Hungary slashes prices of 1,000 drugs as new Pharmaeconomic Act comes in

The price of 1,000 drugs will be reduced in Hungary on April 1, by an average of 16% as a result of the first "auction" under the Pharmaeconomic Act introduced in January 2007 (Marketletters passim). About 100 products will be delisted from the national reimbursement list since the manufacturers refused to cut their prices. The recent price reduction affects new medicines and generics as well, among them being popular painkillers, anti-inflammatories, antibiotics and cholesterol and blood pressure reducers.

Under the new Act, the reference product has to be the cheapest pharmaceutical compound among those with the same active ingredient. This is established quarterly through price bidding. Manufacturers are given an opportunity to reduce their drug's price to the required level in order to stay on the National Health Insurance list. If the price exceeds the reference product's price by more than 20% the drug will be delisted.

At the same time, 141 medicines will have an average 6% price increase and a further 134 products will face delisting due to the lack of turnover during recent years. The Minister of Health, Lajos Molnar, expects the National Health Insurance (OEP) to save an annual 20.0 billion forint ($103.3 million) while the patients may spend 10 billion forint less if they opt for the cheaper alternatives. The average reimbursement level was also dropped from 67% to 50% in January 2007 in an attempt to save the 2007 drugs budget (364.0 billion forint).