Reform will lower prescription prices, save up to NIS 200m.
High-priced prescription drugs will soon become 5% cheaper, thanks to simplification of the mechanism that controls their maximum permitted prices. This will lead to savings of NIS 150m. to NIS 200m., the Treasury and Health ministries announced.
“This is an additional step to reduce the cost of living and make health more accessible to the public,” Finance Minister Moshe Kahlon said. “This change is part of a series of steps we have taken in the past three years to strengthen the public health system/”
In the past two years, the ministries have been working on implementing a reform in the mechanism for determining the maximum prices of prescription drugs. Joint staff work included formulating recommendations by an inter-ministerial team, conducting several hearings and consultations with the field and holding half-a-dozen meetings of the price committee.
The committee carried out international reviews and consultations with representatives of health funds and the pharmaceutical companies. It decided to revise the drug price-control model to bring down the prices of expensive prescription drugs and increase the supply of inexpensive medications. The committee’s recommendations include tightening the supervision and regulation and the level of control over generic drugs in which there is competition in the market. The changes will halt the continued erosion of individuals’ co-payments collected by the health funds, the Treasury said.
Until now, drug prices have been determined according to the average price of the products in Belgium, Hungary, Spain and France, or according to the price of a Dutch retailer, whichever is lower. If there is no compatible product in any of the above countries, the maximum price per retailer is determined by the average retail price in UK and Germany. If no price is found for the drug by means of a bid in any of the countries, the producer sets a maximum price; thereafter the drug has been subject to supervision under Chapter 6 of the Supervision Law.
Under the new model, prescription drugs will be divided into two groups according to the level of competition: Group A will include generic and original preparations with competition. Group B will include those drugs of which there are no generic versions. Requests for price increases will be handled under different supervision rules and according to the average of the three cheapest countries among the seven.