical industry has strongly opposed the 5% reduction of maximum wholesale prices.

Some pharmaceutical policy experts connected to the government has criticised the restrictions for generic substitution claiming that the restrictions would only benefit pharmaceutical companies and not patients or the public health care system. According to the proposal, generic substitution would not be aplied to the drugs which have a process but no product patent in Finland, and which also have been granted a product patent at least in five European countries.

The patient organisations have somewhat opposed the changes of the reimbursement levels. However, financial implications for patients are rather small.

Actors and positions

Regierung
Government	sehr unterstützend		stark dagegen
Parliament	sehr unterstützend		stark dagegen
Patienten, Verbraucher
Patients	sehr unterstützend		stark dagegen
Privatwirtschaft, privater Sektor
Pharmaceutical Industy	sehr unterstützend		stark dagegen
Pharmacists	sehr unterstützend		stark dagegen

Influences in policy making and legislation

If accepted by the Parliament the reform will lead to changes in legislation. The government has given the proposal to the Parliament in summer 2005 and legislation is proposed to be effective from January 1, 2006 onwards.

Legislative outcome

n/a

Actors and influence

Regierung
Government	sehr groß		kein
Parliament	sehr groß		kein
Patienten, Verbraucher
Patients	sehr groß		kein
Privatwirtschaft, privater Sektor
Pharmaceutical Industy	sehr groß		kein
Pharmacists	sehr groß		kein

Positions and Influences at a glance

Adoption and implementation

The implementation of the planned reform would mainly be carried out by the government and governmental agencies (including the Social Insurance Institution, the Pharmaceutical Pricing Board, and the National Agency of Medicines). Important stakeholders implementing changes in the sale of nicotine replacement products are grocery and other retail shops, and the municipalities which would be responsible for granting licences and supervising the shops according to the draft bill.

Monitoring and evaluation

Monitoring and evaluation of the reformed legislation are carried out by the Ministry of Social Affairs and Health, the Social Security Institution and the National Agency of Medicines. However, it is not explicitly stated how and when this would be done.

Expected outcome

If the legislation changes are accepted by the Parliament as proposed, it would decrease pharmaceutical expenses in the long run. However, changes for generic substitution could have a major increasing impact on drug expenditure.

It is assumed that smoking is reduced by this reform. An undesirable effect noted by the pharmacist lobby could be that nicotine dependency may increase when nicotine replacement products

• are more accessible and cheaper.
• The reform would also make priority setting in the drug reimbursement system somewhat easier
• The reform may somewhat decrease the profits of pharmacies.

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

The impact of this policy for cost-efficiency of pharmaceutical care is positive, except the change of the generic substitution which would increase prices with no benefit for the patients or public health care system.

References

Sources of Information

Hallituksen esitys Eduskunnalle laiksi sairausvakuutuslain muuttamisesta, HE 97/2005 [In Finnish]

Hallituksen esitys Eduskunnalle laiksi lääkelain muuttamisesta, HE 107/2005 [In Finnish]

Hallituksen esitys Eduskunnalle laiksi lääkelain muuttamisesta, HE 108/2005 [In Finnish]

Author/s and/or contributors to this survey

Lauri Vuorenkoski

Empfohlene Zitierweise für diesen Online-Artikel:

Lauri Vuorenkoski. "Reform of legislation concerning pharmaceuticals". Health Policy Monitor, October 2005. Available at http://www.hpm.org/survey/fi/a6/1