Selecting drugs to a higher reimbursement category

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

Abstract

In 2003 the European Court of Justice ruled that the Finnish legislation does not comply with the directive 89/105/EC relating to the transparency of measures regulating the prices of medicinal products. Consequently legislation concerning the decision-making process to include drug into a higher health insurance reimbursement category was changed in 2004. The most important change was to shift decision-making from the political arena to the governmental administration.

Purpose of health policy or idea

Legislation concerning the decision-making process to include drugs into the higher health insurance reimbursement category was changed in January 1, 2004. In the higher reimbursement category the national health insurance reimburses 75% or 100% (instead of 50% of the basic category) of the cost above the fixed sum  (5 €) for the drugs prescribed for specified chronic diseases decided by the Government. The main objective of the reform was to comply national legislation with the EU directive 89/105/EC relating to the transparency of measures regulating the prices of medicinal products for human use.

In June 2003 the European Court of Justice ruled that the Finnish legislation does not comply with this transparency directive. Decision-making process concerning the basic health insurance reimbursement category has followed the directive from the start of the Finnish membership in the EU, but before the ruling the Finnish government considered that this directive could not be applied to decisions concerning higher reimbursement because those decisions are made in a legislative process.

The process leading to the reform was initiated by Pharma Industry Finland (PIF, an association supervising the industrial policy interests of the research-based pharmaceutical industry) and brought to court by the European Commission.

The most important change was to shift decision-making from the political arena to the governmental administration. Before the reform, the legislative decree of the Government specified which drugs and diseases are in the higher reimbursement category. However, after the reform only diseases are specified by the legislative decree of the Government, and the Pharmaceutical Pricing Board (PPB, an organisation under the Ministry of Social Affairs and Health having seven civil servants as members) decides which drugs have higher reimbursement in these diseases. The Government could make legislative decrees when it sees it appropriate. On the contrary, PPB makes decisions based on applications made by pharmaceutical companies. After the reform the decisions and grounds for the decisions are given within 3 months from the application submitted by an individual pharmaceutical company.

Main points

Main objectives

1. To make national legislation comply with the EU directive 89/105/EC relating to the transparency of measures regulating the prices of medicinal products for human use,
2. to increase transparency in decision-making process to include drugs into a higher reimbursement category.

Type of incentives

Legal obligation to authorities to provide a decision and grounds for decision in three months.

Groups affected

Legal obligation to authorities to provide a decision and grounds for decision in three months, pharmaceutical companies

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high

Political and economic background

This reform was done because in June 2003 the European Court of Justice  ruled that the Finnish legislation does not comply with the directive 89/105/EC relating to the transparency of measures regulating the prices of medicinal products for human use.

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

• The process leading to this reform was initiated by PIF in 1997. Pharmaceutical companies viewed that decision-making concerning higher health insurance reimbursement categories was too slow and non-transparent, and argued that Finland did not comply with the transparency directive.
• The Finnish Government /Ministry of Social Affairs and Health considered that this directive could not be applied to decisions concerning higher reimbursement categories as this decision-making is a legislative process. Eventually, the aim was to keep these decisions officially more political than administrative. Moreover, difficult and sensitive decisions might be easier to take when the process is not totally transparent.
• However, in June 2003 the European Court of Justice ruled that the Finnish legislation did not comply with the transparency directive in this respect. In consequence, Finland had to change legislation concerning the decision-making process.

Initiators of idea/main actors

• Government

• Parliament

• Private Sector or Industry: Pharmaceutical industry

• Others

Approach of idea

The approach of the idea is described as:
renewed:

Innovation or pilot project

Else - Basic reimbursement category in Finland

Stakeholder positions

Pharmaceutical industry had leadership role in bringing forward this policy reform. Other stakeholders such as the European Union, Ministry of Social Affairs and Health and pharmaceutical industry did not participate to this process significantly in any way.

Actors and positions

Government	very supportive		strongly opposed
Parliament	very supportive		strongly opposed
Private Sector or Industry	very supportive		strongly opposed
Others	very supportive		strongly opposed

Influences in policy making and legislation

The health insurance law was changed according to the ruling of the European Court of Justice and the directive 89/105/EC. This is in line with the original proposal of Pharma Industry Finland (PIF).

Legislative outcome

success

Actors and influence

Government	very strong		none
Parliament	very strong		none
Private Sector or Industry	very strong		none
Others	very strong		none

Adoption and implementation

• The adoption and implementation of this reform took place promptly after the ruling of the European Court of Justice, lasting only few months.
• The role of PPB increased in the reform, as it previously decided solely which drugs are in basic reimbursement category. PPB now has a key role to promote the rational development of higher reimbursement category under constrained resources. The Parliament has appropriated 8.4 million euros to the costs of new drugs taken in the higher reimbursement category for the year 2004.
• The outcomes of the reform are partly dependent on whether PPB have enough resources to make objective decisions under the pressure of pharmaceutical companies.

Monitoring and evaluation

 There is no official mechanism to evaluate this health policy reform.

Expected outcome

• The goal of the directive is to increase transparency, and this reform will probably promote it in many ways: applicants are informed on decisions and grounds of the decisions, there is a strict time limit for decisions and the decision-making process is more explicitly described in the legislation.
• An undesirable effect may be that decision-making will become too industry centred (in the opposite of patient/citizen centred) because pharmaceutical companies have a very central role in decision-making when being official applicants.

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

The policy will not have any sudden major impact, but in the long run it may improve the fairness and efficiency of the Finnish drug reimbursement system, because after the reform decision-making will be more explicit and transparent.

References

Sources of Information

Description of previous decision-making process:
Vuorenkoski L., Toiviainen H. & Hemminki E. (2003) Drug reimbursement in Finland – a case of explicit prioritising in special categories. Health Policy 66(2):169-177.

Author/s and/or contributors to this survey

Lauri Vuorenkoski

Suggested citation for this online article

Lauri Vuorenkoski. "Selecting drugs to a higher reimbursement category". Health Policy Monitor, 04/04. Available at http://www.hpm.org/survey/fi/a3/2