Poor Greece splurges on costly drugs, to Brussels’ annoyance

4 July 2017
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ATHENS — Greece is addicted to expensive medicines, and three rounds of rehab have made only a small dent.
It’s a hard habit to kick: Greece for years lavished unusually high sums on the newest, most expensive drugs on the market. That led the European Commission to zero in on this, saying Athens would have to spend smarter to help cut its budget deficit. In the third bailout agreement between the European Commission and Greece, Brussels called on the Greek government to ensure that 60 percent of medicines are cheaper, copycat versions — so-called generics — by March 2018.

Only a quarter of medicines prescribed in Greece are generics, according to the European Commission, putting Greece at the bottom of the charts, ahead of Italy and Luxembourg but behind countries like Germany and the Netherlands, which have penetration rates of 81 percent and 71 percent for generics, respectively according to politico.

To usher the reforms through, the Greek government needs to face down opposition from powerful vested interests: pharmacies that make a killing from selling the more expensive original drugs and many specialist doctors who receive incentives from drugmakers to prescribe the latest name-brand medicines.

“Nobody else has ever implemented such heavy health care reforms in such a short amount of time,” said Nikos Maniadakis, a professor at the National School of Public Health in Greece.

Germans are three times as likely to get a generic drug as Greeks.
Athens will have to overcome resistance to reform from its domestic drugmakers and, perhaps most sensitive of all, a deep suspicion among Greek patients that generics are simply inferior.
“Greeks consider generics a second-class medicine due to a law in 2012 that said the poor people get generics,” said Pascal Apostolides, president of the Hellenic Association of Pharmaceutical Companies (SFEE), which represents multinational drugmakers in Greece.

The country has been making some slow progress in response to the pressure from Brussels. Generics penetration has risen 10 percentage points since 2010 and the Commission broadly argues that it is “proud of the progress” in the
Greek health care sector.

In need of reform
In 2010, when the financial crisis hit, Greece’s medical system was already idiosyncratic and dysfunctional.
On the one hand, it had the highest number of doctors per capita in the EU and pharmacies at every street corner. But the system was hardly functioning well: Patients paid almost 40 percent of health care costs from their own pockets.

These costs were a debilitating weakness from both an economic and humanitarian perspective. When Greeks lost their jobs and subsequently their health insurance, many couldn’t afford life-saving medication.

Martha Frangiadakis, a volunteer at a free clinic in Athens, where doctors and pharmacists volunteer and which runs on in-kind donations, gave a stark example of the personal sacrifices that were commonplace at the height of the crisis. She described how one man came to ask for Glivec, a cancer drug that costs €3,000 per course, that he could no longer afford. The clinic put out a call and another man suffering from cancer offered to share some of his own medication. That was the only way some people could survive.

The left-wing Syriza government tried to combat these problems by passing a law last year to give health care access to those who had no insurance, but the move piled more pressure on the health system. The extra strain meant some method to contain drug costs became more vital than ever.

As Greece looks toward its exit from EU oversight next year, when the third — and many hope final — bailout agreement ends, Athens still has a lot of work to do to ensure its health system stands on its feet.
Pharmacies and doctors in the crosshairs

Greece will need far more aggressive surveillance of its pharmacies and doctors if it wants to whittle the costs down and accelerate the transition to generics.
Greece’s tightly regulated pharmacies were quickly identified as a problem in the early days of the crisis, because they were widely accused of being wedded to expensive drug brands. In the first bailout agreement, the European Commission, the European Central Bank and the International Monetary Fund asked the Greek government to remove restrictions on who can open a pharmacy to create more competition. The troika also wanted Greece to introduce an electronic system to monitor doctors’ prescriptions to increase the uptake of generics.
Seven years later, many of these demands have been met on paper, but are failing to make much difference in practice.
Laws to shake up the pharmacist profession to increase competition and allow supermarkets to sell nonprescription drugs have been passed, but are not yet fully implemented.

The Greek government made drugmakers offer a bigger discount to pharmacies so they would have incentive to sell more generics. This measure, which passed in mid-May, was part of implementation of the third bailout agreement and was required for Greece to unlock a new round of cash.

Theodore Tryfon, the president of the Panhellenic Union of Pharmaceutical Industry (PEF), which represents Greek companies producing mainly generics, insisted that this would not change anything. The margins pharmacists make from selling brand name drugs would still be bigger than the discounts they receive for selling more generics, he said.

Greece’s early experiments with e-prescriptions to rein in overprescribing and promote generics were also unsuccessful.

In 2014, the Greek government imposed a maximum expenditure limit on drug prescriptions by doctors and asked them to prescribe generics in at least 60 percent of cases. “If the doctor did not cover this percentage, he was expelled from the system of e-prescription,” meaning the doctor couldn’t legally prescribe drugs at all, said Michail Vlastarakos, the president of the Panhellenic Medical Association, which represents Greek doctors.

His association brought the measure to the Supreme Court, which in 2016 struck down the 60 percent threshold.

In a second attempt to control what doctors prescribe, the Greek government in May introduced a set of detailed rules that doctors have to follow when prescribing medicines.

Local vs global
The Greek government’s other big headache is its need to strike a balance between the international and the domestic pharmaceutical industry. While it is under pressure to support domestic champions, it also has to maintain good ties with the multinational companies that produce new drugs for illnesses such as hepatitis C.
Both sides of the industry blame each other for the low penetration of generics.
By law, generic medicines should cost a maximum of 65 percent of the price of original drug that has lost its patent, but the multinational companies’ lobby SFEE complains that some generics are still much more expensive than that. In fact, Greece has the most expensive average price for generics in the EU. That’s because the government doesn’t want to harm local pharma companies, which remain one of the few successful industries in the country, contributing almost €3 billion a year to its economy, according to two sources who would only speak on condition of anonymity.
But Tryfon, of the generics’ lobby, warned that ultra low drug prices could also backfire.
He explained low prices for some drugs would undermine the market and hurt patients because drugmakers would stop selling them in Greece if they don’t turn a profit anymore. This, in turn, would lead to more expensive medicines taking their place on the shelves and patients not having a choice between a cheap or expensive option.
The drugmakers, both local and international, are also angry about the level of extraordinary payments they have to make in Greece. For all of the country’s expenditure on drugs that goes over €2 billion a year, drug companies must offer paybacks and rebates. The amount collected from drugmakers every year is now spiraling out of control, rising from €271 million in 2012 to €1 billion in 2016, the pharmaceutical companies say. Effectively the drug companies are paying for a third of medicine usage in the country.
The idea of forcing drug companies to make paybacks and rebates was to stop them from incentivizing doctors to prescribe too many expensive drugs, according to a Commission official.
But this hasn’t worked. Despite the pressure on the drugmakers, doctors have still been signing off on high volumes of drugs to patients, and drugmakers say the number of prescriptions has gone through the roof. They would like the government to look into why the number of prescriptions went from 4.5 million a month in 2010 to 6.5 million a month in 2017, for example.
All these failures have made many Greeks lose hope in having a properly functioning health care system in the near future. Apostolos Veizis, director of the medical operational support unit at Doctors Without Borders, said: “I don’t see the light at the end of the tunnel. There’s no hope in this country.”

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