Evolution And Revolution In Italy's Pharma Market

The Italian government's determination to reduce its 2 million billion lire ($1,198.6 billion) deficit has had devastating consequences for the pharmaceutical industry. Many firms have lost a major share of their sales, with declines of up to 60%, according to industry consultant Guido Strani. For example, calcitonin, which is now reimbursed for Paget's disease only and not for osteoporosis, has dropped from 19th position in the league of top-selling drugs to 200th, with an 86.5% sales loss, and thymopentin is down from 10th place to 725th, with a 95.5% loss of sales

Dr Strani told the OTC News conference in Istanbul, Turkey, (Marketletter May 8), that Italy's 1994 Finance Bill, which aimed to keep state drug spending at 10,000 billion lire against 13,000 billion lire in 1993, was the basis for a total revision of Italy's welfare policy. It did not achieve its goal, and 1995's Finance Bill fixed spending at 9,000 billion lire for 1995, 1996 and 1997, meaning cuts in real terms. 1995's bill also includes a two-stage price cut across product ranges, based on companies' total sales in first-half 1994. If sales rose under 10%, prices of all reimbursed drugs will be cut by 2.5%, and if they rose over 10%, the price cut is 5%. 650 products marketed by 49 companies are subject to the 5% cut.

Under the new rules, the Health Ministry has: replaced members of the drug pricing committee, the CUF, and cut their numbers from 32 to 14; abolished the reimbursement list (the Prontuario); modified the drug pricing procedure; and revised national health service coverage.