Hungarian Drug Subsidies Soar

The 1997 budget and expenditures of Hungary's Health Insurance Fund are to be balanced at 574 billion forint ($3.74 billion), reports MTI Econews. The Fund had a 15.21 billion forint deficit in the first five months of 1996, with a 37 billion forint deficit expected by year-end. Revenues were 185.36 billion forint at end-May, with spending at 200.57 billion forint.

Pharmaceuticals subsidies reached 37.75 billion forint in the first five months of 1996, against a drug subsidies budget of 72 billion forint for the whole of 1995.

Plans to cut social security contributions by 2% could mean a bigger Fund deficit than forecast; each 1% cut in social security contributions reduces its revenues by 16-17 billion forint. However, 29 billion forint in extra revenue is due from the increased number of contributors, and in 1997, the Fund will receive 19 billion forint extra from taxes payable on substances dangerous to health, and 37 billion forint in contributions from people such as students and those doing military service.