Pharmaceutical pricing and reimbursement reforms in Greece

Abstract

Pharmaceutical price regulation in Greece is centralized. The National Drug Organization (EOF) is the main regulatory authority functioning under the auspices of the Ministry of Health and Social Solidarity. In 2004, total pharmaceutical expenditure in Greece reached the level of 2.9 billion euro, of which 77.9% were public expenditure and the remaining 22.1% private. According to Organization for Economic Cooperation and Development (OECD) data the total per-capita expenditure on pharmaceutical care in Greece is among the lowest in Europe, representing 58% of the EU-12 average. In 1998, Greece introduced a reimbursement list, and the lowest reference pricing system among the 15 European Union member states with the purpose of controlling the growth of pharmaceutical expenditure. The measures proved to be ineffective since pharmaceutical expenditure, after a short-term reduction, continued to increase at similar rates to those before the introduction of price control mechanisms. The average annual increase of pharmaceutical expenditure in Greece over the period 1998-2003 was 7.9%, which is among the highest in the OECD countries (average 6.1%). New pharmaceutical legislation, no. 3457, was enacted on May 8th 2006, aiming at greater access to medicines, improvements to citizens' quality of life, effective and efficient utilization of health resources, transparency in public management, protecting public health, and maintaining long-term financial viability of the insurance system. The innovative aspect of the new legislation is the abolition of the positive list and the establishment of a rebate system granting the National Insurance Funds a rebate rate paid by the pharmaceutical companies. The purpose of this paper is twofold. First to assess the effectiveness of the positive list introduced in 1988 in Greece, using simple econometric models. Second to present the recent pharmaceutical reforms aimed at the introduction of a rebate system and establishing reimbursement pricing based on the average of the three lowest European prices.