DRW Monthly
February 2009
Issue No. 27

Czech Republic's Healthcare Reforms Result in Drug Reimbursement and Pricing Debates

The Czech Republic's State Institute for Drug Control (SUKL) introduced new fees for prescription drugs and doctor visits in January 2008 as part of its health care reform initiative. The reforms target changes needed to increase the transparency of the country's healthcare system, and to transpose into national law the EU laws governing pharmaceutical pricing and reimbursement.

Since the Czech Republic attained full EU membership in May 2004, the government has harmonized most of its regulatory structure to comply with EU regulations. Its healthcare system, however, has been an area of continuing debate between the government and the international pharmaceutical industry. Drug and reimbursement pricing levels have historically been determined according to ambiguous and inconsistent criteria. Despite the Czech government's attempt to decentralize the health sector through large scale privatization since the 1990s, the system has continued to suffer from serious debt. It is only with the introduction of the 2008 amendments that a more solid cost-containment policy and defined health insurance structure have been established in an effort to improve the financial situation of the healthcare system.

The most significant changes to the reimbursement and pricing structure include:

• transferring overall responsibility to SUKL for setting maximum prices (instead of the Ministry of Finance) and for establishing reimbursement levels based on the national health insurance system (instead of the Ministry of Health);
  
• instituting standardized administrative proceedings within which to address the amounts and conditions of reimbursement on a case-by-case basis (thereby replacing the current system of assessing costs by a Ministry of Health decree); and,
  
• implementing various measures to improve transparency in decision-making, cost effectiveness and potential for differentiation (for specific categories of pharmaceuticals or specific circumstances arising in the public sector).(1)
  
  

SUKL's introduction of prescription fees and doctor copayments was specifically intended to increase funding for the healthcare system and to reform the health insurance system. The mandatory fee of CZK30 (or US$1.46) per medicine pack was designed to discourage patients from stockpiling medicines - a common practice and costs the state billions of korunas a year.(2) An unforeseen consequence of these fees has been the strong disapproval voiced by pharmacies. Although allowed to keep the prescription fees, pharmacists still claim that they are not reaping a profit from these reforms because they are now being forced to offer significant discounts in order to take the burden of cost off the consumer.(3) Opponents assert that the new fees could potentially reduce the pharmaceutical sales in the country, and further argue that the government is violating the basic law which guarantees medical care for every citizen.

During its forty years of Communist rule, the Czech Republic instilled a belief in the public that they were entitled to low cost drugs and medical services. Consequently, the government's recent attempt to transition to a new healthcare system at a time when not only the country, but the world is tackling serious economic challenges, has sown the seeds for heated controversy over drug pricing and reimbursement. Hopefully, the benefits of a more financially stable, transparent, and judicious healthcare system will ultimately persuade the government's opponents to accept these changes, and enable the country to become fully harmonized with its European Community partners.

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