Greek pharma boss: ‘We reached our limits, our sustainability is at stake’
Interview of Mr. Olympios Papadimitriou, President of SFEE in Euractiv.com, December 4, 2018
The Greek pharmaceutical industry has reached its limits due to a number of “unreasonable” burdens imposed by the government during the crisis, Greek pharma chief Olympios Papadimitriou told EURACTIV.com in an interview.
“With these unreasonable and devastating burdens, with a total absence of stability and predictability that discourages any thought of investment and we have reset the hourglass of our survival. The sustainability of pharmaceutical companies is at stake, threatening 86,000 jobs,” he said.
Olympios Papadimitriou is the president of the Hellenic Association of Pharmaceutical Companies.
He spoke to EURACTIV’s Sarantis Michalopoulos.
Last August, Greece exited the bailout after almost eight years of austerity. What is the state of play in the healthcare sector?
Austerity in health continues as the logic of closed budgets is extended by 2022 via legislation. The medicines sector underwent an unprecedented shrinkage in the years of the memorandums. The Greek state has a total budget of only €2.5 billion (ie €1,945 billion for the National Organisation for Healthcare Services Provision-EOPYY and €530 million for hospitals) through a closed budget that was arbitrarily determined and not taking into account the actual needs of patients.
Pharmaceutical spending has fallen by 60% compared to 2009, while the number of hospitalised patients has increased by 31% and the needs of patients (including uninsured, refugees and immigrants) are rising rapidly. The public pharmaceutical expenditure per capita in our country is €181, while in the countries of the European south it is €242 and in the EU, in general, is €292 euro.
The drastic reduction in pharmaceutical spending in recent years has not affected patients’ access to their treatments because pharmaceutical companies through clawbacks and rebates have absorbed all of its excesses.
By adopting a “closed budget” rationale, the Greek state believes that it can thus maintain the sustainability of the system while simultaneously relinquish its responsibilities for institutional reforms that will control consumption and stabilise spending. This is a big mistake that if it’s not corrected in time, it can bring about irreversible consequences.
How has the pharmaceutical industry in the country been particularly affected during the crisis and what are your next steps?
We are the main pillar of financing the healthcare system, contributing to 1/3 of pharmaceutical expenditure (only in 2017 we returned €1.2 billion to the state), whereas this year (2018) this amount will be close to € 1.4 billion.
We have reached our limits. With these unreasonable and devastating burdens, with a total absence of stability and predictability that discourages any thought of investment and we have reset the hourglass of our survival.
The sustainability of pharmaceutical companies is at stake, threatening 86,000 jobs, directly and indirectly, supporting the industry and creating conditions for disinvestment. The sector, which has made a significant contribution to the economy and is also the third country’s export power, is dealt a severe blow as well as the good functioning of the public health system and the access of patients to the drug that is needed.
Regarding our next steps, we will try to reconcile with the State a medicine policy that will support the sustainability of companies and ensure that patients have unhindered access to life-saving medicines.
That means rationalisation of public pharmaceutical expenditure based on the actual needs of the population and the trends in their evolution; Structural reforms to reduce waste and control the volume of prescription to reduce the unfair and arbitrary imposition of retroactive returns; Co-responsibility with the State, ie to put a limit on what companies cover and what the State. This is a measure that clearly supports the sustainability of the system since the sharing of responsibilities ensures the will for changes and controls by all parties involved parts.
Clawback is a measure that has been in place in many European countries, but the Greek pharma sector fully opposes it. Why is that?
Compulsory refunds in the form of clawback are the result of the imposition of a closed budget which, once overcome, calls upon the partners who form it to return the amount of the excess.
The first reason is that in Greece the only one forced to return the budget excess is the pharmaceutical industry. Is it solely responsible for it? Some people seem to think so, but that is not the case. Even the state has a responsibility considering that it does not set a budget based on real needs.
The second reason is that while the closed-budget logic is to act as a “safety net” in exceptional cases where actual pharmaceutical needs are not covered by available resources, in Greece we apply it with the logic “I will consume whatever products I need and I will only pay as much money as I want.” Can you think of operating a shop where someone is coming and buying as much as he wants but pays what he thinks he should pay? How long would this store survive?
The percentage that pharmaceutical companies contribute to pharmaceutical spending in Greece through clawback and rebates is growing every year at a fast pace and is now really high, 3.5 times above the European average. Only from clawback, the state has received over €3 billion from pharmaceutical companies within 6 years, and if mandatory rebates are added, the amount exceeds €5 billion.
The excessive amounts of clawback and rebate threaten the viability of the industry, drive companies into gradual disintegration and “cut” investment in research and clinical studies. At the same time, conditions for the development of new drugs are deterrent.
However, the government has made a number of reforms. Would you say that health in the post-bailout era is a big chapter in the plans of the State, private initiative and other actors?
Indeed, important reforms have been made in the right direction. It is, of course, too early to evaluate the results, and they have not all been fully implemented, and we should note that they are developing slowly. There is certainly a need for other structural changes and, of course, the cooperation of all the actors involved is of great importance.
Health is definitely of interest to the state but also to private initiative. The issue is the first to view the second as an ally and not as an opponent. This is the road to the future.
We are allies of the government in the effort to ensure a durable and sustainable health system and we have proposed to sign a Memorandum of Understanding with the relevant ministries. A typical example is Portugal, where the pharmaceutical industry signed a Memorandum of Understanding with the Ministries of Finance, Development and Health.
Do you agree with the argument that the powers of the European Commission should be strengthened with regard to health and pharmaceutical policy? Could this lead to a more effective overall approach at EU level?
The EU’s role in health is key and more initiatives should be taken centrally. Clearly, responsibility for the organisation and delivery of healthcare lies with the national health systems of the member states, but they need initiatives at the supranational level to enable national health systems to cope with global challenges, for instance, pandemics, chronic illnesses and consequences of increasing life expectancy in healthcare systems.
Patients throughout Europe live longer, healthier and more productive, thanks to the innovative medicines developed by pharmaceutical companies. In the next decade, cutting-edge science will change even more the prospects of patients. With more than 7,000 drugs in the development phase for a wide range of illnesses, an exciting new wave of medical innovation is expected to play a decisive role in addressing the challenges faced by patients and health systems.
It is a great challenge for European health systems to be able to absorb all this innovation. It is worth mentioning that this wave of innovation could not exist if the existing IP system and incentives were not in place currently under legislative review at the initiative of the European Commission.