Higher Health Spending in Italy Envisaged in 2010–12 Finance Act, Round Table on Regional Pharmaceutical Financing Planned

An agreement has been made between the Italian federal state and the regions, referring to the measures in the Finance Act for 2010–12 concerning healthcare, reports pharmacy news provider Farmacista 33. The Finance Act envisages that the total to be allocated in healthcare from state funds in the Italian regions in 2010 will be 104.614 billion euro (US$154.4 billion), which is an increase of 584 million euro when compared with the previous amount planned for 2010. For 2011, the total to be allocated to the Italian regions for healthcare from the central budget will be 108.6 billion euro, which is 419 million euro more than previously envisaged. In total, spending on healthcare is going up by 1.6 billion euro in 2010, and by 1.7 billion euro in 2011, according to information quoted by Italian news agency ANSA. Spending on healthcare in 2012 is envisaged to increase by 2.8% compared with 2011.

Stricter Measures Planned for Regions in Deficit

Under the proposals in the Finance Act, regions that run up a deficit in healthcare provision that is equal to or more than 5%, and do not present plausible plans on how they plan to reverse this deficit, are at risk of incurring an increase of 0.15% in the regional tax on productive activities, and an extra personal income tax of 0.3%, reports ANSA.

No More Direct Cost-Containment Measures for Pharmaceuticals Envisaged

The Finance Act does not envisage any new cost-containment measures for pharmaceuticals. However, it is emphasised in the act that the drugs covered by the measures introduced earlier in 2009, reducing the price of generics by 12%, are only those that do not have a valid patent on the active ingredient. The measures, introduced as part of the response to the Abruzzo earthquake, were centred around a 12% reduction in generics prices, of which 56% is borne by pharmaceutical companies, and 6.65% by wholesalers, with wholesalers and pharmacies bearing the remaining 8% of the costs. The regional pharmaceutical expenditure ceiling was also dropped from 14% to 13.6% for all spending on pharmaceuticals under the Italian national health service (see Italy: 21 July 2009: Series of Measures to Cut Drug Spending Introduced in Italy, Funds to Be Redirected to Earthquake Region).

Regional Round Table on Pharmaceutical and Medical Device Spending Planned

As well as more strict monitoring of healthcare expenditure in general, the Finance Act also envisages the establishment of a regional round table, involving central government and the regions. Italian political and economic news provider Civis Online reports that the round table will put together a proposal within the next 30 days, to be based on the following guidelines:

• To define means and methods of governing and controlling hospital pharmaceutical spending
• For the Italian Pharmaceuticals Agency, AIFA, to guarantee the supply of information on regional pharmaceutical consumption
• To review existing guidelines on the use of off-label medicines
• To monitor pharmaceutical expenditure and develop proposals for ways to ensure it is maintained within the ceiling.

Outlook and Implications

At this stage, the Finance Act still has to receive final approval, and will also come before the senate again. Therefore, there could be some changes to the measures contained within it. The increase in the planned level of spending for 2010 and 2011 reflects the more positive data emerging at the moment concerning Italy’s economy, although the increases are still relatively modest.

In terms of consequences for the pharmaceutical industry, it would appear that the changes envisaged under the measures introduced to divert money to the Abruzzo reconstruction effort will be kept in place. Any reduction in profitability incurred by generics producers as a result of this may be made up for by the increase attractiveness of generics due to their lower price, especially at a time when generics are becoming much more widely used in Italy, and the perception that they are inferior to originator drugs is slowly fading away.

The establishment of a round table to help control regional spending on pharmaceuticals and medical devices is certainly a measure through which the Italian government aims to keep pharmaceutical spending low, via more effective and stricter monitoring. This follows AIFA's establishment of a number of other working groups focused on monitoring access to medicines in the country during 2009; all of these are moving towards the same goal—the maximum efficiency of the use of public funds for drug reimbursement (see Italy: 8 July 2009: AIFA Establishes Working Group to Monitor Access to Medicines in Italy). How successful the round table will be in bringing regional spending under control is open to question, considering the significant differences between the regions and their approach to healthcare.