The European Union’s decision to mitigate the effects of the COVID-19 pandemic by launching its Recovery and Resilience Facility (RRF) and moving away from its past austerity policies is particularly significant for Greece. Severely hit by the financial crisis a decade ago and thrown off its course to recovery by the pandemic, the country is set to receive EUR 17.77 billion in grants and EUR 12.73 billion in loans. Along with the financial injections, Greece will also see a number of reforms come out of the RRF, including a review of its much-disputed clawback policy, with incentives for local manufacturing of medicines. Here, key stakeholders in Greek pharma weigh in on the opportunities and the impact of the plan on their industry.
A Golden Opportunity
One of the first countries to submit its national plan in April 2021, Greece’s RRF plan includes a vast array of investment measures and reforms supported by EUR 17.77 billion in EU grants and EUR 12.73 billion in loans. Many of PharmaBoardroom’s recent interviewees within the Greek pharma ecosystem see the plan as unprecedented opportunity.
Greece is the only European country to have included the pharmaceutical industry within its RRF plan
Faye Kosmopolou, PEF
“The RRF is a very broad plan that will give the country a lot of opportunities. Τhe plan consists of 106 Investment measures and 68 reforms, so it is a very broad project, and approximately EUR 1.5 billion is going to be spent on healthcare,” says Olympios Papadimitriou, general manager of Novo Nordisk Greece.
“Greece is the only European country to have included the pharmaceutical industry within its RRF plan, which will allow the inflow of new funds into the country and lead to the opening of 12 new manufacturing sites, 16 new R&D facilities, and 32 new manufacturing units,” adds Faye Kosmopolou, general manager of the Panhellenic Union of Pharmaceutical Industry (PEF), which represents the country’s domestic pharmaceutical manufacturers, primarily in the generics field.
Top Priorities: Primary Care and Digitalisation
Specific priorities set forth in the plan are bringing the healthcare system up to speed digitally and improving both hospitals and primary care. “EUR 278 million has been earmarked for digital upgrades, EUR 317 million for hospital upgrades, and EUR 271 million for primary care,” says Michael Himonas, general manager of the Hellenic Association of Pharmaceutical Companies (SFEE).
This funding injection has the potential to make the biggest difference in primary care
Michael Himonas, SFEE
For Himonas, the RRF stands to make a significant impact on primary care. “This funding injection has the potential to make the biggest difference in primary care. A more efficient primary system would see patients visit hospitals far less, thereby significantly reducing the expenses incurred by the state,” he says.
“We need to improve the primary care system and establish new forms of care, such as home healthcare. Having already seen some improvements in this space, I am very positive about this and look forward to seeing more,” agrees George Carystinos, general manager Greece, Cyprus & Israel, Ipsen.
The digitalisation piece of the plan is very ambitious, aimed at unifying the country’s hospital systems and creating digital patient records. “One big project is to unify hospital operating systems, which are very fragmented and to date it is difficult to have a consolidated overview of the hospital operation in a timely manner. Another important project that we expect to be completed through the RRF funding is the digital patient record, which will allow us to understand better where the money for medicines is being spent, in which categories, in which treatments, what is rising, what is declining, and hopefully record patient outcomes,” says Papadimitriou.
Not only will these digitalisation projects create more efficient processes, according to Papadimitriou, they stand to optimize government resources: “Digitalisation is the best way to spot sources of waste, sources of efficiency, and in the end, create real-world evidence. The latter could be a potential source of income for the government as the industry would be willing to purchase this kind of data,” he says.
Curbing Clawbacks
The country’s rebates and clawbacks scheme is a much-criticized system under which pharmaceutical companies are required to offer mandatory rebates to the National Organisation for the Provision of Health Services (EOPYY) based on their total sales. Pharma stakeholders have high hopes for the RRF measure that is set to minimize clawbacks over the next few years.
Another positive initiative included in the RRF is a scheme that is supposed to gradually reduce clawbacks up until 2025
Olympios Papadimitriou, Novo Nordisk
“Another positive initiative included in the RRF is a scheme that is supposed to gradually reduce clawbacks up until 2025, benchmarked in 2020. This year, it should be at least 50 million less than 2020. Next year, it should be 150, then 300 and 400 million, which are significant amounts,” states Papadimitriou.
According to Papadimitriou, under the RRF reform, the government will be forced to comply: “The rule, according to the RRF, is that if this does not happen, then the government will have to contribute the money. Thus, this creates a certain pressure for savings on pharmaceutical spending, but also perspectives to increase funding.”
Manufacturing Investments
The RRF clawback reform is set to translate into investments, particularly in manufacturing. “Policy reform around the clawback offset adopted under the Recovery and Resilience Facility (RRF) has allowed our industry to unlock an investment plan amounting to EUR 1.2 billion. This investment will update the capacity of the Greek manufacturing industry, ensuring patient access to affordable and high-quality medicines and also contribute to Europe’s strategic autonomy in pharmaceuticals,” says Kosmopolou.
[The clawback offset] has led RAFARM – building on its existing investments – to add significant new capacity in ophthalmology and become one of the top three European ophthalmology manufacturers
Aris Mitsopoulos, RAFARM
Dimitros Demos, general manager, DEMO Pharma confirms the RRF’s influence on investments and the manufacturing capacity of the country: “We will build up manufacturing capacity, including via a new manufacturing campus in the city of Tripoli, 120 km from Athens. This will entail the expansion into the manufacturing of different chemical forms as well as our own active pharmaceutical ingredients (APIs).”
RAFARM’s vice president Aris Mitsopoulos is already seeing the effect of pharmaceutical manufacturers being entitled to an offset of part of their outstanding clawback: “This has led RAFARM – building on its existing investments – to add significant new capacity in ophthalmology and become one of the top three European ophthalmology manufacturers, growing from the current 25 million units per year in this niche to 45 million.”
Cautious Optimism
Two leaders from mid-sized European pharma companies with operations in Greece are more cautious about singing the praises of the RRF. For them, the underfunding of the country’s healthcare system remains at the root of many of its problems. “Today, Greece’s per capita expenditure on healthcare is one of the lowest in Europe,” says Nikos Ragoussis, managing director of LEO Pharma Greece, Cyprus, and Albania.
I am optimistic that we’ll find a way together with the state to better utilise the budget
George Carystinos, Ipsen
“We hope that more money is put into pharma because as of now, at least 50 percent of drugs are paid for by the pharma companies and not by the government. The market is growing by between eight and ten percent and the companies cannot put any more money in. In a sense, the market is increasing because of how much money is being paid back, therefore we hope at some point that the government starts to put more money into the system,” he continues.
The huge injection of cash from the RRF is not a cure-all solution, according to Ragoussis: “Putting extra money into the system alone is not the solution, other things should happen – and are happening – like investment programs to build new factories in Greece, funding for clinical trials, manufacturing sites and other initiatives. Money goes to those proposals and less to the medicines per se, so to reap the benefits of the funding, we have to get involved in those activities.”
Carystinos shares some of this scepticism. “There is a focus on digital upgrades, but it remains to be seen how impactful this will be,” he says. Nonetheless, he feels hopeful about the possibilities the RRF opens up for working together with the government: “I am optimistic that we’ll find a way together with the state to better utilise the budget.”
