KEFEA’s position on the drugs pricing system

April 5, 2012

With respect to the latest public discussions regarding the pricing system for medicines, and the referencing of Cypriot drug prices being significantly more expensive when compared to the prices in Greece, the Cyprus Association of Research and Development Pharmaceutical Companies (KEFEA) would like to clarify the following:

Every country chooses and implements its own pricing systems. The primary reason for selecting a particular system is to ensure availability of medicines throughout the country. We believe, the system the Republic of Cyprus has chosen and implemented ensures under the current circumstances the availability of the majority of medicines to the private sector.

The prices of medicines throughout all European countries differ, just as the income per capita for citizens of these countries differ despite efforts for equation. It is important to note that with respect to the recent discussions, Cyprus’ private sector prices are being compared to the prices procured by national health systems in other European countries; these are two very different things which cannot be compared.

In most European countries there is no distinction between private and public sectors. The medicines are added quickly to the national formulary, the entire patient population has access to them and prices are controlled. The current system in Cyprus may ensure availability but it also creates inequalities and creates obstacles for the induction of new innovative medicines both to the private sector because these medicines are more expensive but also in the public sector for on a continuous basis all efforts are hindered for various reasons.

The various tables comparing retail drug prices for Cyprus and Greece that have recently been published are not completely accurate and they do not reflect the real

differences that exist in the pricing systems.

With regards to Greece; the price cuts to medicines in the last two years are the result of the critical financial situation of the country. It must be mentioned that the per capita cost for medicines based on the current specific prices is still approximately 30 percent higher than that of Cyprus, reflecting the relative economic opportunity of the Greek Pharmaceutical Market.

Any comparison of the Cyprus private sector drug prices to that of Greece will result in a significant undermining of the quality and possibly of the availability of pharmaceutical care with consequences for the entire healthcare in Cyprus.

If there is something that needs to be improved it is the way medicines are procured and distributed within the public sector. The inequalities that exist in the public sector with respect to the private sector are considerable; there is a huge amount of

patients and drug usage in the public sector with very restricted access of innovative medicines that are available in the private sector. This is why KEFEA is a strong supporter of the implementation of the NHIO that should dissolve these inequalities and allows access to innovative medicines for all Cypriots against fair prices.

Despite the fact that KEFEA believes that drug prices should be determined via Health Technology Assessments using Cypriot data or be based on similar data from other countries with specialized know-how, KEFEA recognizes the limitations of Cyprus in this sector, KEFEA does not oppose the usage of a reference pricing model that correlates drug prices in Cyprus both in the private and public sector against European countries that share the same socioeconomic environment. Cyprus IRP methodology is based on the 2 average priced countries in Europe, 1 expensive country and 1 low priced country in Europe. This by default leads to the average EU drug prices for Cyprus that reflect the economic and social position of Cyprus.

KEFEA is in communication with the Ministry of Health, the Health Insurance Organization and other related organizations in Cyprus. Taking into consideration the government’s financial restrictions KEFEA supports proposals that will drastically change the drug pricing system and that will guarantee the access of new innovative medicines to all Cypriot patients.

Additionally KEFEA commits to provide any support available at a European level to help the Cyprus authorities in the efforts to create a better National Health System.

Cyprus Association of Research and Development Pharmaceutical Companies (KEFEA)

The Cyprus Association of Research & Development Pharmaceutical Companies (KEFEA) was founded in 2006 as the representative body of multinational pharmaceutical companies in Cyprus. Its members are Astellas Pharmaceuticals, GSK, Lilly, MSD, Novartis, Pfizer, Sanofi-Aventis and Janssen, altogether employing more than 140 people in Cyprus. It is a member of the European Federation of Pharmaceutical Industries and Associations (EFPIA). KEFEA’s mission is to provide Cypriots with quality healthcare and access to new medicines. Its objectives are to ensure uninterrupted access to medicines at reasonable prices in the Cyprus market, given the acknowledgement of budgetary constrains, provide scientific educational information on diseases and treatments to healthcare providers, ensure that European objectives regarding high healthcare standards are implemented in the Cyprus market, and comply with a common code of ethical practice.