The government’s plan to reduce drug prices may lead to the unprofitability of the only pharmacies in some communities.
Government is making a reform that lowers the prices of medicines, which may lead to some municipalities’ only pharmacies becoming unprofitable.
The matter is approved by the Minister of Social Affairs and Health Hanna Sarkkinen (left) MP in his answer Minna Reijonen (ps) to a written question.
It is about the government’s plan to lower the prices of medicines in pharmacies. In addition to consumer prices, the change would decrease the state’s drug reimbursement expenses and, on the other hand, reduce the profits received by pharmacies.
“According to the impact assessment, there are pharmacies whose results would become loss-making as a result of the reform. Only a small part of these are located in a community with only one pharmacy,” says Minister Sarkkinen in his answer to a written question.
Sarkkinen says that pharmacies that become unprofitable can make adjustments to their business. In practice, however, it is possible that pharmacies will disappear from some localities completely.
The effects of the reform have been evaluated in cooperation with the Ministry of Social Affairs and Health, the safety and development center for the pharmaceutical industry Fimea and the Finnish National Pension Service (Kela). According to Sarkkinen, the availability of medicines and pharmacy services is not expected to “significantly weaken”.
Government is planning a set of several changes in laws and regulations, which are meant to improve the cost-effectiveness of pharmaceutical care, i.e. cut government spending. The purpose of the savings is to finance the increase of caregivers in the elderly services, i.e. the realization of caregiver rationing.
With the reforms, the prices of medicines are supposed to decrease for consumers as well. The main changes in the whole concern biological medicines, inhaled medicines, reference price groups and the calculation of medicine taxes.
The government is planning changes, which it is hoped will increase competition and thus lower prices.
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The Finnish Association of Pharmacists says they are dismayed by the whole thing.
Pharmacy opposes a bill that would cut pharmacy profits.
For example, the Finnish Association of Pharmacists says in its statement that it is dismayed by the whole thing. According to its calculations, there would be 76 loss-making pharmacies after the change, when the operations of separate companies are taken into account. According to it, there are currently 34 such pharmacies. Separate companies are limited companies through which many pharmacies sell over-the-counter products, such as cosmetics.
The changes to the drug tax, which means the pharmacy’s share of the drug’s retail price, arouse the most opposition. It is regulated for each medicine in the medicine tax regulation, and it determines how the retail price is calculated based on the wholesale price.
The drug tax for prescription drugs would be changed so that the estimated sales margin of pharmacies would be cut. For example, the Finnish Competition and Consumer Authority (KKV) has considered pharmacies’ profits to be excessive and believes that the changes will moderate them.
The retail prices of medicines, on the other hand, affect the state’s reimbursement expenses, because the medicine reimbursement is primarily paid based on the retail price of the medicine.
Presentation draft does not include changes to pharmacy tax. Among others, Fimea, which does not support the government’s plan, pointed out this in its statement. In Fimea’s opinion, the medicine tax should not be changed without changing the pharmacy tax.
“The unwanted effects of the medicine tax cut on the quality and functionality of pharmacy services could be better minimized or possibly even avoided with the simultaneous pharmacy tax change,” Fimea’s statement states.
This is also the view of pharmaceutical companies and associations, as well as KKV. The National Institute of Health and Welfare (THL), which otherwise supports the draft, also points out that the drug tax and pharmacy tax should be considered as a whole.
Among the opponents of the draft is also the University of Helsinki, for which the reduction of drug taxes would mean a cut in the funding of research and education through the University Pharmacy.
The opinion round of the draft proposal ended on Monday, and the proposal is to be discussed in connection with next year’s state budget. The government negotiates the budget during the budget crunch in August–September.
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