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Health systems in transition
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allowing the substitution of prescribed drugs by generics at the pharmacy under
certain conditions; this substitution may be refused by the physician, who has
to provide a justification in the prescription, and refusal is also an option for the
patient (Law No. 11/2012, of 8 March 2012). Moreover, pharmacies are forced
by law to have available at least three of the five lowest-price generics in each
class defined by a branded product.
The continuing trend of declining prices among pharmaceutical products
has reduced revenues to pharmacies and wholesalers, as their revenues result
from a regressive margin on the price of the product. The measures highlighted
above contributed to reduce pharmaceutical prices and pharmacy revenues, and,
as a result, pharmacies have claimed to face difficult economic and financial
conditions, including refusals by wholesalers to sell to them due to delays of
payment by pharmacies.
5.6.4 Distribution of pharmaceutical products
The wholesale and retail distribution of pharmaceutical products was also
addressed in the MoU. Historically, retail pharmacies and wholesale distributors
earned a margin over the price paid by consumers. The MoU stipulated that
a new structure of margins, using a combination of fixed fees and regressive
margins over the wholesale price must be defined (MoU, 2011). Before the
new legislation package enacted for this purpose, the pharmaceutical wholesale
margin was 8% and the retail pharmacy margin was 20%, both over the final
price (at the consumer level). These margins had been the subject of much
discussion over the years and by the end of 2010 and early 2011, the possibility
of moving to a different system of margins was mooted. Therefore, the MoU
proposal to combine regressive margins and fixed fees was expected.
One of the aims of this change was to save €50 million in distribution costs,
as reported in some versions of the MoU. The savings target is reinforced by the
requirement for wholesalers and retail pharmacies to pay a special contribution
(claw-back) if not enough savings are generated (although pharmacies in remote
areas with low turnover may be exempt from this pay-back mechanism).
A second objective of the margin change is to increase the incentives to
pharmacies to offer patients the option of purchasing generics. Under the
previous system, where margins were defined by constant percentage over the
final price, pharmacies had the incentive to favour the dispensing of products
with higher prices. Hence, the new rules mitigate this relative incentive to
dispense more expensive products (by not carrying generic products), resulting
in a decrease of prices.