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Same-Day Analysis
Czech Oncology Treatment Expenditure Will Not Increase in 2010 as Revenues from Health Insurance Premiums Plummet in January
Published: 2/25/2010
IHS Global Insight Perspective | |
Significance | Expenditure on oncology treatments in the Czech Republic will not increase in 2010, even though the number of new cancer patients registered in the country is expected to rise by 5%; at the same time, a reported 4.75% y/y decline in premium incomes of health insurance companies in January could be a foretaste of a year in which health insurance companies are forced to exhaust their financial reserves to maintain standards of care. |
Implications | There has been a major expansion in the care provided to cancer patients in the Czech Republic in recent years, and the threat of a deterioration in the elevated standards of care, due to the economic difficulties faced by the Czech Republic, needs to be seen in the context of the improvements made in the country in recent years. |
Outlook | With increasing unemployment and decreasing health insurance premiums, as well as lower revenues from fixed healthcare co-payments, it appears inevitable that the only way present standards of care will be upheld in the Czech Republic is through using health insurers' financial reserves. However, when these run out—as is predicted to happen in 2011—it is unclear what the healthcare authorities will do. The expected change of government at the election in June will determine this, and it is unlikely to be more positive news for pharmaceutical companies. |
No Increase in Expenditure on Oncology Treatments, Despite Increasing Cancer Incidence
As a result of the economic crisis, there will be no increase in Czech public expenditure on oncology treatments in 2010, according to Jiri Vorlicek, head of the Czech Oncological Society, quoted by Czech newspaper Hospodarske Noviny. This is despite the fact that the number of new cancer patients in the country is expected to increase by 5% during the year: around 76,000 Czechs are expected to be diagnosed with cancer in 2010.
Czech cancer patients receive comparable treatment with those in the 15 pre-accession member states of the European Union, according to Vorlicek. However, in 2010, Czech health insurance providers will be unable to increase the funds available for the treatment of cancer, Vorlicek told the source, while stating that an assurance had been negotiated with health insurance providers that the most ill patients would continue to receive the most comprehensive treatment. For these patients alone, the cost of reimbursing the drugs used in their treatment comes to a total of 1.2 billion koruna (US$62.6 million) per year.
Oncologists Seek Agreement with Pharmaceutical Companies on Reducing Prices of Oncology Medicines
Oncologists in the Czech Republic are keen to negotiate with pharmaceutical companies on the reduction of the price of oncology drugs, Vorlicek told the source. He also stated that some oncology drug producers had volunteered to reduce the price of certain drugs, with a reduction of 7% mentioned.
Czech oncologists do not believe that those with milder forms of cancer need to be concerned by the prospect of deterioration in care in 2010, reports the source. However, they are calling for an overhaul of the entire system of allocating funds to cancer treatments in the Czech Republic, in order to avoid a major crisis involving a lack of funding in the coming years. The Czech Republic is a country with a statistically high incidence of cancer, and is the world leader in terms of the number of colon cancer patients per number of inhabitants.
Premium Revenues of Health Insurance Companies Decline by 4.75% Y/Y in January
Meanwhile, the total premium revenues collected by the various health insurance companies providing health insurance under the Czech state healthcare system was lower in January by 4.75% compared with January 2009, reports Czech newspaper Lidove Noviny. The source reports the estimate of the head of the Czech Association of Health Insurance Funds, Ladislav Friedrich, that premium revenues in January were 800 million koruna lower than in January 2009. This is connected with the ongoing unemployment problem in the Czech Republic, which means that fewer people are able to make contributions to health insurance funds through premiums. The decline may not appear drastic, but it needs to be seen in the context of the fact that premium revenues in January 2009 were down by 11% year-on-year, and amounted to 2 billion koruna less than in January 2008, so there is a definite and consistent downward trend.
Health insurance premium revenues in the Czech Republic are thought to have declined in 2009 as a whole, although Friedrich emphasises that when the full details of premium revenues are published in February-March, the situation will be much clearer.
Health Insurance Companies Will Need to Use Reserves in 2010
Czech health minister Dana Juraskova has been quoted as saying that the only way in which the level of care in the Czech Republic will be maintained at its current level will be for the health insurance companies to make use of their reserves, collected in the years prior to the economic crisis. The reserves are expected to be sufficient to cover any shortfall in premium revenues in 2010, but in 2011, the reserves could be exhausted if the present trend of unemployment and the resulting reduction in health insurance premium revenues persists. Then there could be problems with providing healthcare at the present level, according to Marek Snajdr, the deputy Czech health minister, quoted by Czech news agency CTK.
Outlook and Implications
The Czech Republic has been much more generous in its reimbursement of expensive innovative drugs in the past few years, and there has been a significant increase in the number of patients treated, as well as the level of reimbursement of oncology drugs: the introduction of the system of fixed co-payments for items on prescriptions in 2008 resulted in an increase of 47% in the reimbursement of oncology drugs (and also multiple sclerosis drugs) through specialist oncology centres. However, following an increase of around 35% in spending at oncology centres in 2009, Czech cancer patients face a decline in expenditure in these centres of 7% y/y in 2010, albeit from a high base value (see Czech Republic: 18 December 2009: Czech Cancer Treatment Centres to Receive up to 7% Less Funding Y/Y in 2010).
With the situation in the Czech economy continuing to look precarious as unemployment in the country continues to rise, pressure on the Czech healthcare system is growing. The recent statement by Marek Snajdr that the Czech Ministry of Health is expecting drug reimbursement expenditure to fall by 2% y/y would suggest that if health insurance premiums continue to fall at the January rate, there will be a considerable gap between expenditure and income, and with the fixed co-payment system subject to widespread non-compliance in many regions outside the capital, Prague, revenues from these are also likely to be lower in 2010 (see Czech Republic: 2 February 2010: Update to Czech Drug Reimbursement List Includes Several New Innovative Drugs, Reimbursement Expenditure to Fall 2% Y/Y in 2010). Without a sufficiently sturdy revival in the Czech economy, it appears that the Czech healthcare system may face severe funding shortages in 2011; at the election scheduled to take place in June, it seems likely that the Czech Social Democrats will come into power, which is unlikely to bring an improvement in the situation, and could mean a reduction in the reimbursement of expensive drugs.Most Viewed Articles
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