Pharma Company Contributions to Vulnerable Groups Reimbursement Fund Proposed As Lithuanian Drug Reimbursement Down 5.7% Y/Y in 2011

VLK Proposes Fund to Allow Companies to Contribute to Reimbursement Costs

The Lithuanian National Health Insurance Fund (VLK) has presented a proposal according to which pharmaceutical companies would be able to transfer money to a fund that would be used to pay for co-payments for medicines for socially vulnerable groups, reports Lithuanian newspaper Lietuvos Rytas. The source reports that individuals in these groups would be issued with a card that would entitle them to receive reimbursement under the aforementioned fund. The proposal has been discussed by the Lithuanian government, and has now been deferred for two weeks.

Lithuania's health minister, Raimondas Šukys, is reported as saying that the administrative costs of the card will be considered, while the question of which pharmaceutical companies would be willing to participate in the project would also be considered. Šukys is reported as saying that one company—wholesale pharmaceutical trading company GlaxoSmithKline Lithuania—currently runs a discount card system for certain social groups, under which it covers a share of the cost of reimbursed drugs. The legal amendment proposed would make it possible for other pharmaceutical companies to make transfers of funds to the VLK, and for a single discount card to be set up, according to Šukys, quoted by Lietuvos Rytas

Drug Reimbursement Down 5.7% Y/Y in 2011

Lithuania's Compulsory Health Insurance Fund (PSDF) spent a total of 621.2 million litas (USD222.1 million) on the reimbursement of medicines and medical devices in 2011, representing a reduction of 4.9% year-on-year (y/y) compared with 2010, it reports. The total spent on drug reimbursement by the PSDF in 2011 was LTL572.8 million, a reduction of 5.7% y/y. Contrastingly, the PSDF's reimbursement of medical devices was up by 5.5% y/y in 2011, to LTL48.4 million.

Prescription Numbers Up, Co-Payments Down

The number of prescriptions issued under the PSDF amounted to 11.7 million in 2011, a slight increase on the 11.6 million issued in 2010.The total spent by Lithuanian citizens on co-payments for reimbursed medicines went down by 8.3% y/y in 2011 to LTL148.6 million. This follows on from a significant reduction in the amount paid out in the form of co-payments during 2010, when the total dropped by around one-third.

Medicine and Medical Device Reimbursement to Rise in 2012

Regarding the planned budget for the reimbursement of drugs and medical devices in 2012, Lietuvos Rytas reports that it will rise by 2.54% y/y to LTL637 million, although it is not specified by how much drug reimbursement is to increase. Looking at the whole PSDF budget for public healthcare provision in 2012, this is due to decline by 4.37% y/y to LTL3.986 billion, according to Lithuanian medical news provider E-Medicina.

Outlook and Implications

Having implemented a number of important pricing and reimbursement (P&R) regulations in 2008–10 in response to the economic crisis, which brought about a 6.2% reduction in reimbursement spending in 2010, the Lithuanian authorities are continuing to seek more means by which they can keep reimbursement spending under control. By setting up a fund through which pharmaceutical companies could contribute towards reimbursement for vulnerable groups, the potentially thorny issue of price cuts would be evaded, and pharmaceutical companies would also benefit from a positive public relations boost, as they would be seen as supporting the less financially strong sections of society.

Looking at the trend of pharmaceutical reimbursement spending by the PSDF, 2011 is a continuation of the downward trend seen in 2010, spurred by changes to P&R regulations, including lower entry prices for first-to-market and subsequent generics, stricter rules on prescription by international non-proprietary name, and the introduction of price-volume agreements (in 2008). The fact that the number of prescriptions issued increased while spending on prescription drugs fell is an indication of how the policies have worked to push prices down and focus reimbursement on cheaper medicines. Clearly, this has also worked in favour of citizens, whose co-payment levels continued to fall in 2011.