Global Insight Perspective | |
Significance | Belgium has implemented double-digit price cuts on off-patent drugs reimbursed for over 12 years, while also adding to its reference-pricing system and freezing patient co-payments on two groups of medicines. |
Implications | The moves are designed to reduce the patient's cost burden, while simultaneously lowering overall public expenditure on pharmaceuticals. By targeting off-patent drugs for its biggest cuts, the government is keeping to its agreement with the pharmaceutical industry to prioritise innovation while using all low-cost treatments in its cost-containment efforts. |
Outlook | For the pharmaceutical industry, the news will mean sales losses over the coming year. Generics will also be hit hard, as they will be forced to have their prices lowered even further to retain the 30% threshold from their branded equivalents. |
Belgium's national public health insurer has revealed a series of pricing measures aimed at reducing expenditure on pharmaceuticals over the next 12 months. Effective from 1 January, the measures include price cuts on off-patent drugs, the addition of seven branded treatments to the reference pricing system, and a block on indexing patient co-payments on medicines belonging to two separate reimbursement categories.
Older Drugs Hit by Price-Cut
Off-patent medicines with a long history of reimbursement in Belgium will be those most directly affected by the new measures. Specifically, drugs with expired patent protection that have been reimbursed for 12-15 years have seen their prices cut by 14%. According to the national health insurer—known in French as INAMI, and in Flemish as RIZIV—these drugs include Irish biotech Elan's antibiotic Maxipime (cefepime hydrochloride), French firm Sanofi-Aventis's congestive heart failure treatment Perfan (enoximone), and U.K. pharma GlaxoSmithKline's (GSK's) migraine drug Imitrex (sumatriptan succinate).
A separate category of off-patent medicines that have been reimbursed for over 15 years, has been hit by an additional 2.3% price cut, making these treatments 16.3% cheaper than they were just one month ago. Drugs in this category include GSK's antidepressants Aropax and Seroxat (paroxetine), Swiss firm Roche's anti-emetic Kytril (granisetron HCl), and German company Boehringer Ingelheim's hypertension treatment Motens (lacidipine).
New Additions to Reference Pricing
Elsewhere, seven brand-name products have been added to the reference-pricing list. Their inclusion in the list was based on the fact that each now has at least one generic version that is marketed in Belgium. Under the reference-pricing system, the price of generic versions of therapeutically similar brand-name drugs is used as a benchmark. As soon as one generic version of an existing drug enters the Belgian market, the original drug is then reference priced to the generic. All generics must be priced at least 30% below their reference priced originator drugs.
New entries to the reference-pricing system in 2009 are:
- Asthma treatment Beclophar (beclomethasone; Teva, Israel)
- Prostate cancer drug Casodex (bicalutamide; AstraZeneca, U.K.)
- ACE inhibitor Coversyl (perindopril; Servier, France)
- Cancer treatment Farmorubicin (epirubicin; Pfizer, U.S.)
- Diagnostic contrast agent Magnevist (gadopentetate dimeglumine; Bayer Schering Pharma, Germany)
- Asthma medicine Qvar (beclomethasone dipropionate HFA; Teva)
- Parkinson's disease treatment Requip (ropinirole; GSK)
Patient Co-Payments Frozen
Finally, INAMI/RIZIV has confirmed that—in accordance with its budget plan for 2009—it will not index the reimbursement ceilings for drugs that belong to two specific reimbursement categories, namely categories B and C. This means that the ticket modérateur—the portion of the drug's cost that is non-refundable and therefore payable by the patient—will not increase for these treatments during 2009. The health insurer claims that this decision was made to accommodate lower consumer spending power, which is expected to affect Belgians this year. Category B drugs are described as therapeutically significant, and include treatments such as antibiotics, anti-asthmatics, and antihypertensives. Treatments in this group are reimbursed at 75% for most patients, and at 80% for VIPO patients (widows, disabled people, pensioners and orphans). The standard co-payment ceiling for most Category B drugs is 13.30 euro, and 8.80 euro for VIPO patients. In Category C, drugs with a lesser therapeutic value are reimbursed at 50% for all patients, with a 13.30 euro payment ceiling for non-VIPO patients, and an 8.80 euro ceiling for VIPO patients. Treatments in this class include spasmolytics and anti-emetics.
Outlook and Implications
All three new pricing and reimbursement regulations will have a positive impact on patients: price cuts on older drugs will result in lower patient co-payments, and widening the reference-pricing system should eventually have the same effect. Co-payments for mid-range drugs have also been frozen for a year. For the pharmaceutical industry, this news will mean sales losses over the coming year, but the government is keeping its promise to include off-patent branded drugs in its cost-containment efforts, rather than focusing exclusively on generics. Indeed, the price cuts on older brand-name drugs will squeeze margins within the generics industry even further, as generics will be forced to have their prices lowered in order to retain the 30% threshold from their branded equivalents. The additions to the reference-pricing system are perhaps the most damaging development for the industry as a whole, although with spending on medicines expected to overstep its 2008 aim, this is not unexpected (see Belgium: 1 December 2008: Lower Reimbursement and More Reference Pricing Groups to Trigger US$29.1-mil. Belgian Savings in 2009).