Slovenia
Pricing and Reimbursement of Pharmaceuticals
Jurij Fürst
Department of Pharmaceuticals, Health Insurance Institute of Slovenia
1. Introduction
Health services in Slovenia are provided by both state and private organisations. The central role in financing health services is played by the social insurance scheme, similar to the Bismarck type. A compulsory health insurance provides health services to 98,3% of the population. The provider of compulsory health insurance is Health Insurance Institute of Slovenia, which conducts its business as a public institute. In the field of voluntary health insurance, there are three insurance companies, one of them is mutual. Almost 70% of the population are voluntary health insured.
The health care benefits arising from the compulsory health insurance fund is quite comprehensive. The funds are collected by means of compulsory insurance contribution. The rights to health care services include:
· Primary health care
· Dentistry
· Emergency services
· Specialist outpatient services
· Hospital care
· Social care and special social care institutions
· Services of health resorts
· Medical aids and medicines
· Several financial benefits
- Compensation of salary lost during absence from work
- Travel expenses, death allowances
- Funeral costs
2. Pricing
The Agency for Medicinal Products, a department of the Ministry of Health, is responsible for the registration and pricing of pharmaceuticals. It is a government agency with its own staff. The Registration Committee consists of prominent pharmacists and doctors.
The prices of all public funded pharmaceuticals, including: ethical pharmaceuticals, medicines for hospital use, generics and enlisted OTC products are determined by the state. This law applies to reimbursed pharmaceuticals and non-reimbursed pharmaceuticals. The law requires that the wholesale price of the original product may not exceed 85% of the average wholesale price of an identical or similar product within a reference basket of three countries (Germany, France and Italy). In the case of generic drug, the price may not exceed 95% of the average set by the three countries. The only exemption, to this law is for innovative products (the definition is quite restrictive) and some orphan drugs. In the case of innovative and orphan drugs, the price may not exceed 96% of the average set by the three countries listed above. The Agency for Medicinal Products communicates directly with pharmaceutical firms or their representatives in Slovenia. All decisions made by the Agency for Medicinal Products are also sent to Health Insurance Institute. If any products price exceeds the limit, it can't be reimbursed.
The Health Insurance Institute is authorised to negotiate for the price of drugs, included in the reimbursement scheme. So, for some reimbursed drugs the prices can be significantly under 85% and 95% respectively.
3. Reimbursement
The Health Insurance Institute is fully responsible for the reimbursement of prescribed pharmaceuticals. The Drug committee has 16 members, 8 of them medical doctors, specialists in different areas (including a general practitioner), three representatives from the Agency for Medicinal Products, one representative from the Institute of Public Health and two representatives of Health Insurance Institute (a medical doctor and a pharmacist) . The committee may consult with the Health Council at the Ministry of Health, a national body that advises the Minister of Health on important health questions and with national clinical committees.
The criteria for the drug lists are defined by the act - Decision on the Classification of Medicines to Lists (2003). The following medicines may be classified as members of the positive drug list (1154 pharmaceuticals in 2005):
1. Medicines applied in prevention and in therapy for certain groups of insured persons (children under 18 years, students, pregnancy and motherhood) and medicines for the diseases and health states defined in paragraph 1 of Article 23 of the Law on Health Care and Health Insurance (medicines for the treatment of most important contagious diseases including AIDS and STD's, diabetes mellitus, major psychiatric diseases, epilepsy, muscular dystrophy, multiple sclerosis and psoriasis);
2. Ambulatory medicines designed for self-administration by the insured persons who are suffering from diabetes and are specially trained in self-management of the disease (also for multiple sclerosis and ambulatory treatment of deep vein thromboses – LMW Heparin);
The intermediate drug list contains other medicines that are provided as a benefit of the compulsory health insurance scheme, but are not classified as being part of the positive drug list (304 pharmaceuticals in 2005).
In 2005, 505 active substances were on both lists.
There are three levels of reimbursement by the compulsory health insurance:
· 100% reimbursement for medicines on the positive drug list applied in prevention and in therapy of the specified groups of insured persons and of the diseases and health states defined in paragraph 1 of Article 23 of the Law on Health Care and Health Insurance (see above);
· 75% reimbursement for all other medicines on the positive drug list;
· 25% reimbursement for the medicines on the intermediate drug list.
The voluntary health insurance scheme covers the price difference for reimbursed medicines (up to 100 %). There are no other charges (participation). There are no social criteria for exemption of co-payments.
In 2003 a new reimbursement measure has been implemented: a maximum allowable cost for similar drugs (so called reference pricing on generic level). If the price of any product is higher than the reference price, the difference will have to be paid by the patient (co-payment). In 2005, 42 INN have been included with 256 presentations. Included drugs represent 41% of pharmaceutical consumption in DDD’s and 32% of expenditures.
Products consumed in hospitals have no co-payment. Prescriptions written by hospital physicians at discharge are treated as all other prescriptions.
We have no data on what proportion of prescriptions is not subject to co-payments, but as most of the adult population is voluntary co-insured, their proportion is insignificant.
There is no official negative drug list. Non-reimbursed medicines are primarily OTC pharmaceuticals and non-evidence-based medicines.
