Carving a more competitive and healthy pharmaceutical policy in Greece

The financial crisis has significantly affected health and medicine costs in Greece. During the period 2012-2023, following the trends of the European market, pharmaceutical spending increased by 65%, while public funding decreased by 23%. The significant decline in funding created a large gap that translated into huge burdens for the pharmaceutical industry, but also increased patient participation. The interventions of the State in the health sector were mainly focused on the rationalization of pharmaceutical expenditure through the implementation of cost containment policies, such as the reduction of drug prices, changes in reimbursement policy, increase in social benefits and the introduction of automatic reimbursement mechanisms (clawback ) and mandatory rebates. The last measure of mandatory refunds was used to cover the gap of the State.

In 2023, the total value of reimbursed costs, excluding patient contributions, is estimated at €6.4 billion. Of this expenditure, the government covered the smallest part (€2.8 billion), with industry paying back the remaining amount, €3.6 billion, through clawbacks and rebates. It should be noted that Greece has among the lowest drug prices in the EU and price increases are prohibited by law. Especially in the hospital environment, which is considered a completely controlled environment, the level of total reimbursements exceeds 70% of the total invoiced sales by pharmaceutical companies, endangering the viability of the industry, but also the introduction of innovative drugs for life-threatening diseases.

Diversification in government funding and the expansion of closed sub-budgets have caused significant disparities in drug reimbursement by channel, especially in relation to high-cost drugs and hospitals, which are the main distribution channels for innovative drugs.

As part of the Recovery and Resilience Fund (RESF) initiatives, the Greek State secured funding of 250 million euros for the years 2021-2023 and an additional 150 million euros for the years 2024-2025, with the aim of offsetting the clawback with productive spending and research and development (R&D) costs. This tool has proven to be ineffective for Clinical Trials, as 95% of funds go into production investment.

At the same time, according to the TAA, the Greek Government undertook to reduce clawback levels by 50 million euros in 2021, by 150 million euros in 2022, by 300 million euros in 2023 and by 400 million euros in 2024. In the event that this commitment is not met, the government will be obliged to add corresponding amounts to the pharmaceutical budget each year, with a total amount of up to 900 million euros.

The overall contribution of the pharmaceutical sector to the Greek economy is significant, but the clawback and rebate mechanisms are a significant financial burden for businesses in the sector. The total impact of the pharmaceutical sector on the Greek economy, in terms of GDP, is estimated at 6.2 billion euros (3.3% of GDP). The total contribution to employment is estimated at 108,000 jobs, while the impact on tax revenues from the activity of the pharmaceutical sector is estimated at approximately 1.7 billion euros. At the same time, over the past 11 years, SFEE member companies have contributed more than 18.1 billion euros through mandatory reimbursements, covering the lack of public resources and ensuring patients’ continued access to treatments

Actions 2024 and next steps

The Bank of Greece provides acceleration of the growth rate of the Greek economy for 2024 and 2025, and then a slight decline in 2026. More specifically, the growth rate of the Greek economy in 2023 is expected to be 2.4%, accelerating marginally to 2.5% in 2024 and 2025, and to decrease to 2.3% in 2026. This provision provides the Greek Government with the fiscal space it needs to invest in a sustainable health care, taking into account the needs of the Greek patient and the new innovative treatments entering the National Health System.

Furthermore, since the RRF (Recovery and Resilience Fund) funds will be completed in 2025 and from 2024 new fiscal rules will apply to all EU economies, there is an urgent need to ensure sufficient public funding.

Within the first month of his new duties, the Minister of Health announced a series of measures to support the pharmaceutical industry and reduce the gap between public pharmaceutical funding and the industry’s total mandatory reimbursements:

a) Committed to additional funding of public pharmaceutical expenditure.

b) Committed to proceed with the implementation of specific structural measures to control pharmaceutical expenditure through digital tools.

We expect the strengthening of funding from the State by €370 million for 2024, as announced by the Minister of Health. However, the reduction of refunds will only be possible if effective measures to control and limit demand are implemented.

SFEE has proposed the following actions:

• Maintaining stable public finance contributions after 2025 in order to fill the large gap while maintaining co-responsibility between State and Industry.
• Pursuit of convergence of returns between the three channels to an average return rate of 38% (2020 as base year).
• Increasing penetration of generics and biosimilars to finance innovation.
• Ensuring the introduction of new innovative medicines by establishing an additional Innovation Fund.
• Create and expand treatment protocols and patient registries and use digital tools to improve controls and increase the effectiveness of investments.
• Modifying the incentives for the clawback mechanism to make it more attractive for international companies to invest in clinical studies.
• The goal is the signing of a Memorandum of Cooperation between SFEE and the Government to ensure transparency, predictability and access to innovative treatments.

The road to a sustainable health and drug policy in Greece is complex, but the proposed actions are steps in the right direction. Collaboration between government and industry is essential to achieving sustainable solutions that will serve the needs of society and the economy.