Pharma industry stakeholders are generally quick to suggest that the Czech Republic is one of the most over-regulated markets in Europe, with new or innovative therapies facing significant delays before being able to enter the market.
While the timelines are still outside the defined framework, the situation is much better than it was before and continues to improve further
“Compared to Slovenia, Slovakia or Hungary, the regulations involved in permitting access to innovative therapies in the Czech Republic are very complex” comments Martin Minarovič, country director for Janssen.
For companies to overcome this barrier, they must first engage in a dialogue with the State Institute for Drug Control (SUKL). Emmanuelle Boishardy, general manager of GSK, agrees that “the market access process takes a long time, and it is difficult to predict the outcomes of assessments as SUKL lacks transparency.” However, Boishardy adds that “we can already see a lot of effort being made by SUKL.”
Ipsen’s VP for Central Eastern Europe Patrick Zachar also feels that there have been “significant improvements particularly over the last couple of years” in terms of the discussions that companies can engage in with SUKL, adding, “this has led to an improved and more predictable overall process with fewer bottlenecks.” Minarovič notes that “while the timelines are still outside the defined framework, the situation is much better than it was before and continues to improve further.”
Following approval from SUKL, companies must then negotiate with the seven insurance companies on an individual basis, as reimbursement is fully funded by them. The General Health Insurance Company (VZP) is the biggest, covering around 60 percent of citizens, while the other six share the remaining 40 percent.
Takeda’s Kieran Leahy, general manager for Czech Republic and Slovakia, explains, “the current health technology assessment (HTA) process was not built for the portfolios pharma companies have now. It was built to assess treatments for thousands of patients that cost tens of euros, such as cardiovascular or diabetes medicines. We now have treatments for tens of patients that cost thousands of euros.” Minarovič concurs, adding that “the main bottleneck is now the negotiation process with payers and budget caps.”
In response, VZP has committed to invest CZK 14 billion (USD 581 million) in modern treatments in 2020, a 12 percent year-on-year increase and 28 percent increase compared to two years ago. David Šmehlík, VZP’s deputy director emphasises “we want to improve access to modern treatments, thus increase investments every year in this area.” While insurance funds are increasing their budgets allocated to innovative therapies, the process remains difficult and lengthy.
The Czech Republic’s reference pricing system, where reimbursement is set based on the lowest price in the EU, adds another layer of complexity to the already lengthy market access struggle. Drugs sold in the Czech Republic are, on average, priced 30 percent lower than the EU average. Sanofi’s country chair Paul-Francois Cossa sees this as a severe limitation to Czech patients’ access to innovation. “Strong price pressures limit our room for manoeuvre in launching innovative therapies while creating value for the company, especially considering the complex business model pharma companies have to navigate,” he posits.
GSK’s Boishardy agrees that there is a balance that global firms have to consider. “Volumes in the small Czech market cannot compensate for a price decrease in France,” meaning that companies, therefore, have to choose carefully when and where to launch innovations. Ipsen’s Patrick Zachar warns that “if getting the lowest price in Europe continues to be the focal point, access to innovation will worsen,” adding that it is irresponsible to “simply compare prices between various countries, as this does not necessarily reflect the differences and nuances between their respective systems.”
Moreover, low prices are having a detrimental effect on the industry, with many foreseeing the eventual exit of certain multinationals from the Czech market altogether.
Low prices are also having a knock-on effect on the availability of medicines, with many being exported to neighbouring countries with higher prices. The Czech government is aware of this ‘parallel export’ phenomenon and acknowledges the fact that low Czech drug prices are leading to a high and constantly increasing number of exports. Taking its cue from neighbouring Slovakia, the new Act on Pharmaceuticals aims to restrict parallel exports. Minister of Health Adam Vojtěch makes assurances that “stricter regulations are needed, and we are working on this.”