Savings in medicines reimbursements and other Health Insurance Act amendments

The savings measures in force as of the beginning of the year 2016 will cut the medicines reimbursement expenditure of Kela, the National Insurance Institution, by about 80 million euro. These savings are part of the Finnish austerity measures. The savings are targeted both at medicine users and at the pharmaceutical branch actors.

Patient co-payment increases  

As of the beginning of the year 2016, Finland introduced a new initial patient co-payment of 50 euro applied to over-18-year-olds.

The patients’ medicines expenses will also grow through higher medicine purchase-specific co-payments. For medicines in the higher special reimbursement category, the co-payment per each medicine purchase is now 4.50 euro (3 euro before the increase). It will be 2.50 euro (1.50 euro) after the patient’s expenses exceed the annual ceiling of co-payments.

From the patient perspective, it is positive that the rate of reimbursement for medicines in the basic reimbursement category rose from 35 to 40% and the annual co-payment ceiling remained at about 610 euro.

At the same time, the patient medicines expenditure decreases through a tougher price competition among the generics (see below).    

The introduction of the initial patient co-payment and the increase of the basic reimbursement level reallocate the medicines reimbursements from those who need medicines only occasionally and to a minor extent to the patients whose medication expenditure is high.  

Pharmaceutical branch actors face many changes

The major savings measures targeted at the pharmaceutical branch actors include the following:

  • one-off payback imposed in 2016 on the industry and wholesalers
  • temporary increase in the pharmacy fee implemented in 2016
  • reimbursability of transdermal patches
  • obligation imposed on pharmacies to provide price advice to patients (expected to boost price competition)
  • reimbursable price of generic products at maximum 50% of the reimbursable maximum price of the innovative original product (former percentage 60%)

A complementary measure in force as of 1 July 2016, the reimbursable maximum prices of innovative medicines included in the reference price system are cut to a level of the reimbursable maximum price level adopted for the generics. This will not generate any savings to Kela but only cut patient expenses if the innovative medicine is not included in the price competition.

Changes in application procedures

The changes in the application procedure between the Pharmaceuticals Pricing Board PPB and the pharmaceutical companies entered into force already in September 2015. 

The former two-year waiting period for the application of the special reimbursement status was eliminated. It was a significant positive change to the applicant-PPB process. It removed a structural barrier from the application process. The elimination was an innovation friendly message in view of the objectives of the recent Life Science Strategy of May 2014 (“Growth Strategy of research and innovation actions of the Health Sector”). 

The practical implications of the change in the medicines reimbursement system remain minor because this requirement has become unnecessary as other application criteria have evolved. Research data and experience of use will be the necessary evidence for a special reimbursement approval, instead of the applicants focusing on the ticking away of a certain period of time. 

However, the applicant must still first apply for the basic reimbursement status, and only then for the special reimbursement status.

There were also certain changes affecting the applications for more extensive indications. The applicant must include the health economics report in the application for additional major new indications.  A “major new indication” has not been defined well enough in the legislation; therefore practical consequences remain to be seen. PIF is working on the issue.

The applicant’s possibilities to apply restricted reimbursability for a product was limited to cases where the patient’s estimated costs will exceed the annual ceiling of reimbursement costs. Restriction refers to narrow reimbursability compared to the SmPC’s scope. Earlier, there was a possibility to apply for restrictions also for cheaper products. The PPB may, however, decide themselves on restrictions for all kinds of products.

Other changes will develop the PPB’s decision-making process in line with the Medicines Policy 2020 principles. The work will be streamlined; for example, PPB will delegate more decisional powers to the Director in simple cases.

It remains to be seen in 2016 how these changes potentially accelerate the access to medicines.

Medicines savings continue – preparations for measures implemented in 2017 underway

In its programme adopted in May 2015, the Government of Prime Minister Sipilä decided to make 150 million savings in the Kela medicines reimbursement expenses in 2017. These savings constitute a part of the austerity measures taken to meet the public expenditure savings needs.

The sum of 150 million euro corresponds to about 12% of Kela’s medicines reimbursement expenses. During the budgetary discussions in the summer of 2015, a part of the aggregate savings was anticipated and implemented at the beginning of 2016. As a consequence, the sum to be implemented in 2017, is 134 million euro.

The Ministry of Social Affairs and Health has launched the preparations for the choice of measures as collaboration between the authorities and the branch actors. PIF is also involved in the preparatory work.

The objective is to agree on the medicines savings measures before the holiday season so that the necessary legislative amendments and the practical changes necessary for their implementation can be made in time.  Since the medicines savings are part of the 2017 State budget, the bill will be examined by Parliament as a budget act, to enter into force in January 2017.

The savings measures will mainly be among those improving the rational use of medicines as well as measures that boost price competition of generics as well as biological medicines. Other options raised include increased guidance of prescribing of medicines as well as a re-examination of the reimbursement categories.

The aim of Pharma Industry Finland PIF is, despite the savings need, to insist on the objectives and measures recorded in the Health Sector Growth Strategy, on the basis of which the branch can be one of the supports promoting the growth of the Finnish economy and generating new jobs.  Moreover, PIF's objective is to ensure the patients the medicines they need and to improve the treatment outcomes reached through medicines. Irrespective of the changes, Finland should continue to provide incentives for the pharmaceutical industry to develop new medicines.