The decisions brought at the cabinet meeting on 17 May are going to have very serious effects on the Hungarian pharmaceutical industry.
The aim of the cabinet meeting was to finalise plans to restructure the drug price subsidy system and submit them to the government. The changes affecting the system can be summarised in the nine points below:
1. Increase of the special tax to be paid on subsidised turnover from 12% to 20%. This entails a reduction of profit for manufacturers.
2. Doubling of the fee to be paid per medical representative. Since 2004 a registration fee of HUF 5 million has had to be paid by pharma distributors for each person engaged in drug promotion activity. This fee is now being increased to HUF 10 million per representative per year.
3. The list of medical representatives will be available on the authority’s website (more stringent registration system).
4. Regulation of undesirable pharma commercial influence: instead of the current HUF 25 million, a fine of HUF 500 million may be imposed on any manufacturer who breaches the ethical rules in force.
5. Tightened control of pharmaceutical industry events (conferences, congresses, etc.).
6. Review of subsidy volume contracts.
7. Promotion of the enhanced role of generics.
8. Establishment of a preferred reference price band. Manufacturers who agree to a substantial discount will receive the opportunity to distribute greater volumes of their products within the framework of public health care in exchange.
9. Introduction of subsidy linked to real effectiveness for a given drug.
The decisions reached at the cabinet meeting are going to have a major impact on the lives of the drug manufacturing and distribution companies operating in Hungary. Further realignments in the industry (generic vs. original manufacturers) and reductions in medical representative headcounts are anticipated.
Drug distribution, however, will not come to a halt. Manufacturers and commercial representative offices will be forced, by rationalising their prices and headcount, to engage in more targeted and efficient communication.
Ventiv’s knowledge and 16 years of pharmaceutical industry experience provide each partner with the cream of the crop in order to tide over the obstacles of the changed market situation. Through our labour outsourcing/lending and Sales Force Outsourcing services, we provide market players a stable source of support in solving their HR tasks.
