Expatica news

Medicine prices set to fall 40pc

5 February 2004

AMSTERDAM — Health Minister Hans Hoogervorst has reached a deal with pharmacists and manufacturers securing a 40 percent reduction in the price of medicines whose patents have expired.

It means that premiums for the national ziekenfonds health insurance scheme will not need to increase. Those who have a private (particuliere) insurance policy will pay less for their medicine, public news service NOS reported.

The accord between Hoogervorst, insurance association Zorgverzekeraars Nederland, medicine manufacturing association Bond van de Generieke Geneesmiddelenindustrie and pharmacists association KNMP signals an end to a drawn-out industry dispute.

Besides the price reduction, it has also been agreed that insurers and pharmacists will save on costs by reducing by 6.82 percent the bonuses paid to pharmacists. Manufacturers offer these bonuses to pharmacists who sell their products.

Pharmacists hope that agreeing to hand in part of their bonus will improve their public image, which has been damaged recently due to revelations that a large percentage of the profits on expensive medicines go into pharmacy cash registers.
In exchange for these concessions, Hoogervorst has promised pharmacists and medicine manufacturers will not financially punish them. He initially wanted to reclaim pharmacists’ bonuses, but a court ruling thwarted his plan.
Hoogervorst had also planned to tax the funds that manufacturers spend on marketing. He claimed that medicine prices — and therefore government spending — were unnecessarily being driven up by the marketing costs of manufacturers.

But the threatened financial penalties will only be removed on the condition that the health minister meets his ministry’s budget-cutting targets.

Amid Cabinet plans to cut EUR 5.7 billion from the 2004 Budget, the Health Ministry’s accord with the pharmacy industry is designed to save EUR 622 million and an extra EUR 685 million in 2005. If these targets are not met, the minister will be forced to step in and recoup more funds from the industry.

The branch associations of pharmacists, insurers and manufacturers must also seek approval of the plan from their members. Pharmacists have also said that medicine prices must remain high enough to ensure business profitability.

The new medicine prices are scheduled to be implemented on 1 January 2005, but exact tariffs are yet to be determined.
[Copyright Expatica News 2004]

Subject: Dutch news