The decisions of the Drug committee (i. e. the updated list) are published twice a year in Official Gazette of the Republic of Slovenia.
4. Economic evaluation
The economic evidence, in decision-making is becoming more important. There is no formal obligation for pharmacoeconomic analyses in the process of the registration and reimbursement. The pharmacoeconomic analyses published in international medical journals and on the internet (for instance from the NICE and SMC) and assessments in independent drug bulletins are sources of information for the members of the Drug Committee. For certain drugs the Drug Committee prepares prescribing limitations. Drug groups with prescribing limitations are sartanes, broad-spectrum antibiotics, statines (EAS guidelines, the threshold for reimbursement is 20% cardiovascular risk), drugs for Alzheimer's disease, osteoporosis etc.
There are no earmarked budgets for new and expensive products. They are included on the drug list. For some, prescribing limitations are added. Hospitals are paid extra money for certain most expensive orphan and other, mostly biological drugs limited to the hospital use.
There is no specific organisation for pharmacoeconomic evaluation of pharmaceuticals.
5. Policies towards physicians
With smart health insurance cards, (that are in use by the whole population), it is possible to analyse all the pharmaceuticals prescribed to any patient. Pharmacies send all prescription data to Health Insurance Institute where they are processed and analysed. The data on pharmaceutical consumption is compared to international data (in DDD's per 1000 inhabitants per day) and regularly published along with commentaries in the Slovenian drug bulletin, distributed free to every physician. Physicians are motivated to prescribe rationally. Health Insurance Institute makes regular audits to the physicians, they are focused also on the following of the prescribing limitations. The Health Insurance Institute can demand refunding of the money paid for the inappropriately prescribed drugs.
Physicians can prescribe only one pharmaceutical on the prescription. No more than a three months supply can be prescribed. Prescribing of generics is promoted.
Some primary health care physicians are private, but most of them work in public institutions - Health centres. Smaller Health centres provide only primary health care and dental care and usually have a pharmacy; larger ones provide also specialist outpatient health care. Physicians on the primary health care level are 'gate-keepers'. Every patient has to choose it's own general or family physician. Physicians are paid partially by the number of patients in their practice (per person, regarding the sex and age) and partially by a fee for service system. Patients with coinsurance have to pay only exceptionally.
Salaries of specialists depend on their status and working-time (effective hours). Usually they are allowed to work outside their hospitals.
6. Generics
In Slovenia, there are mostly 'branded generics'. They are produced by Slovenian pharmaceutical factories and imported. In last years Slovenian market is more attractive for generic companies with more generic parallels available. All of them are promoted heavily. Pharmacists are allowed to practice generic substitution for similar drugs with prices above maximum allowable cost. The Health Insurance system tries to encourage the prescribing of generics (positive list, information etc.).
7. OTCs
Most OTC products are sold in pharmacies. Pharmacies also sell medical aids, hygienic products and cosmetic products. OTC switching is possible, but not common. Some OTCs are also reimbursed (paracetamol, ranitidin), so their OTC consumption is less than in countries, where all OTCs are to be paid out of pocket.
8. Margins to wholesalers and pharmacists
The Ministry of Health defines the wholesaler price, (an Agency for Medicinal Products, see pricing section). The margins to wholesalers are not known and depend on negotiated contracts with the pharmaceutical firm.
Some pharmacies are private organisations, but most of them are public institutions with many units – pharmacies in one region. Health Insurance Institute reimburses each pharmacy a fee for their services. Their margin is about 10-11 %. Pharmacies are also paid a duty, but only in regional centres. The VAT for all pharmaceuticals is 8,5 % (low rate, the normal rate is 20 %). The VAT is applied to the wholesalers' prices. Pharmacies earn extra income from the sale of medical aids, cosmetics and other items. The agreements between wholesalers and retailers are not monitored or regulated, except as previously described.
9. Hospital procurement
Hospitals must buy pharmaceuticals from wholesalers. The hospitals negotiate directly with the wholesaler. An increasing trend in Slovenia is for each hospital to form a drug committee. This drug committee develops a hospital-approved list of medications. Once this is accomplished, the hospital negotiates a direct agreement with supplier. Hospitals are not encouraged to bid together.
10. DTC advertising / E-commerce of pharmaceuticals
At this time, Slovenia does not have specific regulation regarding the sale of pharmaceuticals over the Internet.
Table 1. Drug consumption and expenditure data for y. 2001 and 2005 with respective indices.
2001 / 2005 / Index 2005/01No. of prescription drugs / 1.805 / 2.028 / 112
No. of drugs on the positive list / 903 / 1.154 / 128
No. of drugs on the intermediate list / 231 / 304 / 132
No. of enlisted INN’s / 424 / 505 / 119
No. of prescriptions / 12.824.463 / 14.658.633 / 114
No. of prescriptions/capita / 6,4 / 7,2 / 112
Consumption (in DDD’s) / 598.213.925 / 730.000.000 / 119
Total prescription drugs expenditure (in million eur) / 285 / 403 / 142
Public prescription drugs expenditure (in million eur) / 192 / 277 / 144
Total prescription drugs expenditure/capita (in eur) / 143 / 202 / 141
Public prescription drugs expenditure/capita (in eur) / 97 / 139 / 143
Updated: June 2006