KEFEA’s position on the drugs pricing system

The Cyprus Association of Research and Development Pharmaceutical Companies (KEFEA) expresses the belief that the change in the pricing policy for medicines, as has been approved by Cabinet, ensures, under the circumstances, the continued availability of the majority of medicines on the Cypriot market.

KEFEA considers that the updating of prices every two years is a very reasonable endeavor in the case of Cyprus. A review on a regular basis ensures that local prices reflect the price movements in the reference countries. This provision is included in existing Cypriot legislation, but it has not been effectively implemented in recent years. KEFEA also reiterates its firm position that the current ‘basket’ of reference countries, which are taken into consideration for the setting of prices in Cyprus, is representative of the socio-economic situation of our country. However, the price of medicines in the private sector is determined by four factors: factory price, the profit margins of the distributors, the profit margins of pharmacists, and VAT.

The implementation of the new pricing policy without the simultaneous introduction of a National Health System will lead to a significant reduction in the incomes of KEFEA members. Although at the present stage, the Association gives assurances that no problems will arise to hinder patients’ access to the majority of drugs through the private sector, it expresses deep concern about the serious problems and weaknesses present in the existing health system. Though this system creates conditions of relative proficiency, it also causes inequalities and prevents the introduction of new, innovative medicines. In most European countries, there is no separation of the public and private sector, and medicines are quickly included in prescriptions, the population as a whole has access to them, and prices are controlled.

KEFEA stresses the need to improve the import and supply of medicines in the public sector since the inequality which exists between the two sectors – private and public – is enormous both in terms of the excessively large number of patients requiring certain drugs, and in terms of the very limited new drug options available in the public domain. The final solution can only come through the implementation of a National Health System.

Finally, with regard to the government’s decision to review and evaluate the implemented pricing policy every four years, KEFEA supports that any amendments must be made following discussion with all stakeholders. However, reviewing any new pricing system in the near future should be done in conjunction with the introduction of a National Health System and should not be treated as a separate issue. KEFEA therefore questions the timing of the first pricing policy evaluation in 2013 as there’s no evidence of true political decisions on this topic in the near future let alone implementation.