Investigating: State Essential List is a Priority, Not the Rulebook on Medicines

According to official data from the Agency for Medicines and Medical Devices of BiH, in 2014, 138 companies generated revenue from medicines in BiH, of which only 5 were domestic. If the Rulebook on medicine pricing is adopted, domestic producers will be in an even more unfavorable position, and the production of medicines itself will be jeopardized, writes the BiH news agency Patria.

As stated by the Agency for Medicines and Medical Devices of BiH (ALMBiH), the Rulebook should determine the maximum wholesale price of medicines that are dispensed by prescription and that medicine prices are determined based on pre-defined criteria, in order to stop the practice of manufacturers going to the market with a price "they can get away with".

On the other hand, sources of the Patria agency state that it is unjustified to demand that manufacturers of generic medicines lower the prices of their medicines to 95% of the average price of the same medicine in surrounding countries, given that the BiH market is significantly smaller than the markets of the reference countries, and that corrective factors have already been included in the calculation of medicine prices in the reference countries.

- In practice, this would mean a multiplication of price reductions for generic medicines, and practically, the BiH market would have the lowest prices in the region, which is completely illogical, considering that it is the smallest market compared to the markets of the region and the mentioned reference countries - says our source.

Also, it should not be forgotten that by strengthening the domestic pharmaceutical industry, the state reduces dependence on foreign manufacturers and ensures the treatment of the population even in crisis situations.

ALMBIH agrees that we need a domestic medicine industry and claims that the Rulebook will establish maximum wholesale prices for medicines for the entire territory of BiH. However, the main problem lies in the essential lists, which differ at the entity or cantonal level.

- The Agency should first prepare a proposal for a state essential list, which is a higher priority and the only thing that will ensure equal access to medicines for all citizens throughout the territory. Of course, it is necessary to clarify the mechanism by which such a list will actually be implemented in practice throughout the territory of BiH. Does the Agency still guarantee that price reductions will ensure regular supply, and how will this affect the operation of the entire system and distribution chain, considering the legal frameworks in BiH at the entity and cantonal levels - our source wonders.

The President of the Chamber of Pharmacists of the Federation of BiH, Zahida Binakaj, previously told Patria that the share of domestic medicine manufacturers in their own market is not even 30 percent, while pharmaceutical companies from neighboring countries have a share of over 70 percent in the BiH medicine market. According to data obtained by the Patria agency, the share of foreign medicine manufacturers in the total medicine market in BiH is 82.1 percent or 436,357,934.72 KM, while the share of domestic ones is only 17.9 percent or 95,098,713.27 KM.

The adoption of the Rulebook on medicine pricing could also raise numerous other issues, such as the survival of domestic production, lower VAT collection because price reductions will lead to a decrease in the base on which VAT is calculated, meaning less money in the state treasury, and opening up the market to manufacturers from neighboring countries.

Based solely on tax payments, it is estimated that the domestic pharmaceutical industry has generated over 150 million KM for the state in the last five years.

For example, in surrounding countries like Croatia, medicine policy is regulated by the Ministry of Health and the Croatian Health Insurance Fund (HZZO). In Croatia, VAT on prescription medicines is 5%, and on over-the-counter (OTC) medicines, it is 25%.

Domestic manufacturers have a number of benefits, including investment incentives and tax incentives for investments in research and development, into which significant funds are invested.