A state within a state situation: the decisions of the Minister of Health are against Public Health and Entrepreneurship, forcing SFEE and its members to take legal action before the Council of State

Press release 16 September 2014

• Public health at huge risk – Entrepreneurship in an impasse

• The State unloads on the pharmaceutical industry the burden of vaccination costs and coverage of the uninsured.

• The State decides without any consultation with the industry and legislates against entrepreneurship

• Total disregard for any notion of justice, lack of transparency and will to reach an understanding, and non-compliance with legislation

THE DEMANDS OF THE INDUSTRY

The members of SFEE call on the Government to urgently reset the amount of pharmaceutical expenditure at the minimum permissible limit of €2.3 billion for the pharmaceutical budget and €700 million for the pharmaceutical costs of public hospitals, warning that the consequences of poor pharmaceutical care provision for Greeks will be enormous and unfortunately unpredictable. In addition, they call on the Ministry of Health to proceed immediately to the following:

1) Correction of wrong prices (below the average of the three lowest prices in the EU-28) of medicinal products and application of the pharmaceutical pricing legislation in force.
2) Ensuring that the claw-back for an overrun of pharmaceutical expenditure cannot exceed €150 million for 2014 and a level equal to 2% of the annual target from 2015 onwards, subject to the verification of such overrun and implementation of the necessary structural reforms.
3) No further unfair rebates that would add to the already unsustainable amount of over €400 million.

LEGAL ACTION

As a follow-up to the Extraordinary General Assembly Meeting of SFEE held on Friday, 12 September, and in response to the numerous violations and non-transparent practices, SFEE and its member companies have decided to take legal action, in order to ensure the smooth supply of medicines in the market and protect public health and viable business activity. This action will take the form of an appeal before the Council of State to annul:
• the Price Bulletin dated 12 August 2014, on the grounds of erroreous application of provisions on pharmaceutical pricing;
• Ministerial Decision DYG3 / GL oik. 70519 / 08.18.2014 requiring pharmaceutical companies to pay a rebate equal to 50% of the difference between the social security price and the retail price of a medicinal product (patented or not) for which no generic exists;
• Ministerial Decision GP / oik 61771 (Gov. Gaz. B 1907/07.15.2014) in respect of its provision prohibiting any price increases after a price revision, as well as its provision stipulating that, for determining pharmaceutical prices, EOF shall consult various official sources which do not make comparable data available and are inaccessible to pharmaceutical companies.

It should be noted that SFEE has already lodged an appeal before the Council of State against Ministerial Decision GL / oik 56432 / Gov. Gaz. B / 1753/2014 which requires the industry to cover the pharmaceutical costs of the uninsured and against Ministerial Decision 52768 / Gov. Gaz.  B / 1796/2014 concerning the minimum percentage limit on the prescription of active substances insofar as this is relevant to the prescribing targets of physicians.

The President of SFEE, Mr. Konstantinos Frouzis, stressed in this regard: “The snap decisions on pharmaceuticals policy, made under pressure ahead of the Troika visit, show that the Government continues on the beaten track of cash-collecting practices, pursuing short-term numerical targets. Its arsenal comprises across-the-board rebates and claw-backs, without any political will to implement reforms. Health is too crucial for the Government to play or experiment with, thereby ruining business activity and discouraging investment in our country, but above all condemning Greek citizens to poor health and reducing them to second-class European citizens. Against this background, we are determined to seek justice in order to secure the minimum and the essentials, and first and foremost the rule of law itself.”

ERRORS IN PRICING

With specific regard to the pricing of pharmaceuticals, Mr. Nikos Kefalas, SFEE’s Vice President and responsible for pricing issues, said that the law governing the pricing of pharmaceuticals is complicated and very hard to apply correctly, which ultimately leads to errors in pricing, privileged treatment and clientele relationships, and patent infringements. As Mr Kefalas stated, “… we witness a total disregard for any notion of law and failure to comply with legislation; as a result, several members of SFEE have filed numerous objections against the Price Bulletin of 12 August 2014. Errors have emerged that are associated with the use of unreliable sources (Euripid) or with the legal basis of products (e.g. originator products without a generic have been priced as off-patent products), while there are also errors in package conversions, etc. Most importantly, the Ministry is repeatedly in breach of the pricing rule on the basis of the average of the three lowest prices in the EU, and only follows this rule in a biased and selective manner whenever its application would lead to a price reduction. This has pushed the prices of more than 270 product codes down, to below the average of the three lowest prices, while at the same time, contrary to relevant EU legislation, price increases are not allowed.”

It should be noted that the accumulation of errors in the pricing of pharmaceuticals affects also other EU Member States that use Greece as a reference country. This poses a risk that innovative medicines will be withdrawn from the Greek market and Greek patients will not have access to them. The country has nothing to gain from this arrangement, unlike what is the case in all advanced countries, which save from generics and invest in new treatments.

INTOLERABLE ACR.SOSS-THE-BOARD MEASURES

The Vice-President of SFEE, Mr. Paschalis Apostolidis, said that the pharmaceutical industry has a duty to support of Greek society, but has no inexhaustible reserves of patience when it sees that the State treats patients as an accounting item and companies as “sponsors” of its own inadequacy, adding that: “Against this backdrop, we have to realistically face up to the major problem of having more than two million of our fellow citizens without access to social security. This is one of the most serious side-effects of the crisis and is of a dual nature, economic and social. By ruining entrepreneurship withonerous taxes and quadruple claw-backs, thus creating more jobless and leaving the uninsured to their fate, this stance essentially turns the Welfare State into a Punishing State!”

Is should also be noted that given the ill-advised budget of €2 billion, the companies in the industry will incur a clawback of over €400 million, which represents an increase of 30% over the last two years in the percentage return that the pharmaceutical industry is expected to pay to make up for an inadequate budget. And while this only serves to prove once again the inability of the existing budget to cater for the needs of the insured, the new ministerial decision channels €340 million from that budget into care for the uninsured, without having first attempted to rationalise other costs that can unlock significant resources.

A HEAVY BBLOW TO EMPLOYMENT AND INVESTMENT

Finally, Mr Marios Kosmidis, Member of the Board of Directors of SFEE, said that all these things lead to a lack of stability, which along with the opaque practices of the Government lead both Greek companies and subsidiaries of multinational pharmaceutical corporations to divest, with strongly negative repercussions on employment and, ultimately, growth in our country.

Resolution of the Extraordinary General Assembly of SFEE Members

Press Release of SFEE’s Extraordinary General Assembly