Latvia has seen some major breakthroughs in recent years: more innovative medicines are available to patients than ever before; the market for commercial, OTC and reimbursable medicinal products has achieved new heights, and we are in a strong position to continue this trend. What has been accomplished and what challenges is Latvia facing today with respect to innovation?
Innovative molecule availability in the Baltic States
The Association of International Research-based Pharmaceuticals manufacturers (SIFFA) in partnership with IQVIA conducts a study every autumn to assess the progress of innovative medicine availability for patients in the Baltic States. The methodology is simple. On the first of September we draw the line and start counting INN’s for each country, counting oncology drugs separately.
Innovative medicine availability in the Baltic States, 2022
As seen in the graph above, over the past five years, the number of innovative medicines in Latvia has grown significantly. As recently as 2018, 31 innovative medicines were available in Latvia, but in 2022 there are 99. Comparing Latvia’s indicators with neighbouring countries, the number of innovative medicines in Lithuania is 14 percent higher, the total number reaching 113, while in Estonia it is 6 percent, reaching 105 innovative medicines in the national list of compensable medicines. Among the Baltic states, Latvia has experienced the fastest growth in the last five years, constantly trying to get closer to Estonia and Lithuania. Taking into account the small difference, by directing additional state financial resources to innovative medicines, next year Latvia has every chance of overtaking one of the Baltic states for the first time in history.
Government spending for medicines and healthcare in Latvia
Because the COVID-19 pandemic demonstrated weak points within the healthcare system, the government has allocated additional investments for major hospitals, purchasing equipment and innovative drugs for oncology patients worth of EUR 49.84 million in 2022 and EUR 30 million each year for 2023 and 2024.
There are three programs within the annual state budget, which should be taken into account when assessing the market:
1. The centralised purchase of medicines and materials, for which EUR 18,515,355 have been alloted in 2022.
2. The treatment of rare diseases, accounting for EUR 10,305,077 in 2022.
3. The payment of reimbursable drugs and materials, with a projected EUR 195,200,088 budget, although the forecast amount of invoices for 2022, taking into account the actual execution of the first six month period amounts to EUR 214,467, 078.
The total estimate for 2022 is EUR 243.29 million.
According to State Agency of Medicines and state statistical reports published on the activity indicators of drug wholesalers and drug manufacturers in 2021 (millions of EUR without VAT), sales turnover of drug wholesalers achieved EUR 703.95 million of which turnover of medicines in Latvia showed EUR 546,61 million results out of which only EUR 28,20 million were spent on the products which are produced by local manufacturers.
Because the COVID-19 pandemic demonstrated weak points within the healthcare system, the government has allocated additional investments for major hospitals, purchasing equipment and innovative drugs for oncology patients worth of EUR 49.84 million in 2022 and EUR 30 million each year for 2023 and 2024, which amounts to nearly EUR 110 million in investments. Certainly, a hundred + million euro equipment and innovative drug investments are not the ceiling, as additional major investments are diverted to actual construction, modernisation, new buildings and other essential needs in 2022, 2023 and 2024. The actual budget for the healthcare system in Latvia accounts to roughly EUR 1.5 billion , which is not enough to reach the average standards of wealthy western economies within the eurozone.
Further investments are urgently needed, but the good news is that according to the recently approved public health guidelines, a medium-term policy planning document that defines Latvia’s public health policy for 2021-2027, an additional EUR 1.14 billion will be invested in the system by 2027, so positive news should continue to flow from Latvia.