Crystal Clear: Creating Transparent Czech Reimbursement


A current lack of transparency in Czech healthcare spending is severely detrimental to all industry stakeholders. However, new synergies between the private and public sectors are helping to clear these murky waters.


The Czech Republic, with a population of about 10.5 million, is the third most populous country within Central and Eastern Europe (CEE) and a current hotspot for the healthcare and life science industry; the nation has identified this industry as a stepping stone towards a glistening future. One of the main ambitions of the Czech government under Prime Minister Bohuslav Sobotka is the transition into “Industry 4.0,” for which the healthcare and life science industry is expected to play a key role due to its high-end value chain. With a strategically advantageous geographic location at the centre of Europe, in addition to a highly educated workforce which demands comparatively low wages, the Czech Republic aims to establish optimum regulatory conditions to foster the industry’s development, thus benefiting the Czech economy at large.


In recent years, the regulatory environment has been improved significantly for pharmaceutical companies operating in the Czech Republic. Jakub Dvořáček the executive director of the Innovators Association (AIFP) elaborates that market access, for instance, is “one of the best in the whole region.” Ondrej Halasz, country manager for CSL Behring Czech Republic, adds that the regulatory framework is highly sophisticated and “allows us to forecast our sales with very high accuracy.”


The crux in the system that currently impacts industrial stakeholders is the lack of transparency on a different front: healthcare spending at large. The underlying issue is that the health insurance companies responsible for reimbursing treatments and medication do not provide detailed data on their spending to the ministry of health. The issue for the industry is that the relevant authorities lack the ability to track their healthcare spending which ultimately results in reimbursement procedures deemed unfair by many industrial stakeholders. During reimbursement procedures, drugs and treatments are re-referenced within a basket of treatments and drugs already existing in the Czech market. This creates situations in reimbursement procedures where highly innovative treatments are referenced – and reimbursed accordingly – to treatments that might have existed in the market for over thirty years. Many industrial stakeholders report of this issue, fearful of losing the ability to commercialize their treatments in the Czech Republic.


Juan Carlos Conde, General Manager of Teva Pharmaceuticals Czech Republic, is among these industrial stakeholders navigating around price pressure in order to help Czech patients, pointing out that “prices spiral down to a level where commercialization of the treatment is not economically feasible anymore,” however he acknowledges that “a certain degree of referencing and price pressure is more than fair,” calling upon a stronger collaboration between all stakeholders to find a sustainable solution for the benefit of Czech patients.


As 2016 sees the highest healthcare budget ever allocated in the history of the Czech Republic; rising healthcare spending and the lack of transparency is naturally dominating domestic news. Minister of Finance Andrej Babiš has repeatedly referred to Czech healthcare spending as a “black hole;” accusing minister of health Svatopluk Němeček of having lost control of his ministerial responsibilities. Other political stakeholders realize the issue of healthcare financing as well. Jan Žaloudík, chairman of the committee on health and social policy in the Senate and advisor to the prime minister, is of the opinion that “Czech healthcare financing resembles a tumour that spread.” Žaloudík however counters the attacks on Němeček by pointing out that “finding a solution to this challenge will need time!”


As a matter of fact, Němeček seemingly realized the issue of healthcare spending upon assuming his position in 2014. One of his first actions was to establish and implement the National Strategy of Health 2020. An integral part of this strategy was to establish the Institute of Health Information and Statistics and appoint Ladislav Dušek as its director. The institute’s mandate is to construct an information system which requires insurance companies to provide extensive data to it. The institute’ ultimate goal is to shed light on Czech healthcare spending and to use the information to remodel the antiquated Czech reimbursement system.


Although it is not clear when the process of information gathering will be finished and remodelling of the reimbursement system can begin, there seems to be hope for the pharmaceutical companies which currently battle with the reimbursement system. Not only is the plan to remodel the reimbursement system set in stone and well underway, the Czech government openly realizes the industry as a partner and recognizes their contribution to a healthy population, “so we can fully realize synergies between the public and private domain on healthcare issues,” Jan Žaloudík rightfully concludes.

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