Changes to Regulations on Setting Drug Prices in Romania Favour Generic Producers

Romania's ministry of health (MoH) has announced changes to the regulations for the setting of drug prices in the country, which will update the most recent changes implemented in April 2009. Most significantly, the changes will mean that the price of generics being introduced on to the Romanian market will have to be no more than 70% of the price of the originator product, rather than 65%, as previously. Provision is made for biosimilars in the new regulations, and it is stipulated that biosimilars must be priced at no more than 80% of the price of the original biotech product. There are also new regulations to be introduced regarding the international price referencing system.

Changes Expected to Result in Increase in Drug Prices

The changes are predicted by head of the Romanian Association of International Medicines Manufacturers Dan Zaharescu to result in a 5% increase in the price of drugs in Romania, reports Romanian economic news provider, Wall Street. The exchange rate at which the price of drugs is to be calculated is expected to be between 4 lei (US$1.42) and 5.25 lei, which would result in a rise in the price of drugs for Romanians if there is any sharp drop in the value of the lei, the source reports.

Outlook and Implications

The changes in regulations concerning the setting of the price of generic drugs are a response to the criticism levelled at the Romanian MoH for the system that is currently in place, which has resulted in an increase in parallel-trade activity, as the prices of generics in Romania fall to a level that is lower than in a number of surrounding countries (see Romania: 3 November 2009: Romanian MoH Plans Changes to Increase Price of First-to-Market Generics). The very low price of generic drugs, which make up the vast majority of drugs provided under the Romanian health insurance system, has also been one cause of the problems of pharmacies and pharmaceutical distributors in the country, who have seen their profitability severely dented as a result.

The establishment of a new exchange rate at which the price of drugs will be calculated is likely to be a cause of relief for international companies selling their products in Romania. Many international companies have incurred considerable losses to their profitability as a result of the current regulation that means the price of drugs is calculated on the basis of an exchange rate of 4 lei to the euro, whereas the rate of the lei has been closer to 4.25 euro in recent months.

Meanwhile, although the changes are expected to stabilise the pharmaceutical market in Romania, there are concerns that the price of some drugs could rise excessively, with increases of as much as 217% for some drugs predicted by experts, reports Romanian news provider Gardianul. Moreover, the Romanian budget for healthcare in 2010 looks far from sufficient, and there are concerns being expressed by opposition politicians in the country that money for healthcare will run out by July (see Romania: 6 January 2010: Romanian Health Minister Sets Out MoH's Plans for 2010, Only Slight Increase in Spending Planned).